Affordable luxuryUS retailer David’s Bridal arrives in the UK
Global affairsInternational retailers make their mark in the UK
North and southThe latest developments in Glasgow and Oxford
The big drawWhy department stores are thriving in the UK
winter 2013
The retail industry looks to the UK as a beacon of quality retailing. On a global scale, few could argue with the sector’s advanced business models, closeness to its customer, and ability to keep up with ever-changing consumer behaviour.
The feature on department stores (page 14) illustrates just how adept the UK market is at dealing with change. Many department store groups are thriving – for instance, John Lewis has posted a profi t rise this year – and it’s fascinating how they’re able to develop new formats to reach customers in different ways. In the UK, department stores are very strong, established brands with top-quality operations, which has helped them expand. In fact, across the UK retail sector, advances in multichannel are the envy of many global markets. The feature on mobile (page 28) shows the creativity with which retailers are using the platform to drive sales and customer loyalty both online and in store.
The ability to evolve is one of UK retail’s strengths. Consumer research on page 17 shows retail parks are becoming ever-more attractive. They have developed from being an accessible collection point for bulky goods to more attractive shopping destinations with a tempting mix of tenants from fashion to leisure.
UK retailing has its challenges, of course – but many international retailers view the UK as a promising market in which to expand their global presence (page 10). The success of many international brands in the UK indicates how, despite the market being a crowded one, it holds opportunities for those who can stand out from the crowd and meet customers’ expectations.
The evolution of retailers’ property portfolios is critical to their ability to survive and thrive. Property requires strategic thought, and only the very best retailers realise the importance of property talent (page 30). These are the businesses that are investing in their property teams to take the business forward. And these are the ones that will continue to thrive in the ever-competitive world of UK retailing.
UK retail’s strength is its ability to evolve
Foreword
Richard Akers, executive director, Land Securities
winter 20132
28
14
17
Many international retailers view the UK as a promising market in which to expand their global presence
14
17
10
6 We meet David’s Bridal UK managing director Myriam Ben-Yedder
winter 2013 3
Contents 4 News All the latest deals, initiatives
and retail developments from Land Securities’ shopping schemes
6 Interview Myriam Ben-Yedder on the arrival of US chain David’s Bridal in the UK
10 International Why retailers are expanding their global presence on UK shores
14 Department stores With an abundance of choice under a single roof, department stores remain convenient and aspirational destinations
17 Retail parks Consumer research shows how retail parks are becoming ever-more attractive
21 Development Land Securities’ plans for two proposed developments in the North and South of the country
22 Oxford The city’s retail off er is to be transformed with new development plans and the repositioning of its Westgate shopping centre
25 Glasgow As the UK’s best retail location outside London, A1 reports on plans to enhance the retail and leisure off er in the city
28 Mobile The impact of the growth of mobile as a retail channel online and in store
30 Talent As the property role shifts, A1 looks at how retailers are managing talent in their teams
32 Retail view Land Securities’ Richard Akers and Claire’s Europe president Beatrice Lafon on the state of play in the retail market
34 Portfolio An overview of Land Securities’ shopping centres, outlets, retail parks, leisure schemes and developments
22
News
Produced by
develoPment
Boutique cinema chain Curzon is to open in London’s Victoria next year, further boosting the area’s leisure offer.
The signing at 62 Buckingham Gate is Land Securities’ latest commercial development and will bring the first cinema to SW1.
Due to open in spring 2014, the five-screen cinema in the development’s basement will be the sixth in the capital for Curzon. This follows success in prestigious locations including Mayfair, Bloomsbury and Chelsea.
Further leisure signings at the development include deli and cafe Benugo and healthy food chain Leon,
which are planned to open for Christmas trading. A 5,430 sq ft unit for tapas restaurant Iberica has signed in the nearby Zig Zag building on Victoria Street.
Land Securities head of development in London Colette O’Shea said: “Victoria is fast making a name for itself as a place for people to dwell and spend quality time from morning to night.”
62 Buckingham Gate is the most significant commercial development to open in London this year, and an important step in Land Securities’ £2bn transformation of Victoria.
Cinema chain Curzon to open in London Victoria
initiatives
Record-breaking student numbers descended on annual Student Lock-ins at Land Securities’ schemes in September.
About 48,000 undergraduates flocked to late-night events at Trinity Leeds and St David’s shopping centre in Cardiff, taking advantage of discounts, goodie-bags and freebies. In Cardiff, footfall increased 27% from 22,000 to 28,000 in 2012. At Leeds, an estimated £500,000 was spent by 20,000 undergraduates.
More than 170 retailers and restaurants from both schemes took part, with many reporting that sales
exceeded a usual day’s takings within one hour. Participating retailers included Topshop, Urban Outfitters, H&M, Schuh, Yo! Sushi and Superdry.
A Schuh spokesman said: “Just two hours in, we had more than doubled our takings on the 2012 event, and what we usually take on a Saturday. This event is a great opportunity to meet new students in the city.”
St David’s centre director Steven Madeley added: “We’re thrilled by its success. The event saw thousands of shoppers packing into the centre to make the most of the incredible discounts on offer.”
