I have no real experience of the retail sector. In fact, I don’t have that much experience of shopping. However, lately I’ve been musing on why shops need to be there at all. This has partly been driven by my regular walk through the new shopping centre at One New Change in the City. To quote:
ONE NEW CHANGE is Land Securities’ latest development located on Cheapside in the heart of the City of London. It is London’s newest shopping destination, complete with cafés and restaurants from renowned chefs and flagship menswear and womenswear fashion brands, all set overlooking London’s most famous landmark, St Paul’s Cathedral.
It’s an impressive complex, and no doubt the Landlords will claim it’s gone swimmingly since opening. However I’m not convinced that it’s a ”shopping destination”, rather than an “eating destination” . Even if you walk through at about 12.30 (lunch break shopping time) the shops are becalmed, often with no one but smart looking sales staff. At odds with that, all the bigger brand restaurants and takeaways seem packed. Wasabi (which I like) is a real hive of activity. When I stood waiting to pay, they appeared to be processing one person every two minutes at the 6 open tills. At a rate of £10 per head, that’s £1,800 an hour. Seems like a good business, but begs the question how fashion retailers could afford to pay similar rents, particularly when their prices appear cut to the bone.
This is a constant battle I guess. When I googled “why have shops?”, I found most links related to local activist groups complaining that they didn’t want yet another Costa, Starbucks (coffee certainly gets bashed for expansionism) or indeed a branch of Tesco, or one of the other supermarket giants.
It strikes me that retailers, or at least those with narrow product lines, need to be rather more revolutionary in their approach to this issue if they are going to survive. In essence they are glorified display units, which is why, I guess, there are pop-up shops are now appearing where you use spare space to market your product for a brief period.
Perhaps Starbucks need to aim much bigger as well, creating huge coffee shops that have lots of display space that are for marketing different brands. Sit there with your double caramel latte (yuk), look at some nice new things, and then order them on line. Simple.
Chris Dines, CEO, Knowledge Peers
