The Retailer Summer 2018_FA_20.07

Future proofing retail destinations

Diane Wehrle Marketing and Insights Director Springboard

“Footfall is in a long term downward trend but the average rate of decline is only around 1% per annum.”

BUILDING ON EXISTING OFFERS TO CREATE RETAIL ENVIRONMENTS THAT MEET FUTURE CONSUMER NEEDS.

In order to achieve this Manchester Metropolitan University and Cardiff University interrogated Springboard’s footfall data from 200 high streets in the UK to understand how they are actually used. They identified that towns have different “signatures” reflecting the fact that they are used differently. Once a town signature is identified this provides the fundamental evidence required for retailers and other operators to make decisions about their strategies and investment.

terms of its offer with a focus on delivering experiences to tourists and day trippers.

Footfall is in a long term downward trend but the average rate of decline is only around 1% per annum. What is stifling retailers are the legacy factors associated with big networks comprising stores that began trading up to 100 years ago that are large, old and not very efficient. Therefore, they cost a lot to run as a business and of course rents are huge, in places that perhaps would have been a bigger retail location in the past than they are now. Plus, especially for department stores, ranging and stock used to have breadth and depth – a lot of choice and lots of it, but in the past 2-3 years, those stores have focused upon smaller more capsule ranges especially in fashion so the choice is not there. This is evidence by the number of large department stores having fallen by 25% in less than a decade, with numbers dropping from 240 to 180 stores since 2009. In the current market place House of Fraser is to close one in three unprofitable stores, Debenhams to shut 10 stores and downsize 30 and Marks and Spencer to close more than 100 stores by 2022. This begs the question of whether retail destinations should continue to be solely retail focused or if they should embrace their uniqueness and adopt an offer that is more cognisant of the type of destination they actually are. So how does a destination understand what it actually is? With this in mind Springboard has led a groundbreaking two-year project funded by Innovate in order to once and for all understand how our high streets are used. The purpose of this is to maximise their trading potential and enable them to coexist profitably with online retailing and thrive in the age of the internet. According to our research only a quarter of high streets are used primarily as major shopping destinations and therefore most towns should not try to simply be bigger and offer more retailing but focus on strengthening other aspects of their offer.

The key for retailers is that they understand these differences and deliver a proposition appropriate for the type of towns where their stores are located. This may include reconfiguration of a store network, but this forward thinking approach is critical in a period of such rapid evolution in consumer habits and shopping patterns.

A key finding of the project is there are actually only four types of High Street destinations. Comparison Towns represent around 25% of all towns and focusses on retailing with a strong retail anchor. They have a large catchment area with a strong peak in activity in December. Around 50% of towns are either Speciality Towns or Multi-Functional Towns. Speciality Towns, whilst often having a strong retail offer, have a different pattern of activity from Comparison Towns, with footfall peaking during the summer months and have an anchor that isn’t necessarily a retail one, for example heritage or character. Visitors typically spend longer in these towns and are a blend of tourists and the local catchment.

In addition to understanding town signatures a trend much reported on by Springboard is the growing importance of the post 5pm economy. Whilst footfall during retail trading hours (9am to 5pm) accounts for around two thirds of all activity, it is the period post 5pm that had been strengthening, despite most stores not trading beyond 5pm in the vast majority of retail destinations. For retailers to be able to maximise their return on investment in a trading environment that has lost around 16% of spend to online shopping it is critical that retailers can harness the increasing value of the post 5pm economy and capitalise on the growing demand for leisure and experience amongst consumers. Retailing is now a 24 hour business and stores need to capitalise on consumers appetite for shopping beyond the artificial confine of traditional store trading hours. Consumers are changing and retailers need to be leading the way in delivering propositions that not only match consumer demands but inspire consumers moving forwards.

DIANE WEHRLE // 44 845 359 2835 // diane.wehrle@spring-board.info // spring-board.info

Of equal importance are Multi-Functional Towns, which can include centres with a large retail offer, but they are often visited for several reasons including work, shopping and leisure. These tend to be visited more frequently than other types of town and footfall is relatively stable across the year including at Christmas. The fourth type of town is the holiday town where the peak in footfall occurs very sharply in August during the school holidays, but actually may serve the local catchment area quite poorly in

42 | SUMMER 2018 |

retailer

retailer | Summer 2018 | 43

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