Student Lock-in nights hit record numbers
Editor Charlotte Hardie
Writers mark Faithfull, Gemma Goldfingle, alex lawson, George macdonald, Keely stocker, Rebecca thomson
Supplements Production Editor tracey Gardner
Design forty6 design ltd www.forty6design.com
Publisher tracey davies
For Land Securities
Claire Reynolds [email protected] t +44 (0)20 7747 2390
Sejal Lad [email protected] t +44 (0)20 7024 5411
© Retail Week
all material is strictly copyright and all rights were reserved. Reproduction in whole or in part without the written permission of Retail Week is strictly forbidden. the greatest care has been taken to ensure the accuracy of information in this magazine at the time of going to press, but we accept no responsibility for omissions or errors. the views expressed in the magazine are not necessarily those of Retail Week or land securities.
a1 is printed by Headley Brothers ltd.
ashford, Kent
students took advantage of discounts, goodie-bags and freebies
winter 20134
Other news
X-leisureLand Securities has acquired an additional 35.6% in the X-Leisure Unit Trust for a total cash consideration of £104m, taking its total ownership to 95%. The X-Leisure portfolio comprises 16 schemes, totalling 3.1 million sq ft of leisure and entertainment space, including X-scape in Milton Keynes and Brighton Marina. Land Securities is now the UK’s biggest leisure landlord.
Galleria, HatfieldThe Galleria in Hatfield has completed new deals with Prezzo and PizzaExpress and premium fashion retailer Gant has expanded its floor space, which altogether will take a combined food and retail space of 10,000 sq ft.
Land Securities portfolio director Deepan Khiroya said: “The expansion of Gant, followed by the arrival of PizzaExpress and Prezzo, demonstrates how we work with our tenants to commercially meet their demands and increase their presence within the scheme.”
White Rose lettingsThe retail offer at Leeds’ White Rose Shopping Centre will be further boosted with the signing of several deals. Simply Be, Jacamo and Quiz have all taken new units, while Bank has doubled the size of its current space. Jacamo and Simply Be head of retail development Jeanette Carter said: “White Rose is one of the key go-to destinations for shopping in Leeds, so it made perfect sense for Jacamo and Simply Be to open here and capitalise on the busy footfall.”
The best of enterprise talent in the North came together last month to celebrate at the Morley Business Awards in Leeds.
More than 200 people attended the event at Morley Town Hall, supported by the White Rose Shopping Centre in Leeds and Land Securities, to hear the win-ners of the eight categories. These included retailer of the year, service provider of the year and food and drink outlet of the year.
White Rose Shopping Centre manager Dean Stratton and Land Securities portfolio director
Gerald Jennings presented the award for manufacturer of the year, which was won by local cake retailer Board to Tiers.
Stratton said: “We’re proud to be part of the com-munity in Morley and delighted to once again work in partnership with the chamber to support this flagship event. It recognises the many successful businesses and individuals, whose hard work is ensuring that the town has a bright future.”
The event has been supported by White Rose and Land Securities for the past three years.
White Rose and Land Securities host awardsaWaRds
sHoPPinG CentRes
Trinity Kitchen, a pioneering take on food retailing, was launched at Trinity Leeds in October.
The 20,000 sq ft food hall combines a diverse mix of emerging high street restaurants, cafes and bars with the UK’s best street food vendors.
Alongside the hall’s seven permanent restaurants, cafes and bars, including Pho, Chicago Rib Shack and 360 Champagne & Cocktails, five new UK street food vendors will be chosen to take part each month. These will be selected by Richard Johnson, food jour-nalist and curator of the British Street Food Awards.
Johnson says: “The street food revolution is on the rise in the UK, and we’re bringing the very best of it to Leeds with the opening of Trinity Kitchen. Shoppers will be able to experience different foods from around the world, delivered in an indoor street food market every single day, seven days a week.”
The Trinity Kitchen launch forms part of Land Securities’ evolution of the retail market. In response to consumer demand, food and beverage facilities at Trinity Leeds have increased from 13% to 24% since the development opened in March this year.
Trinity Kitchen kicks off street food revolution
shoppers can experience different foods from around the world
winter 2013 5
Brighton marina
winter 20136
Weddings are an emotional affair – even for retailers at the helm of bridal businesses, laughs Myriam Ben-Yedder. In the six months since being charged with spearheading US
wedding chain David’s Bridal’s UK venture, the former head of Marks & Spencer womenswear has been reduced to tears on numerous occasions after hearing customers’ stories. “I’ve never had this in 22 years of retail,” she says. “It’s an emotional business which is unique in retail. I love that.”
Tears aside, UK managing director Ben-Yedder is serious about the task at hand. Last month the retailer opened the doors to its first 11,000 sq ft, two-storey international flagship to swarms of brides-to-be. Moreover, these customers had reason to be happy. UK retailing may be among the most advanced in the world, but the same cannot be said of its bridal industry. Dominated by small independents with a niche selection of dresses, its model hasn’t changed for centu-ries, with the exception of a few department stores launching small boutiques. Now, though, that’s about to change.
