In recent weeks we’ve been hearing from various sources that “the future of the high street isn’t retail”. I was thinking about this, because I believe that this really depends on how you define retail…
What is a retailer?
To me a retailer is a business that welcomes a consumer, a member of the public, with “open doors” although in fact they may well be online only, or a market stall!
This has changed in the past few years… Nowadays I believe a retail business can include the obvious – shops – but also the less obvious – cafes, bars, hospitality, leisure, salons as well as estate agents, recruitment, banks, post offices, libraries and even tax advisors and solicitors!
Why do I consider so many different types of business to be retail businesses?
The reason why I believe that ANY consumer facing / serving brand is essentially a retail business is because ALL of these businesses NEED to have a retail mind-set these days – customers EXPECT a level of service, to be engaged, to be provided with a considerate and appropriate level of contact / advice and to be informed of promotions, activities and events.
Retail isn’t exclusively about selling a product any more either… certainly the lines became very blurred when swathes of product was digitised! Salons, bars, cafes etc. may have considered themselves “retail” for years, and they certainly were from a business rates perspective. They sold little for consumers to take home with them however, the vast majority of their offer was for “consumption” or rather “enjoyment” on their premises. Other businesses such as banks, post offices, estate agents, tax advisors etc may seem even less typically “retail” but again offer a customer-facing, service-led proposition, open to the general public and with limited product that can be “taken away”.
The fact is we need to redefine retail from the old view of “shops” which simply provided a “break-bulk” service enabling consumers to procure and take-away small quantities of physical product supplied to the retailers, in bulk, by brands and manufacturers for individual, at-home consumption. We need to define NEW view of “shops” and retail in general as the industry sector which provide the general public with access to products, services and experiences…
The NEW definition of a retailer…
We must also not forget that retailers are businesses who aim to produce a profitable outcome for the business owner… so including “public services” such as libraries in the mix might be a step to far for SOME but I am not so sure… I think we DO need public services to think more like businesses. Let’s not forget that a library has a budget, it has to operate efficiently within a budget, it has to contribute social value and therefore the definition of a profitable outcome might not be about profits as cash, but it would be about contribution to the community.
More and more businesses are renting retail space, paying a commercial value for that space, but are social enterprises, focused on contributing more social than economic value. As long as that space produces the revenue it needs for landlords (and potentially a wide variety of pension funds and investments) and contributes a fair amount in the relevant taxes (business rates) then maybe we can see a shift toward more businesses that make a stronger social than financial contribution to a community.
*** Note: This blog isn’t going to talk about whether or not landlords and rents are fair / appropriate, nor about the business rates burden… the reference to these above is merely to acknowledge that “commercial property” will still need to be treated as such. We can’t expect empty property to be “handed over” to social enterprises as the impact will be further damage to the eco-system… this is a WHOLE other blog / debate! ***
So, my suggestion is that rather than saying “the future of the high street isn’t about retail”, let’s start to redefine retail… let’s understand that any entity which provides consumers with access to goods and services from premises, or indeed via the internet, should consider themselves retailers and start to ensure that they are contributing to the economic and social value within the community and that they are delivering a great experience to customers.
Once we’ve got that nailed – the contribution to the community and the customer experience – I think we’ll have a shift in the mix of who occupies high street space, but we’ll see a wonderful evolution of the high street from one which was once all centred on trading to one which is based on providing for the increasingly diverse needs and wants of each and every local community…
To summaries, the future high street IS all about retail, it’s our understanding of what retailing means that has to change, and this is something I will be discussing further at the forthcoming Future High Street Summit.