Before coronavirus emerged on the scene, the British High Street was in dire straits. Now, the road ahead may be bleaker and the casualties greater.
As many as 1,234 shops shut on Britain’s top 500 high streets last year, according to a report by the Local Data Company and PricewaterhouseCoopers. Since then, conditions have hardly improved. And with COVID-19 lockdowns adding increased pressure, they aren’t expected to. According to the British Retail Consortium (BRC), retail sales fell a record-low 19 percent in April. Excluding food buys, the decline was closer to 40 percent.
What’s more, only one-fifth of BRC members paid the full quarterly rent that came due at the end of March, and as many as 900,000 out-of-work people across the retail industry are currently being supported by the government’s furlough scheme.
“Before this lockdown began in the U.K., high street footfall was down 31 percent, shopping malls it was down 20-odd percent,” BRC CEO Helen Dickinson said, citing Springboard footfall data during the Financial Times’ Global Boardroom digital conference last week. Post lockdown, she said, demand could be “down 20-30-40 percent even over the next few months.”
Predictions about post-lockdown spending have been varied, and with China seeing a sales surge when movement restrictions lifted in the country, banking on that so-dubbed “revenge shopping” may be a bad look.
“If you look at the Chinese market where there was a huge surge a lot of [those shoppers] are saying ‘next month I’m going to be cutting back,’ so I think we are going to see much of that same reaction,” said Mary Portas, founder and chief creative officer of retail consultancy Portas. “We’re going to see…a big splash and then it’s going to be a pull back, a snapback. And I think we’re going to look at a shift in the way the spending is going to happen.”
In the midst of crisis, particularly one where so many have suddenly found themselves out of work, frivolity falls by the wayside. And that means consumers, if and when they decide to spend, will want feel-good items.
“We need to be looking at that and the shift that’s going to be where the money’s being spent,” Portas said. “And I think we’re going to see quite a knock-on effect on the fashion industry.”
Already, British high street shops facing rising rents and falling traffic were in desperate need of transformation, as many were unwittingly and unwillingly relinquishing market share to e-commerce. Some simply failed to change in step with the consumer, opting instead to continue pushing product they guessed would resonate with the shopper too many didn’t realize they no longer knew.
While COVID-19 will prove a push forward, simply reopening outmoded stores with outmoded approaches to shopping will do little to save those in peril—or it could send those in moderately stable territory off the deep end.
“This is no longer about just selling to. This is going to be a shift of people buying into and into businesses that share their values,” Portas said. “We’ll spend for stuff that gives us and makes us feel resilience, comfort and security, and that’s very different from most retailers and especially in the fashion industry where it’s selling stuff to us. We’re going to see businesses trying to more connect with their customers in a way that’s much more avuncular and understanding.”
Experiential retail will come to mean much more than making stores more inviting or fun; post-COVID-19 retail spaces will be tasked with maintaining social distancing for the foreseeable future, keeping surfaces sanitized and diversifying their product ranges to goods that tell a story and compel consumers to connect.
“Yes, of course there’ll be queuing systems, but there might be queuing systems where you actually have sales teams—who won’t be just sales teams but kind of like stylists, ambassadors—that will be going out and talking with people, actually creating a greater dialogue with them,” Portas said. Windows may also become points of sale if consumers can text to order or scan a code to pull the product up on an e-commerce page, without ever having to enter the store, she added. “We’re going to see lots of creativity.”
Service may re-embrace the ways of old, where any consumer could expect to have an experience akin to personal shopping. Seasonality may continue to lose significance as shops bring product in line with real life seasons and opt for smaller, more regular and more curated drops.
“I think lots of great retailers will be looking at how they create a space that doesn’t feel transactional,” Portas said. “I really think it’s all up for grabs.”
For those retailers that couldn’t be categorized as ‘great,’ more will get caught in the bankruptcy storm, and that may be OK. As for the workers, Dickinson said plainly, “There will be fewer people who work in the industry in the future.”
“We had too many big businesses that were unwieldy and just couldn’t be nimble, could not be nimble enough to change,” Portas said. “I think what will come out the back of this is that we’ll see better retail and we’ll see more inventive retailing, and that, in the end, I think will be a good thing for everybody.”