To give an idea of David’s Bridal’s popularity in the US, Ben-Yedder says nearly one in three US brides walks down the aisle in one of its dresses. There are more than 2 million weddings in the US every year. So why is it so popular? There are numerous reasons, says Ben-Yedder, including quality and value for money. “The first store opened in 1950 and it’s grown to the scale that we are able to produce couture-quality dresses at prices of well below what you would typically find in the marketplace.” It designs, develops and produces all of its own dresses – often through tie-ups with big-name designers such as Vera Wang – largely through joint ventures with Asia.
Interview
forward…With dresses ranging from £295 to £1,650, “our customer
is every bride who wants to buy a couture-looking gown without spending £2,000 to £3,000 or more,” she says.
Another reason why the brand has struck a chord with so many millions of US brides is the fact that it caters for more than just the bride herself. They can visit a store and find a dress for the entire wedding party. “It’s about convenience for the bride. We know that today’s bride is busy. They have work, families, schools to deal with as well. She still wants to have her dream day, but doesn’t necessarily have the time that brides decades ago may have had.”
And so its store at Westfield Stratford City has 6,000 sq ft devoted to bridal dresses, and a further 5,000 sq ft for brides-maids, the mother of the bride, eveningwear and special occasion dresses. It has more than 200 styles of dress, with bridesmaids dresses in a choice of 22 colours. Location wise, its choice of shopping centre works perfectly for its operating principles of brand accessibility.
Although reticent to discuss specific plans for the UK market, there is a sense that David’s Bridal is aiming high. Nothing appears to be off limits. “It’s a little premature to give specifics, but we want to be in all major markets in the UK, and potentially will look at anywhere from Birmingham to Glasgow,” she says. In time, the retailer hopes to launch a transactional website.
So why has the UK been singled out for the chain’s first venture out of North America? One reason is the parity between the US and UK marketplace. Approaches to weddings are similar between the two countries and have the same traditions when it comes to dresses and bridal parties. Secondly, says Ben-Yedder, the retailer believes the UK could benefit from a transformation that has already taken place in the States. “The UK market looks like the US market used to – a whole range of mom and
The bridal market has been shaken up by the arrival of US chain David’s Bridal. Charlotte Hardie talks to UK managing director Myriam Ben-Yedder about its affordable luxury mantra and its plans across the pond
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7winter 2013
winter 20138
pop shops with distinct specifications that aren’t able to bring value to the market.” And thirdly, the UK – and London specifically in terms of the flagship – was attractive because of its fashion reputation. “We offer incredible style and incredible value, so we wanted to open a store in a market that leads on fashion,” she says.
Ben-Yedder’s fashion background promises to stand her in good stead for this role. The bridal market, she explains, is becoming more design led, with diffusion ranges from a variety of designers so an understanding of fashion is valuable. What’s more, fashion’s supply chain models are in demand in the bridalwear space. “Speed to market has become more important in bridalwear in order to reduce lead times, and a very broad sourcing background is invalu-able for the breadth of product we offer from tiaras and footwear to intricately handmade bridal gowns,” she says.
The brand was an attractive proposition, Ben-Yedder adds. Being a heritage business, customers can trust David’s Bridal will deliver on its promises, she explains, and it’s “an incredibly exciting new venture at the cornerstone of our international expansion”.
A refreshing changeIf, as anticipated, David’s Bridal gains a widespread foothold across the UK, many brides will have a pleasant wake-up call. The current norm for bridal dress shopping is an antiquated one. Often advised to visit a bridal boutique as much as nine months before her big day, the bride-to-be then chooses from an often small selection of dresses that are often all in a sample size 12. Should the customer be smaller, they are pinned into it. Bigger, and they might have to try it on without actually being able to do it up properly. No customer would buy any other type of dress in this way, which is why David’s Bridal does things differently. Its dresses come in different sizes to try on – from a 6 to a 36 – and there is also an alteration team on site so you could potentially take away your dream outfit in two days – or even on the day. It’s also very clear about prices upfront. “We don’t charge an alteration service. The team have done such a good job in creating affordable luxury that we want them to be transparent.”
Unsurprisingly, customer service is at the top of the chain’s priorities. “Customer service is absolutely central to every-thing we do,” says Ben-Yedder. “Our focus is on her.” In the US, its store consultants, as they are called, receive “some of the most expensive” customer service training in the country, focusing on everything from trends to silhouettes to suit different figures.
Its approach is refreshing. Enter the average independent bridal boutique with a camera, and you’re doing so at your peril. Taking photographs of a bride in a dress is strictly forbidden by many, for fear of the bride-to-be taking the photo to a dressmaker to copy at a fraction of the price. David’s Bridal doesn’t share such concerns. “One of the things we encourage in our stores is taking photos and sharing your experience. Many places like to keep things contained. We want brides to share and take a picture of
every dress they’re in.” This helps with its brand awareness on social media, too. What better platform to post photos of prospective dresses than Pinterest? “Social media is incred-ibly useful,” says Ben-Yedder. “A bride in her 20s is as connected to digital media as she ever has been. It changes the way she shops, and the UK customer is far more engaged with online planning and online resources than in the US.”
