A Future for Independent Retail?

June 28th, 2013   •   no comments   

In my last post I argued that we already have too many shops and that developers need to wake up and smell the coffee. I have also previously contended that there is a future for independent retailers – no matter how small or niche – that use technology to enhance their visibility and create a sense of community around them.

We already have too many shops and that developers need to wake up and smell the coffee.

Too many shops? Should developers wake up and smell the coffee?

Now, a recent Retail Week article celebrating their 25th Anniversary has asked industry leaders to predict what the next twenty-five years have in store. Some of their answers should give hope to independent retailers, and a lot sooner than you might think. But, like it or not, much of the future will be determined by acceptance of the internet!

Firstly, I think we have to acknowledge that buying music, books, and film, by any other means than the internet is now pretty much the preserve of the purist or hobbyist. We could have a lively debate about whether this is ‘good for us’ as a society but one would have to be distinctly Canutist to even contemplate pushing back that particular tide. But whilst there is still a pre-net generation around that appreciates the hunt for these items in their old-fashioned form either for scholarly, acquisitive, or serendipitous reasons, isn’t there an opportunity for independents to feed off their niche interests?

And the internet isn’t all bad for a number of other reasons. Retail Week’s article quotes Tim Steiner, chief executive of online retailer Ocado as predicting that as much as 60% of grocery shopping will go online within 10-20 years. He would say that of course, but if only 10-20% shifts online it will justify my argument that  out-of-town ‘superstores’ are outmoded and wasteful. But more importantly, once all bulky grocery items – and probably most white goods – are ordered online and whisked to your door or collection point by white van, there is a tremendous opportunity for community and convenience shops to supply the daily needs of shoppers, be that milk, wine, meat, fish, or fresh fruit and vegetables; in fact anything requiring choice and discrimination on the part of the purchaser.

Future demands: New shops and homes versus green space?

As a society we are struggling with the competing demands for new homes versus green space. Therefore should land already sullied by failing out-of-town developments be turned over to housing – halting the destruction of more green field sites – and  should we think again about the future role of town centres; accepting that more people will live there, and others will go there for reasons other than shopping. That might be to access entertainment, culture or experiences, and to some extent that is already happening. In my own town I can think of two small independent shops that on the face of it don’t look viable to my retail eye. One sells costume jewellery, the other pottery, but I suspect neither makes the bulk of their turnover this way. One runs bead stringing and jewellery making parties and events for kids, while the other gives children and their grown up minders the chance to make and decorate pottery. Both shops are ‘experiential’ in their offering; they may not be Disneyland but they provide entertainment and satisfy a craving for hand- made authenticity. Are they a sign of things to come?

Another of Retail Week’s experts predicts that the proliferation of mobile gadgets will mean that retailers will instantly be able to check their competitors’ prices, matching them if they wish, and levelling the price playing field. The theory goes that when selling commodities there are only two things you can flex – either price or relationships – to make your offer more attractive. Therefore with price competition largely out of the picture in the future, the service received from their supplier may be the principle determining factor for customers. Again, excellent service has – at least in theory – long been the maxim for independent businesses, so this really could prove to be fertile ground for them.

As a former spokesperson for the retail jewellery sector, I often expressed the view that the UK’s jewellery manufacturers should give up the unequal fight with mass market Chinese factories and refocus their businesses on fulfilling the individual needs of discerning customers in the UK. My argument – which seldom won me any friends – was that by working in conjunction with jewellers they could achieve rapid turn-around on customised or unique designs made to customers’ own specifications; thus satisfying clients’ desire to own something individual and authentic, and at the same time pandering to their ‘creative’ urge. Already achievable using traditional techniques, CAD / CAM technology increased the possibilities, but now with the advent of 3D printers we could see a step change in jewellers’ ability to respond to demand. Could this be another opportunity?

Lastly, I read in the papers about research which shows that high-street jewellers are closing in favour of online providers. I’m not sure I wholly accept that gloomy conclusion, and believe that there is still a strong desire for human interaction in certain shopping scenarios. For instance, the skills of a jeweller are a reassurance when making an expensive purchase and can guide your hand when designing your own unique piece, whilst your fishmonger or butcher harnesses his abilities to help you select the very best fresh produce. In these, and many other instances, technology is no more than an enabler, and not a complete substitute for the human touch. Isn’t it in just these circumstances that the independent still has an opportunity to excel, and will continue to do so well into the future provided they take strategic decisions now?

Michael Hoare

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