2013 vs 2014. My last blog post of the year!
As we close for the Christmas period it always aids reflection of what was in 2013 and what might be in the year ahead. I have put down a few summary thoughts in this respect in no particular order:
- Vacancy rates continued to remain stable but underneath this are significant structural changes in the type of occupancy.
- Fundamental changes in the look and feel of many high streets. Decline of clothing, books, electronics, shoe shops and florists and rise of charity shops, pawnbrokers, coffee shops, betting shops, cheque cashing and fast food.
- Polarisation of locations. The big get stronger and the weak get weaker. Those in between vary depending on location, demographics and socio-economics. An interesting ‘triangle of change’ in this respect is Leeds – Bradford – Sheffield! What role and thus retail and leisure provision will each hold and will it be to the benefit or expense of one of the others?
- Significant anchor stores and footfall drivers are continuing their migration out of town. For a while we have seen the likes of Next and M&S but now we are seeing the discounters opening a significant number of out of town stores.
- Chain retailers whilst still declining overall have slowed down but this was in part to fewer large retailers going under. Blockbuster was the largest one of any impact in 2013 and still was a mere third of the number of stores of Woolworths and much smaller. So have we seen the end of high profile blanket closures?
- Independents continue to grow against all odds showing that if you get your offer right in the right place and provide service and dare I say it a sense of community and personalization then you can succeed. I will make no forecasts here as since 2009 I have seen them going from growth to decline and back again very quickly. An ageing population should be something many independents need to nurture.
- Various reports, reviews, Opposition pledges and Government missives took place. One thing is clear in all of them that town centres are a hot political battleground for the next election. Be it business rates, parking, planning or austerity measures one thing that is clear is that management of these for positive perceptions is something that will win votes.
- Online and the sophistication of the consumer and retailer have come on leaps and bounds. Everyone has a smartphone, a tablet and even 4G if you are lucky! Retailers have finally worked out (in most cases) what their consumers want and how they want it. This has meant throwing many business plans out of the window and reallocating costs to create an experiential environment and fast fulfillment. Amazon, EBay, ASOS and others have really shown what is possible if you get it right.
Forecasting is a dangerous game but in short I think we have seen the worst for the High Street. The majority of significant changes have happened and whilst there will be more I think the stable vacancy rate is testament to this. The big question will be what do you want shops for, where do we want them and what are we prepared to pay to use them? Forget bricks versus clicks and think customer – customer – customer. Loyalty is not built on price alone as we have seen in recent data that we all shop across all supermarket fascia depending on what we want and what we want to pay. The new customer is a hunter of product information, deals and ethics. Retailers need to be the farmers. Look after your customers well and they will return week after week. Mislead them, bombard them or misuse their personal data and you will see dramatic changes for the worse for your business in 2014.
Data is the only way anyone can measure reality and performance. The lack of use of data from investors, occupiers and local authorities is worryingly lacking. Gut feeling is no longer acceptable especially when playing with other people’s money and all to often it is still used. In 2014 I will spend most of my time working with other credible data providers and academics to demonstrate what I mean. From the number of stores that a retailer opens and closes, to financial risk of large assets and finally to the impact in occupation and persistent vacancy it is critical that when such data is available it should be used. How many of you wake up, look out of the window and then decide on your next week’s activities without any reference to a weather forecast? This week is a case in point!
Most importantly physical places still have an important and critical role to play as destinations for people (communities – residents, workers and visitors) to visit, interact, experience and purchase. The challenge comes in the balance required in each place as, thankfully, humans are all different and unpredicatable!
I wish all readers a very Happy Christmas and a Healthy 2014. I dedicate my last post to Laurell K Hamilton who sums it all up so well in The Laughing Corpse:
‘People are supposed to fear the unknown, but ignorance is bliss when knowledge is so damn frightening.”
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