It also has a planning tool on its website called My Event, in which a bride can create mood boards, plan budgets, connect with her wedding party and share details of her wedding on news feeds.
As Ben-Yedder points out: “We don’t just sell to the bride and her party. We help them plan and we make it special.”
The close attention the retailer pays to understanding the needs of brides and what they want from their shopping experience pays off. Ben-Yedder spent much time in the US getting to know the business when she first joined the retailer ahead of the UK launch. “One customer’s fiancée worked in the army and was leaving to go on tour, and they had to rush
Facts and Figures n david’s Bridal opened its
first store in Fort Lauderdale,
Florida, in 1950
n it has 309 stores in the us,
and nine in canada
n about 60% of all us brides
shop in david’s Bridal
n it aims to bring luxury at
affordable prices, partnering
with Vera Wang to launch
the WHite by Vera Wang
collection in 2010 and in
2013 with Zac Posen, launching
in the uK next year
n it launched its first uK store last
month – a two-storey, 11,000
sq ft venture selling outfits for
the entire wedding party
n its London flagship will house
more than 200 styles of dress
– bridesmaids dresses are sold
in a choice of 22 colours
Interview
We don’t charge an alteration service. The team have done such a good job in creating affordable luxury that we want them to be transparent Myriam Ben-Yedder, David’s Bridal
winter 2013 9
through the wedding in a matter of days. They did it and she was so happy,” she recalls. Another customer had bought her dress from another store and, two days before the wedding, collected it to find it didn’t fit. “She ended up buying a bouquet of flowers for a David’s Bridal consultant who sorted out a new dress for her within two days.”
But it would be impossible to discuss the challenges of running a bridal business without mentioning the word ‘bridezilla’ to Ben-Yedder. One might assume that this is not the easiest customer group to work with on a daily basis, but she laughs off the notion. “I think the media has certainly overblown the behaviour of a bridezilla,” she smiles. “Most are wonderful, kind, generous women to deal with.”
She concedes that the consumer is definitely “emotional about her purchase”, but sees that as a good thing. “What’s exciting is having the emotional connection you make with your customer and to be able to share that moment with her. It’s such a great privilege to bring a new and innovative business to the UK,” she says.
The challenges of the role instead lie in other areas. One, she explains, is replicating the success it has in the US. “It’s so successful over there that we need to make sure we provide her with that same experience.” And, of course, the bridal market is not one where you can rely on too many repeat visits, so it will be keen to gain a foothold among the impressionable and enthusiastic bridal population as quickly as possible.
Unquestionably, this US retailer’s launch promises to shake up the UK wedding market. It has identified a clear gap into which the department stores have only been able to dip their toes until now.
In the US, thousands of David’s Bridal store consultants receive invites to the weddings of happy customers. They might not always be able to attend given that weddings are often on Saturdays, but if the brand can replicate even some of the success it has had in the States, many an embossed invitation could be landing on the doormats of its UK employees, too. l
MyriaM Ben-yedder’s career in FasHion 2013 to present uK managing
director, david’s Bridal
2010 to 2013 brand and retail
director, Firetrap
2008 to 2010 brand director,
Full circle designs
2002 to 2008 head of planning,
store and retail marketing group
and, previously head of retail,
womenswear, Marks & spencer
1994 to 2001 various, including
european operations manager,
gap
david’s Bridal offers customers dresses to try on in a variety of sizes
and prices compared with some more traditional boutiques
winter 201310
International
On a global retail level, the UK has it all. Savvy consumers, forward-thinking retail brands, eye-catching store designs, an advanced online market, top-quality supply chains… the list goes on. It is, without doubt, a crowded
market but for strategic-thinking international retailers with a point of difference and the right expansion strategy, the UK market is reaping rewards.
In the past five or six years, international names haven’t just crept over – a veritable influx of new names has been keen to test their brands on British turf (see box on p12). Just a handful of those which have landed here since the mid-2000s include Gilly Hicks, Hollister, Banana Republic, Cos, Forever 21, J Crew and Victoria’s Secret. Among the latest high-profile entries is US retailer David’s Bridal, which opened the doors of its first flagship in London in August.
“Before, it was more about UK brands going abroad, but in the last two years we’ve seen more foreign brands moving here,” says Silvia Rindone, a director in the retail consulting practice for Deloitte. Isabel Cavill, an analyst for retail consultancy Planet Retail, says it is often London, with its strong economy and high tourist numbers, where many brands really want to be. “London is an important market and a big city – it has a strong shopping culture, more so than other European markets,” she says. “The UK consumer is very open to new brands.”
What’s more, the Retail International Programme Expansion Index by property consultancy EC Harris, published in September 2012, named the UK as the second easiest market for retailers seeking to expand. Germany
topped the list, but the UK was singled out for its “avail-ability of prime locations, the maturity of retail property and an open business environment”.
