Following the recent recession in the UK, there has been a growing air of confidence among retailers, that (finally) shoppers may be willing to spend their cash. This cautious optimism has been witnessed in our EconomyTrack study, running since 2008, indicating that people now have more disposable income (with far fewer saying they are going out less often). For many years, discussions have focused on the declining significance of the in store channel for retailers, with many fearing it has lost the strength in the digital era.
TOWN CENTRE REGENERATION IS BEGINNING
Recently, I was reading an article in a Retail Week publication discussing the £2bn regeneration plan dubbed ‘Vision 2020’ in Newport. This article highlighted that large investments are still being made in physical stores. This town centre regeneration is one of several that are happening across the UK in 2015. Many leading retailers are demonstrating their confidence in these regenerations by opening new stores there, including clothing retailers H&M and Topshop. Retailers are filling the vacant areas of towns that once held shops that have become victims of economic instability, at a time when shoppers are starting to have more disposable income.
THE FUTURE OF RETAIL
Despite shoppers beginning to experience the benefits of an improving economy, we know that shopping behaviours have changed compared with pre-recession;
For example, attitudes towards eating out at restaurants have improved since 2009 with far fewer saying they are eating out less (2009: 55% agree vs. 2015: 35% agree)
Shoppers tend to use a multitude of channels for researching and purchasing, and the online channel plays an ever increasing part, leaving the in store channel under threat. Our consumer data from EconomyTrack shows that shoppers have changed their shopping behaviour for good.
“I have changed my shopping behaviour for non-grocery items” has halved between 2009 and 2015 (54% agree vs. 27% respectively)
With the options online now plentiful, stores themselves and the retail ‘zones’ in our town centres are having to provide an edge; a reason for a consumer to visit rather than ordering online from the comfort of their home with the job of persuading the shopper more difficult than ever. New retail developments are therefore having to persuade shoppers to visit, with new developments looking further than retail, to leisure and dining facilities, creating a destination offer shoppers can experience.
We know that UK consumers are going out more than in previous years with far fewer now saying they are “going out less often” (2009: 49%, 2015: 31%)
On the South coast, not too far from our offices in Winchester, there are two examples of ‘destinations’ that go beyond retail. They bring leisure and dining into the offering.
- Gunwharf Quays in Portsmouth recent advertisement talks not only about the range of retailers, but also the restaurant and entertainment options on offer. Their marketing emphasises the ‘whole day out’ experience.
- Watermark West Quay, a new development in progress, is next to the current West Quay shopping centre in Southampton which will include a cinema and public space, enhancing the retail experience by offering a variety of additional facilities.
There are many more examples of these ‘destination’ developments in town centres across the UK, with developers and retailers understanding the success of these formats. Winning back shoppers now that they have more money to spend, and more channels to purchase from, stores need to give something ‘more’, and I believe the mix of retail, leisure and restaurants is one way ‘in store’ shopping can remain a significant channel. Ensuring future regeneration plans secure the right mix is the next key challenge!
THE ROLE OF INSIGHT
There are many challenges that face retailers in today’s market, and we are here to help from customer experience to range reviews, and exploratory consumer research. Let’s not forget that customer experience is an important part of keeping in store shopping an attractive channel for shoppers. IKEA is a great example of this – a retailer that has almost become a destination in itself.
Becca Allen is a Senior Research Executive for the retail and customer experience team.Subscribe