The impact of the shopping centre

Westfield London

Shopping centre development is having mixed success at the moment. Highcross in Leicester has just opened and Westfield, London, due to open on October 30th, has been hitting the retail headlines with impressive brands signing up. In other areas, these straightened times are causing schemes such as the revamp of Westgate in Oxford to be put on hold.

While eCommerce is getting all the publicity, the impact of the shopping centre on the face of retail in the last 30 years should not be underestimated. In 1980, a retailer, who wanted a footfall of 50% of the UK population in a year, needed 175 stores. Today, that retailer only needs 50 stores to achieve this aim. Of course, all the stores would need to be in prime locations and would attract high rents.

Looking at the structure of Apple in the UK, it would seem that the company has been taking advantage of this fact. Apple has only 16 stores but all in prime shopping centres. Perhaps a strong brand, a relatively small number of high profile stores in prime locations and an efficient web operation to reach customers who are not walking past your door this week, is the modern retail business structure.

Are all retail leaders fans of Duffy?

Reading the interviews with leading retailers on the back page of Retail Week I was struck by their preference for downloading tracks by Duffy! I then wondered if the last two questions that they were asked could throw any light on retail trends. (I do accept that this is hardly a representative sample of the British public!) So the two questions:

What is your favourite shop?

What was your last retail purchase?

And the results were (I could find 22 copies from the last 6 months):

Leader’s type of company:
Mainly highstreet:18
Mainly e-Commerce:6
Favourite shop:
Independant Local:9
Highstreet Chain:8
e-Commerce:1
Flagship Department Store:3
No decision:1
Channel used for last purchase:
Highstreet:9
eCommerce:5
Not specified:8
Product type of last purchase:
Electronics:5
Music:5 (of which only 2 were in fact Duffy -she should be pleased with nearly 10% of this market though!)
Fashion/home: 9
Other: 4

What I think is interesting about these statistics is the mismatch between the favourite shop (only 1 online) and the actual purchasing habits (5 last purchases were online and some of the 8 not specificied are very likely to have been on line). Despite the majority of these business leaders running mainly bricks and mortar retailers, they prefer to actually buy on line. Meanwhile, each of them to some level will be striving to be the nation’s favourite shop. There is also a marked preference for independant retailers (local delis featured highly) in the favourite shop category.

It is a tall order for a chain of shops. First they must beat the independant retailer in terms of service to gain the position of favourite shop and then they need to convert this position into sales. It’s a challenge that most of this group of business leaders is grappling with right now.

Could Chrome tackle basket abandonment?

Google Chrome

So Google has launched a browser (Chrome), aimed at running web apps rather than just loading pages. Google has a strategic aim to move us to “cloud computing” – keeping our information and applications on the internet. Upgrades will happen “out there”. No need to upgrade the operating system (and buy Microsoft) to run the new version of the software – it will simply load in your old browser.

With Retail Answers’ long track record of developing web applications in .NET, I asked one of our developers what she would look for in a browser specifically designed to run web apps. And the answer? Get control of the back button. She wanted to be able to hook the code under the “back” or “previous” link on the pages she develops into the back button so that the confusion that occurs when the user goes back illegally would be avoided.

What a difference this would make to basket abandonment! How many times have you got caught in a tangle when authorising cards, finalising delivery addresses and checking the contents of the basket?

DSGi’s results tell a story

DSGis quarterly results, announced earlier this week, made familiar reading. Total sales down 7%, the computing category was down 12% but the eCommerce division was up 6%. Now DSGi operates in the sector which (in common with music and books) has seen the greatest consumer transition to internet shopping but I fell to wondering how British retailing will be structured when we emerge from the downturn which seems to be predicted to last longer by the day.

What does the British public want from the highstreet? Does the public want a highstreet? What can retailers do to make the public visit the highstreet and spend money there? In a multichannel world, can retailers justify the expenditure on rent and staff if the highstreet simply supports the brand?

From this uncertainty there will be winners and losers. Almost certainly, technology will play are part in deciding which companies those are.