Gap-owned Banana Republic is among the big US names to have moved to the UK, opening its first store just before the financial crisis started in March 2008. Finding a gap in the saturated UK market is a challenge, but Banana Republic proved it could be done. Its upmarket designs without the high-end price tag struck a chord with consumers. Meanwhile, H&M’s upmarket fascia, Cos, has found a firm fashion following. Its products have impressed the critics and grace the fashion pages of magazines week in, week out, with customers wooed by its unusual fashion lines, quality fabrics and affordable pricing.
An ideal locationPart of the reason for the UK’s increasing popularity with international retailers is its helpful positioning – both geographically and culturally – between Europe and the US. “The UK is an interesting stepping stone for interna-tional brands,” Rindone says. “For the US, it’s a really close country from a cultural perspective and geographically it’s close to Europe. The UK consumer is a hybrid between a continental consumer and an American consumer.”
The UK’s cultural similarities with the US means British shoppers are keen to try American brands – as Rindone says: “UK people really get US brands, so they’re attractive.” From the Americans’ standpoint, opening in the UK means they are a step closer to Europe. They can use it as a base for gaining an understanding of how the region works, and where might be a good market to tackle next. In addition, many European brands have
Making it big in
blighty US lingerie giant Victoria’s Secret opened its first UK store on London’s Bond Street
London is an important market and a big city – it has a strong shopping culture, more so than other European markets Isabel Cavill, Planet Retail
International brands have flocked to the UK over the past few years. Rebecca Thomson
considers their success and finds out more about the
opportunities afforded by the domestic market
11winter 2013
a UK presence, so US retailers can use it as a measure of how their stores might perform against their European counterparts.
From the European perspective, the cultural similarities mean the UK is a good testing ground for those brands who eventually want to go to the US. “The UK is a really interesting market because of that,” says Rindone. “They all come here to test the ground.”
Aside from the UK’s helpful positioning, there are a few factors that make it an attractive market in its own right. Land Securities executive director Richard Akers says the country’s closely packed population also helps entice brands. “There are difficulties and risks in operating in the UK, in particular a high level of occupancy costs and higher business rates, but you can get high densities from store openings.”
Plus, of course, entering a new market means a fresh start in terms of image. Akers says retailers often pitch for a higher end of the market when trying new territories. “The UK is giving international brands a chance to reposition themselves with a new demographic. Banana Republic is fairly everydaywear across the US but quite g
US retailer Hollister has 30 UK stores
Danish budget retailer Tiger opened five new stores in 2012
inTernaTionaL BranDS To SUcceSSfULLy arriVe on UK SHoreS
n Abercrombie & Fitch and Hollister The high-profile
US retailer of premium casual clothing for the youth
market launched in the UK in 2007. The abercrombie &
fitch flagship is on London’s Savile row, with the more
affordable Hollister brand rolled out in 2008. Hollister
has 30 UK stores.
n Gilly Hicks Part of the abercrombie & fitch and
Hollister stable, the lingerie brand opened six stores
in the UK between 2010 and 2012. Brand extensions
are focusing on sales through its Hollister store
network.
n Banana Republic The brand, owned by US giant
Gap, launched its first store in 2008, and has eight
stores around the country.
n Forever 21 The US fast-fashion retailer opened its
first UK store in 2010 in Birmingham. it now has
seven stores.
n Cos, Cheap Monday and Monki european clothing
giant H&M – which has more than 200 UK stores –
has launched all three new-format fascias in the
UK market since 2007.
n Nespresso The premium coffee brand, which has 270
stores worldwide and a strong online UK presence,
opened its first UK standalone store in Manchester in
april. it is opening two central London sites and more
across the UK, targeting city locations.
n Krispy Kreme The US doughnut brand arrived in
the UK in 2004, and has more than 50 coffee bars
and kiosks.
n Tiger Danish budget variety retailer Tiger announced
it is ramping up its UK expansion in 2009. it opened five
new stores in 2012, and now has a total of 20. it also
had a record year in 2012, as pre-tax profits soared
101% to £1.6m.
n Victoria’s Secret The US lingerie giant signed its
first UK store on London’s Bond Street in 2010. it
is now expanding in the north of the country,
including opening a store in Trinity Leeds
shopping centre.
n J Crew The US fashion brand entered the UK this
year via three London stores opening in october
and november, with a flagship on regent Street,
a womenswear boutique in Brompton cross and
a menswear store on Lamb’s conduit Street.
n Taking Shape australian plus-size retailer Taking
Shape, which has 130 stores across australia and
new Zealand, began its assault on the UK market
with the opening of five stores in September
this year. it aims to expand to 21 shops by
early 2014.
n Jysk The Danish furniture retailer opened its first
UK shop in 2008, and new openings in September
will take its store estate to 10. it plans to increase
this to 20 in the next year.
International
exclusive in the UK. Victoria’s Secret has located its new store on Bond Street. It helps it maintain a price level.”
Rindone says one thing many of these brands have got right is the marketing surrounding their launch. “There has been some really clever marketing before these brands arrive, up to a year beforehand. It has focused on creating brand awareness and creating an appetite for the brand so everyone is ready to buy. We’ve seen it from both US and European brands.”
