July 17th, 2018

How online could be the high street’s saviour, not its executioner

*As syndicated in the Telegraph *

Vincent Van Doodle doesn’t sound like a rival to Marks & Spencer for retail space. In years gone by the Birmingham-based company might have sold its bespoke art designs at a local market stall. Instead, starting out in 2013, co-founders Jules Bedwood and Oli Silvester launched their business online, selling products via platforms like Etsy and eBay.

It wasn’t until 2016 that the duo even thought of doing bricks and mortar retail. But when Appear Here, a company that specialises in enabling pop-up shops, advertised spaces in Birmingham’s Bullring for two weeks, the entrepreneurs decided to try out the “offline” world. Two years later and they now have a permanent 1,200 sq ft store in Birmingham.

If the high street is going to be rescued, its saviours will be found online. We live in the age of the entrepreneur, a world where anyone can start a website and build global brands overnight on platforms like Facebook, Instagram and Twitter.

Get it right here and you can reach millions of eyeballs in hours, versus the few thousand you might get in Leeds city centre on a weekend.

This new way of doing business doesn’t mean the high street is doomed, it just means the old business model favoured by landlords and developers is. In a world where a new company can be spun up in minutes online, agreeing to a five-year lease is infeasible.

For wannabe retailers, it makes more sense to sell through an online platform that only charges you when you make a sale, rather than pay ever-rising rents or business rates that hit you come rain or shine.

However, there is still value in being in a busy high street site. While Instagram may beat Inverclyde for the sheer number of eyeballs, the social network’s users want to share real world experiences.

For retailers and leisure operators who can create destinations, this has been a boon. It isn’t just appealing to start-ups. Nike has started in-store running sessions, beauty brands like Sephora offer “extreme makeovers”, and pop star Rihanna has been thrilling shoppers with make-up tutorials in pop-up sites.

Audrey Hepburn fans can now enjoy a real breakfast at the flagship Tiffany & Co jewellery store in New York, on Tiffany-blue banquettes in the blue box café. These are all “Instagram” moments, giving shoppers a reason to come to the store and shop, but also build a relationship with the brand.

Burberry and Louis Vuitton have worked hard on immersive experiences, realising that retail is still, for many, a tactile process. They have created theatre in their stores, and their brands have benefited from a closer personal connection with shoppers. Even the world’s biggest global brand is keen to have a presence on the high street.

First Amazon opened some of its own bricks and mortar stores in the US, but the big commitment came last year when Amazon bought Whole Foods, a US-based specialist groceries store for $14bn (£10.5bn), showing that in some sectors, at least, there is real value in local stores. Google is next, launching a project in Toronto to redesign the waterfront there “from the internet up”.

The evolution of shopping into a leisure activity has helped sustain the high street through these tricky times, but there are other reasons why it is too early to proclaim its death.

As the number of freelancers and entrepreneurs in the UK grows, there’s been a huge shift in not just how but where people work. There’s been an explosion of “co-working spaces”, which offer people low cost and convenient working space, near their homes and with resources on tap from coffee shops to printing facilities.

Some of these new spaces are provided by global mega-companies, such as WeWork, but smaller independent co-working spaces are also opening up across the country, many with government backing. Some local libraries are also looking into refurbishing their spaces to provide similar support for entrepreneurs, while retaining their role as an important social space for many parts of the community.

Right now some of the UK’s biggest retailers – brands like M&S, Mothercare and House of Fraser – are shedding stores, having struggled with the switch to online. But the most successful online retailers – like PrettyLittleThing, Boohoo and Asos – may yet seek bricks and mortar stores to build a footprint “in real life”.

The Hut Group, one of the UK’s fastest growing online retailers, recently opened both a fashion store and a spa in the North West.

Stores will become showrooms and collection points – a great place to connect with customers, showcase great stock and pick up items, even if the transaction actually happens online. This is a huge opportunity for creatives to launch their own local businesses when previously they may have only been able to work in a larger brand, if we can get the infrastructure around them right.

Whether it be for community facilities, co-working spaces, building brand loyalty, sharing experiences, or just to grab a coffee and watch the world go by, the high street still has a lot to offer. However, over the next five years, we will see a lot more change in the names over the shop doors.

The challenge to landlords, councils and the tax man is to make bricks and mortar stores (and business rates) fit for purpose again. Shorter leases, flexible business rates that don’t penalise smaller retailers, and more flexible rules on space usage will all help. But we need to start thinking of high street businesses more like WhatsApp and less like Woolies.