The Retailer Spring Edition 2021

THE RE TA I L ER

8

TOP OF THE CLASS: WHAT CAN BE LEARNT FROM OUTLET RETAIL

Christine Grace Leasing Director Realm

W ith a culture of collaboration and partnership underpinning the success of outlets, what else could be adopted by the wider retail sector?

Communicating as partners The past year has reinforced the ever-growing importance of forging stronger partnerships to tackle many of the issues facing the retail sector which simply cannot be solved alone. Only now are some retail - ers beginning to work as partners and many landlords have remained resolutely adversarial in their stance. Outlets are in effect joint ventures that have equality running through their veins by virtue of the use of turnover rents, a model that requires a more dynamic and collaborative management structure. Fuelled by the shared objective to maximise sales, turnover leases are the ultimate foundation stone of a more commercial and retail-savvy breed of asset management. An outlet landlord becomes a surrogate retailer with far greater under - standing of their occupiers’ different businesses and with this insight comes a greater sharpness of focus and effective decision making. Recent scepticism regarding the willingness of some retailers to submit turnover data only serves to illustrate the short sightedness of some when there are so many benefits of establishing transparency over trading performance. The good can be bolstered to become even better and the under-performing can be helped far more quickly with mutu - ally agreeable interventions – moving to a smaller unit, changing store layout or a shift in marketing – all decisions that can be made mutually. With ongoing advice and granular support on everything from store recruitment to visual merchandising, we find that not only do most retailers choose to either extend short term leases but many transfer into becoming a permanent occupier. This higher level of support makes for a smooth transition into the space and is something Realm sees as a further advantage of a genuine partnership approach.

Shopping habits were evolving long before the first lockdowns were introduced last year but few will dispute that the past 14 months has seen an accelerated change in our industry and immense pressure on physical retail environments to adapt. Resilient through recessions and pandemics, bricks and mortar outlet retail has shown itself to be particularly well-positioned to respond. Two keys to this success have been a larger long-term commitment to customer experience, as well as a flexible and more collaborative approach to partnership. It was no surprise that upon the reopening of non-essential retail in the UK last Spring, footfall figures at Realm-managed schemes quickly reached 85% of the numbers achieved the previous year. When comparing this performance to full price shopping centres, footfall levels were only achieving 40-60% of historic numbers offering evidence that outlets possess inbuilt future-proofing and immunity which can be cloned and adopted by landlords and operators across the retail space. Historically outlets have been out of town and had to work harder with a more commercial work ethic to attract footfall whereas city centre schemes have been more reliant on efficiently converting plentiful footfall into shoppers. The difference may be subtle but a business run as an attraction has its roots embedded in experience.