Building up a pictureMarketing is not the only aspect brands have pitched correctly. In many cases, much of the reason for their success is the development of a thorough research process. Some are now using more of an online presence to learn about the market. They are making a concerted effort to understand what tastes are and what people will be interested in, and what kind of a profile brands need to succeed in the UK.
Plus, as any retailer knows, strong product is imperative for those entering a new market. Rindone says: “If the product is right, it will be a successful brand.”
But it is also important to keep momentum up after the fanfare surrounding openings fades. Rindone says: “After the initial hype starts to flatten you need strong product and
The UK consumer is a hybrid between a continental consumer and an American consumer Silvia Rindone, Deloitte
winter 201312
wanting to expand globally. “I think retailers have become more professional over the past decade. This is not the beginning of the 1990s – more retailers understand what they need to do to unlock international markets.” This means there is much more study of a market before entering, rather than just opening stores and seeing what happens.
What’s more, while the logical response to the economic downturn might seem to be to steer clear of markets with sluggish growth, it has actually spurred retailers on to expand as they look for new sources of growth outside of home markets. The UK’s retail market is beginning to pick up, and those retail businesses with a strong strategy and a strong point of difference are experiencing the benefits.
Nevertheless, international brands will need to work hard to remain relevant. The fashionable UK consumer, faced with so much choice and quality, can be fickle. “The market is competitive and crowded,” says Rindone.
No market is without challenges, but if retailers can get UK expansion right, it holds boundless opportunities. And for the very best international brands who desire a presence in one of the prime retail markets in the world, it’s a challenge they are more than willing to take on. l
a clear unique selling point. It’s really hard to get it right over an extended period of time.”
The long-term strategies of international brands is hard to decipher – they are often tight lipped on their plans. But many big names start by taking a London flagship store in a high footfall area, such as Regent Street, and supporting that with online trading and perhaps a small network of stores in key cities across the UK. Rindone says: “You will see some select presence in bigger cities outside London. But it might take a while to see how London works before doing that. They don’t want to overstretch themselves.”
Victoria’s Secret’s recent announcement of new stores supports this, but Rindone says this stage can be challenging. “The challenge is how you increase your footprint,” she says. “How fast do you do it, and where do you do it?”
Any form of international expansion is never easy, and the UK is no exception. The prevalence of online shopping, however, makes it a bit easier, giving brands more choice in how they enter the market. “There’s more flexibility nowadays in expansion strategies and you don’t necessarily need stores,” Cavill says.
An increasing number of international names are getting it right. Rindone says this is likely to be down to a growing level of professionalism and knowledge among retailers
US retailer Banana republic (above) opened its first shop in the UK in 2008 and has eight stores around the country
13winter 2013
right. A rapidly transformed retail environment has prompted change to ensure they remain keyed into consumer desires.
The introduction of new brands, own-brand development, authority in particular categories, engaging in-store environ-ments and the embrace of multichannel opportunities have been motors of department stores’ ongoing success. They may be old-established, but department stores have been among the most modern-minded of retailers.
The brand mix is a key appeal. Ashley Blake, director of retail portfolio management for Land Securities, notes the balance of own label and big-name global brands is funda-mental. “Department stores bring in brands we might not otherwise get,” he says.
That may mean stocking particular brands and so poten-tially sometimes acting as a bridgehead for labels that are testing the waters before opening stores themselves, or wowing consumers with own brands whose qualities have established similar kudos.
“You need both,” he maintains. “It’s hard to go completely own brand – it would be like a supermarket without Heinz Ketchup.” But he acknowledges the power of private label, which has been deployed by department stores across the board.
Debenhams is repositioning its own brands as well as collaborating with designers such as Henry Holland.
Similarly, House of Fraser has developed its own house brands, which last year accounted for 14% of sales and deliv-ered gross profi t growth of 5%. John Lewis has also devel-oped ranges with designers such as Alice Temperley, which have been extended into new categories.
Own brand or global brand, their exclusive availability in department stores means that from the shopper’s point of view there is only one place to purchase, so bolstering the appeal of anchor status for retailer and property owner alike. Exclusive brands provide diff erentiation from online rivals and a reason for consumers to visit a bricks-and-mortar location.
But as Debenhams property head Rob Hadfi eld empha-sises, department stores tick even more boxes in the shopper’s mind. “It’s the depth of the off er,” he says. “Not only from the clothing point of view but the whole experience, from catering to health and beauty.”
Report
winter 201314
Ever since the earliest department stores such as Le Bon Marché in Paris opened their doors in the mid-19th century, the emporia have occupied a unique place in the retail landscape.
In the intervening period the death of the department store has been proclaimed as new retail formats have emerged, but the appeal of the model has proved enduring and is in rude health more than 150 years later.
Just as Harrods and Selfridges draw hordes of domestic and international shoppers to Knightsbridge and Oxford Street, epitomising the best that London retail has to off er, store groups such as Debenhams, House of Fraser and John Lewis create consumer excitement nationwide as well as in the capital.
They seem to have outlived store types that once looked as if they would replace them – at the moment hands are being wrung internationally about the future of the hypermarket, once seen as the format of the future – and retain a special draw that still makes them anchors of choice for shopping centre owners.
