Last year, when the industry convened at the Revo conference in Manchester, the big talking points were CVAs, empty stores and how to repurpose that space. Fast-forward 12 months, to a different location in Liverpool, and the emphasis has switched to supporting and understanding the true value of the physical store.
Ed Cooke, outgoing chief executive at Revo, said the “unfathomability and volatility” in retail and the UK in general had helped lead to the “greatest variety of attendees we’ve had” at the event. That included a visible local authority presence, reflective of the acquisitive nature of councils in physical real estate in recent years.
Many were present to showcase what they have already been doing – how to invest in local destinations when private equity will not.
“We are future proofing – to be frank there won’t be a town centre left if we don’t act now,” said Adele Taylor, financial executive director at Cherwell District Council. “We are trying to build up a centralised town centre destination so we can roll out a vision collectively. We are lucky because we are in direct contact with our residents.”
We are future proofing – to be frank there won’t be a town centre left if we don’t act now
– Adele Taylor, Cherwell District Council
Karen Whelan, chief executive at Surrey Heath Borough Council, echoed this sentiment: “What does the community want? What does it need? Because we are close to them now in terms of assets, we can deliver and invest properly.”
Stores remain part of that plan, despite the turbulence in the bricks and mortar retail market.
“Online spend is not killing the store, the store is driving online spend,” said Alex McCulloch, director at CACI Property Consulting Group. Research from the firm launched at the conference, called The Online Halo, shows that online sales double within a store’s catchment and that 90% of all UK retail spend is influenced by a store.
What is clear though, is that consumer habits have changed and fewer shops are needed. However, people are still shopping – but for leisure, not necessity.
The relative instability surrounding the economy, combined with consumer spend malaise, was covered by Maureen Hinton, global retail research director at GlobalData.
“Confidence is low, but we aren’t yet in recession so at the moment everyone is working and money is still available,” Hinton said, adding that the way we consume products has irreparably changed. “People aren’t buying big ticket products and we are in a state of impermanence – we rent our houses, cars and even music.”
Hinton’s presentation showed that in the past decade the UK consumer has spent £50bn more on retail, yet £150bn more on leisure activities.
Brexit hardly made an appearance at this year’s conference. Nick Symons, partner at MMX Retail, said: “At the moment Brexit is just another thing going on. People will still go shopping and there is still value in stores. We need to widen the discussion to make our places better.”
Store closures, which have dominated the headlines, mean that more spend is shared around. The CVAs of Toys R Us, Maplin and Poundworld released approximately £1bn of consumer spend for other retailers. Revo attendees said there is a market out there for those who can adapt.
So how do retailers set themselves apart in an age of internet shopping? With some predicting that online spend could breach 38.5% of all retail spend by 2023, stores need to increase their visibility online. For example, Miya Knights, author and head of insights at Eagle Eye, said that three-quarters of local mobile “near me” searches resulted in a same-day store visit, with 26% of those resulting in a store sale.
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