Talk with retail trend scout Matthew Brown
Brown is owner and MD of London-based Echochamber, an independent trend intelligence consultancy with a global client list. This professional globetrotter normally tours the world around twenty times a year searching for new store concepts, ideas and best practices.
So who better than him to go on a retail safari with? But we are still living in the time of coronavirus. Thus all mental travellers with a penchant for retailing must accompany us on the interviewer's equivalent of an augmented reality trip...
Not much, I'm afraid. London is a disaster zone for retail at present, it feels empty and sad. Without office workers and tourists, footfall is massively reduced. A lot of businesses haven't reopened after lockdown, office vacancies are on the rise. You can also see the devastation in small towns.
How hard has British retailing been hit economically?
It's like the financial crisis in 2008. A lot of businesses will go bankrupt. There will be a lot of empty retail space. Food retail, though, is doing very well. People don't eat out much anymore, and to make up for that, they trade up at the supermarket.
For a couple of months I had no job anymore. There were no trends, they all broke down. There was just emergency retail. I haven't taken a plane since the Euroshop fair in February, and I haven't organized any retail safaris ever since.
Now I see an acceleration of trends again. And by that I don't mean Covid measures like plastic barriers at cash desks or floor markings telling customers to stay two meters apart. That won't last.
The same goes for people spending more money on premium food or ordering meals online via Gusto or Hello Fresh. I mean trends that were there before Covid and are developing quicker now because of the pandemic.
The most obvious trend is the rise of online retail and the decline of physical retail. Highstreet department stores, for example, had a lot of problems before Covid: They didn't have a lot of differentiation points, people didn't really know why to shop there.
Therefore Covid restrictions and customers turning to online shopping have hit them all the harder.
What could save them?
Actually, politics could help a bit. Even before Covid, a lot of rent relationships weren't sustainable, with long leases and the rent always going up. On top of that, British retailers have to pay huge taxes on property rather than on their actual turnover.
Therefore, a business tax reform needs to be done. At present, a 10,000m² department store in the city centre pays much more taxes than a 100,000m² Amazon warehouse out of town.
What will happen, if nothing happens?
Then the catastrophic destruction of shopping malls and high streets will go on.
Already now, out-of-town retail parks are thriving in the UK. Marks & Spencer, for example, are pinning their future on retail parks and are leaving the high street because towns have restricted traffic in their centres and customers can't park.
What would be the solution?
Town centres need to think more like lifestyle shopping malls similar to how we know them from the US. They're basically retail parks, but with greenery at the heart of them and a town centre feeling. They're safe, clean, green spaces with a good mix of shops restaurants, events and pop-up stores.
A good example is the complex called 'The Americana at Brand' built by Rick Caruso in Los Angeles. It's a great place to be, four blocks for shopping, dining, entertaining and living – all in a beautiful 1920's design with a lot of green.
That sounds hard to achieve for older town centres. What will become of the empty retail space in the meantime?
I think that, just like after the 2008 crisis, we will see a lot of pop-up stores. There will be plug-and-play units with everything ready-to-go, including lighting, heating, counters and shelves.
Big brands like Nestlé or Henkel just put their graphics up, put their products in, let the event staff do their thing, and use the whole set-up as product activation space.
What about the trend towards ever more beautiful and glamorous stores?
Funnily enough, the 'push for posh', as I call it, actually goes on at the same time.
Look at Primark, for example. They had to close every store during lockdown and lost £650m in sales per month. Yet they still continue to open up spaces with beautiful architecture, glamorous facades and amazing lighting.
In their new Birmingham store they have experience on every level: three restaurants, a station where you can print your own T-shirt, a Harry Potter shop, and so on.
Are customers still hungry for shopping experience during Covid times?
Yes, they are. Maybe even more so, as they don't get out much anymore. But, of course, as a retailer you have to treat your customers according to the hygiene rules.
You can't give them tactile experience anymore. But you can show them inspiring displays and great visual merchandising in a combination of digital and physical.
Nike's flagship store in Paris is an amazing physical space built like an art gallery. Each customer uses an app to interact with the space, to get information on products, to call staff for advice or a running analysis, or to have items brought to them for fitting.
While doing so, the customer creates a unique profile they can use in any other Nike shop or online.
What can other retailers learn from this?
In shops you don't need big screens anymore. You just give them a good app to interact with your shop and website. QR codes and augmented reality now are more useful than ever.
Why augmented reality?
Because it creates an experience for the customer without physical contact in Covid times.
Look at the Tokyo flagship store of Hipanda, a Chinese fashion brand. There you can scan a QR code with your mobile phone to unlock the augmented reality and find a virtual ghost panda in the store. It's the Pokémon Go of offline retail, and it's fun.
What would be the equivalent in food retail? Hema or 7 Fresh in China, perhaps?
I'm not so sure. I think these formats rather offer a bit of theatre to their customers when they show them pickers and conveyor belts for online orders. The blending of offline and online is harder for grocers than for other retailers.
In food I think that retail technology can rather simplify the processes, bring more convenience to the customer, and ease some of the neuralgic points like queuing and paying.
But don't you see good examples of visual merchandising in food retail?
Yes, of course. Supervalu in Ireland, for example, shows great displays of fresh produce.
What opportunities could Covid bring to grocers?
People don't eat out much anymore, but delivery is growing. That's a big opportunity for retailers' gastronomy, if they operate it as dark kitchens. But, as soon as Covid measures are eased, it will be all about the physical gastronomy experience again.
Retailers should let their customers touch and taste the products and learn about them.
Is there still such a thing as individualisation in corona times?
Yes, there is! Nestlés KitKat Chocolatory in Sydney is a huge success.
You can build your own KitKat there, using an in-store iPad to choose your type of chocolate and topping, and personalize the packaging. Then staff members make your personal KitKat in front of you. It costs £7, but it is super-popular.
During the pandemic, more and more people have become used to shopping online. How can physical retailer get their customers back after the crisis?
People still crave to go out to actual places and to meet actual physical people. But you have to make it easier for customers to switch from online to offline and back.
Recently my wife and daughter wanted to go to an offline fashion shop, but they couldn't try the clothes on because of Covid restrictions. So they wanted to try the clothes on at home and send them back for free if they didn't fit, just like online orders. But they couldn't.
If you want to do that, you have to do it online. Rules like that destroy the physical experience for the customer and force him or her into online shopping.
Should retailers worry about such things in times of crisis?
Especially in times of crisis. If you see that all things that made your store nice are gone because of Covid measures, you're in real trouble.
You have to offer an experience that's even better than before the crisis to get customers back into the physical store. You need more personal services, more advice based on appointments, and a better presentation.