What is the future of the high street?
It’s hard for me to believe that this time last year I was standing in the ‘Hudson Yards’ development in New York. I was discussing COVID with my agent and I remember we got into a debate about the possible implications of the supply chain to retail, if only we had known how it was going to affect our industry across the board!
Hudson Yards perhaps offers us a glimpse of the future in terms of physical retail and the coexistence with digital and online. The 4th floor of this very grand shopping mall is filled with lifestyle, F&B and fashion retailers who operate non transactional locations within the mall -sounds odd?
All of the space in Hudson Yards is filled by retailers who in actual fact are operating showrooms. This alone could trigger a whole separate debate about the difference between ‘service and experience’. There is a distinct difference between the two, however I think many of the businesses who have struggled or closed during covid have failed to distinguish between the two over the last decade.
These showroom managers at Hudson (1 or 2 employees at most per unit) talk and engage with customers about the brand and various concepts (that is the service) but no hard sell. The sale comes when the customer decides to download the app of the brand or visit the website, this gives the customer the ability to browse and order products through their account and receive the products the same day or next day delivery etc (that is part of the experience).
From the retailer’s point of view, I think many need to take a step back and think longer term then just getting cash in the till on the same day, the longer-term value of this type of relationship to the retailer is in the Data. You will have an ongoing relationship with that customer, and you can communicate with them directly. My own reading and instincts tell me that once we get out of this covid black hole, millennials and Gen Z customers will want more relationships with businesses like this to accommodate their busy lives and ever expanding ‘mobile first’ worlds.
When we look at running a profitable retail business, I think the traditional pound per sq. Ft model has been in decline for years and COVID has perhaps made many retail CFOs and accountants sit up. Perhaps the missing link in this debate, is for landlords to really understand the changing retail landscape and the need for experiential and non-transactional relationships with customers. The need for everybody to work together and be aligned on strategies and engagement is now.
Back in 2019 during another business trip to New York, I was marvelling at how I had ordered my first ‘Order ahead’ coffee at my favourite coffee shop on Park Avenue. I did remember thinking that it only worked well in this particular branch because it was a large location, and my coffee was sharing a space with at least 30 other customer orders. Regardless of it was a great start to my day and I was very pleased with myself, little did I know my day was about to get more interesting!
I was also able to see with my own eyes the Amazon Go store in Brookfield Place. As busy New Yorkers rushed to and from their places of work in and around the Trade Centre, I was amazed by the speed that the customers could enter and leave with their purchases paid for via their app. I remember I counted one customer in and out in 25 seconds! This is surely a glimpse of the future for multiples and independents alike. Load the app, get the credits and go from there….
Why couldn’t this concept move from FMCG to other retail sectors in the near future?! I think that it could easily do so and is perhaps one way that the high street can become more experiential and convenient for the customer. The idea of joining a long queue on a Saturday afternoon is not many people’s idea of fun and a quick in and out purchasing process inside your favourite fashion store or boutique would have its benefits for me. I suppose investment in apps, tech and inventory management would be required by the retailers, but surely over time this would be repaid through the obvious other savings that businesses would make.
Once that we gradually get back to normal after Covid and our lives become more congested with travel, family and work commitments, it seems rational to think that business will try to find a way to support us through additional convenience. I see now that the first Amazon Fresh store opened a few weeks ago in the South. I for one am looking forward to seeing that for myself and personally I can’t wait to see the first branch in the Northwest where I live.
This opinion article does not necessarily represent the views of Foursquare Group as an organisation.
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