The reason is straightforward, although the challenge of adaptation is a constant. Department stores remain aspira-tional destinations that also off er the convenience of a cornu-copia of choice under a single roof. That works for the retailers and for the landlords that woo them to their schemes. John Lewis development manager Paul Grierson says: “Depart-ment stores deliver a regional fl agship anchor for a scheme or high street. We off er a broad spectrum of products and services that transforms a centre into a premium retail destination.”
Verdict senior analyst Honor Westnedge observes that department stores attract aspirational shoppers who spend time and money in stores that are big draws in their own right. The halo eff ect is browsing, dwell time and spend for their retail neighbours – something any shopping centre owner can benefi t from.
Westnedge says: “Some customers will spend half a day in a department store – meeting for coff ee, getting their hair done, looking at the goods, maybe having lunch.” And on top of that they are likely to take a look at the other shops and leisure providers around them.
But department store groups do not enjoy such appeal as a
The UK’s department store sector is thriving. George MacDonald looks at the reasons for its success
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BIGThe draw
15winter 2013
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The mix of own label and brands in department stores is a key appeal
Debenhams is the market leader in the latter category, accounting for about 2.2% of the market, according to Verdict, and is helped by its beauty loyalty scheme, Beauty Club.
The importance of beauty lines, typically shown at the front of department stores, cannot be underestimated,
according to Westnedge: “Beauty is always on the ground fl oor because it’s a footfall driver and in
many places [department stores] are the only place to get premium beauty. Beauty has a very wide customer base – that’s why you see investment in beauty departments and the marketing of them is very aspirational.”
Blake says: “We acknowledge how important beauty products are – for women they are a regular
key purchase.”Others have seized their own opportunities. John Lewis,
for instance, reported in its last annual results that it had won the “second largest home market share in the UK” after growth of 6.2%. It also gained its highest ever share of computers, TVs, cameras and other electricals goods as its sales in such categories climbed almost 30%. The company’s reputation for value and service were at the heart of its advances. Such advances by department stores have been the result not just of traditional strengths but of bold multi-
channel initiatives.All the big department store groups have invested
heavily in multichannel. Whether it is Debenhams’ Endless Aisle, providing a single view of stock and enabling better fulfi lment of customer orders, or House of Fraser innovations such as buy-and-collect stores deploying digital technology
and enhanced delivery options, or John Lewis’ £40m invest-ment in a new online platform, the ante has been upped.
The results are clear in all the retailers’ ecommerce perfor-mance. In its latest update in September, Debenhams posted a 46.2% increase in online sales in the 52 weeks to August 31. House of Fraser, in its May full-year update, reported a 53% uplift in online sales to account for almost 11% of total revenues. And John Lewis’ latest annual results showed Johnlewis.com gross sales were ahead by 41% to £959m – about 25% of trade.
Such developments are great news for retailers – and property owners. Debenhams’ Hadfi eld says: “Where we open a store our multichannel sales increase – they act as a beacon.”
Land Securities’ Blake maintains: “It’s given department stores a bigger reach. They once had to worry about the catch-ment. Now they can reach back [to consumers] and get sales between [customer shopping] trips. The net is good for them and the landlord can help with free wi-fi plus application through their websites and marketing initiatives.”
Westnedge thinks department stores have been astute to ride the multichannel wave. “A lot of product is branded so they need to be comparable to or ahead of the sector special-ists – multichannel plays into their convenience off er.”
Services such as click-and-collect allow department stores, like other retailers, to sell from a bigger range than can sometimes be stocked in store, as well as to better appeal to younger consumers being used to – and sometimes preferring to – shop digitally.
Westnedge says: “Now they’re appealing to 16-to-24-year-olds. That’s because of better brands and multichannel – that age group likes to shop by mobile, tablet etc.”
Debenhams is the market leader in the latter category, accounting for about 2.2% of the market, according to Verdict, and is helped by its beauty loyalty scheme, Beauty Club.
The importance of beauty lines, typically shown at the front of department stores, cannot be underestimated,
according to Westnedge: “Beauty is always on the ground fl oor because it’s a footfall driver and in
beauty products are – for women they are a regular key purchase.”
Others have seized their own opportunities. John Lewis, for instance, reported in its last annual results that it had won the “second largest home market share in the UK” after growth of 6.2%. It also gained its highest ever share of computers, TVs, cameras and other electricals goods as its sales in such categories climbed almost 30%. The company’s reputation for value and service were at the heart of its advances. Such advances by department stores have been the result not just of traditional strengths but of bold multi-
channel initiatives.All the big department store groups have invested
heavily in multichannel. Whether it is Debenhams’ Endless Aisle, providing a single view of stock and enabling better fulfi lment of customer orders, or House of Fraser innovations such as buy-and-collect stores deploying digital technology
We offer a broad spectrum of products and services that transforms a centre into a premium retail destination Paul Grierson, John Lewis
winter 201316
From a retailer perspective, the growth of services such as click-and-collect means there is an ever-greater premium placed on parking facilities in shopping centres. Hadfi eld says: “From the property side, free car-parking would be nice from the store and multichannel point of view. Where there’s free parking, or parking promotions, retailers benefi t.”
