I’m confused. I can’t make head nor tail of retail in the UK. There’s a variety of news filtering from the high street that, on face value, seems quite contradictory. On the one hand, it’s positive and on the other, jobs are being lost and familiar retailers are threatening to shut their doors. In some unfortunate cases, familiar brand names are disappearing with people losing their jobs. ToysRUs and Maplin immediately spring to mind.
Before Christmas, and within days of each other, two huge mergers were announced. Renowned, multinational shopping centre operators, Westfield and Hammerson PLC, both acquired smaller rivals in order to grow their respective market share. This would indicate to me that shopping centres and high streets have turned a corner since the days of recognisable brands such as Woolworth’s shutting down.
Westfield and Hammerson are transforming the shopping centre experience. The reasons why they are so successful isn’t just luck; it’s a defined strategy. They have both appreciated our shopping habits have changed exponentially. Rather than competing with ecommerce and the ease of going shopping on the www, they see a shopping centre as totally complementary to it.
Ecommerce isn’t going to go away. In all likeliness, it will get bigger and more effervescent. Recently we read data from MasterCard that year-on-year transactions on ecommerce have risen by 11.5%. To enhance the service and ensure this trend keeps moving in an upward trajectory, one of the areas ecommerce operators such as Amazon are investing in is the delivery method. Either way, you can’t ignore the inescapable fact that this is still just a transaction for a product or service. Where’s the emotional attachment?
That’s where Westfield and Hammerson are doing so well. They recognise going to the shopping centre is more than going to buy a pair of shoes; it’s an experience. A place where families can spend time together going to the shops, where the family can also take in a film or a pizza or similar afterwards. The real estate that Hammerson and Westfield invest in are normally prime locations. However, the former realises that by buying smaller rival Intu, regional shopping centres also offer superb opportunities to engage with more and more people. Shopping centres are now leisure destinations; not places to be dreaded for hesitant wives, reluctant husbands and/or screaming children.
There was also news recently that technology investment in London (and the UK) is soaring in spite of Brexit. Hammerson and Westfield have recognised the value tech brings and have invested heavily to entice, immerse, and engage their guests by filling redundant retail space with games and promotional outlets to drive footfall and grow sales for participating retailers.
Brands and retailers want to be part of the shopping centre experience now, so it’s confusing when you see familiar high street names on the brink of failure. In recent weeks, ToysRUs confirmed all stores will close, New Look are closing stores and Maplin has confirmed redundancies and stores are hosting huge sales
With the shot in the arm Westfield and Hammerson are offering through their “Leisure vision”, why couldn’t New Look, ToysRUs and Maplin recognise the opportunities presented?
What could be the reasons they’re failing?
Units too large to draw customers in?
Poor marketing, offers, and communication?
Lack of leadership?
In all reality, it’s likely to be an element of all the above.
Other retailers are not necessarily following this trend. Christmas trading was positive for a number of retailers – Aldi & Lidl are basking in the glow of a positive December, ensuring an early year cheer for investors. Next had positive Christmas trading figures and their share price soared because of better-than-expected sales although their announcements in March put a dampener on these. Tesco was reported to have had an excellent trading period in the run-up to Christmas, however, this hasn’t prevented job losses being made at store level. Sainsbury’s too are making changes to their personnel at a local level.
Retailers need to look at every facet of their business model to attract shoppers. Fleet of foot and agile in their progress. Even Generation Z are taking themselves to the Centre.
We’ll keep a careful eye on this because it’s a key barometer of the UK economy.