Blake maintains free parking is diffi cult. While at Land Securities’ centres, such as White Rose, it may be provided, it is more diffi cult in town in locations such as Cardiff ’s St David’s or Bristol. “The city centres need to be charged – if we went free we’d be rammed with commuters and not shoppers,” he explains.
However, Land Securities is willing to run parking promo-tions, where possible, and to help with reconfi guration of space to facilitate click-and-collect. It is also considering initia-tives such as delivery of shopping to customers’ cars.
The growth of multichannel is, of course, aff ecting depart-ment store groups’ space requirements. They are increasingly modifying their formats to take advantage of new opportunity as shopping habits and technological innovation open doors.
Hadfi eld says Debenhams is willing to fl ex space require-ments at the bottom as well as the top, where appropriate, of its traditional range – though he is quick to point out that “there’s a minimum base to provide a certain off er, below which it’s not a department store.”
John Lewis has been adapting its requirements. The retailer has successfully opened ‘at Home’ stores focused on its home range and, as in Exeter, a smaller format that leverages the multichannel opportunity to sell a bigger range than can be accommodated in the physical shop.
Westnedge expects full-line department store openings to “remain quite subdued”. She says: “There are fewer opportuni-ties because anchors are dependent on new development.”
That has been in relatively short supply during the recession and downturn. “With the rise of multichannel there’s less need for more and more stores. They may look for smaller format stores because they don’t need to off er the full range physically,” she concludes.
Hadfi eld says: “It’s about the right location in the market,
whether high street, shopping centre or park. The fundamen-tals don’t change – it’s about accessibility. We’ll look where we don’t have representation.” John Lewis’ Grierson agrees that it’s about ensuring the basics are right: “When reviewing a location John Lewis looks for prominence and visibility of a site. The access needs to be straightforward for customers and servicing, importantly with a quality environment and a compelling tenant mix.”
From the property owner’s point of view, department stores remain at the top of the list of desirable tenants but their interests are also shifting. Blake notes: “The department store is still important but on its own is not enough – you need the Topshops, the Zaras, 20 or 30 cracking restaurants. It’s not a matter of putting a department store at each end [of a mall].”
Hadfi eld agrees a suitable tenant mix is in department stores’ interests: “In an ideal world we are sitting alongside others, comparable mid-market fashion retailers and critical mass. Shopping centres are becoming more destination-oriented. I see that continuing.”
He says the success of department stores in property terms “comes down to property owners understanding what consumers want” and maintains that Debenhams off ers “a compelling proposition which increases dwell time and the amount consumers spend”.
Westnedge says department stores look well placed to continue to thrive as long as they meet shopper needs. “We still see them as the main anchors because they’re trusted brand names,” she maintains.
It’s interesting that Tesco’s new headline-grabbing Watford store has more in common with the department store than a traditional hypermarket. It incorporates eateries, distinct areas and an environment overtly designed to inspire.
Blake concludes: “Many landlords are like department store operators, carefully curating brands. We can learn a lot from them.”
Department stores look likely to continue to inspire, enter-tain and seduce shoppers under one roof – and the interests of retailer and property owner should continue to deliver benefi ts for both even as multichannel shopping grows apace. ●
From a retailer perspective, the growth of services such as click-and-collect means there is an ever-greater premium placed on parking facilities in shopping centres. Hadfi eld says: “From the property side, free car-parking would be nice from the store and multichannel point of view. Where there’s
Blake maintains free parking is diffi cult. While at Land Securities’ centres, such as White Rose, it may be provided, it is more diffi cult in town in locations such as Cardiff ’s St David’s or Bristol. “The city centres need to be charged – if we went free we’d be rammed with commuters and not
However, Land Securities is willing to run parking promo-tions, where possible, and to help with reconfi guration of space to facilitate click-and-collect. It is also considering initia-
The growth of multichannel is, of course, aff ecting depart-ment store groups’ space requirements. They are increasingly modifying their formats to take advantage of new opportunity as shopping habits and technological innovation open doors.
Hadfi eld says Debenhams is willing to fl ex space require-ments at the bottom as well as the top, where appropriate, of its traditional range – though he is quick to point out that “there’s a minimum base to provide a certain off er, below
John Lewis has been adapting its requirements. The retailer has successfully opened ‘at Home’ stores focused on its home range and, as in Exeter, a smaller format that leverages the multichannel opportunity to sell a bigger range than can
Westnedge expects full-line department store openings to “remain quite subdued”. She says: “There are fewer opportuni-ties because anchors are dependent on new development.”
That has been in relatively short supply during the recession and downturn. “With the rise of multichannel there’s less need for more and more stores. They may look for smaller format stores because they don’t need to off er
Hadfi eld says: “It’s about the right location in the market,
whether high street, shopping centre or park. The fundamen-tals don’t change – it’s about accessibility. We’ll look where we don’t have representation.” John Lewis’ Grierson agrees that it’s about ensuring the basics are right: “When reviewing a location John Lewis looks for prominence and visibility of a site. The access needs to be straightforward for customers and servicing, importantly with a quality environment and a compelling tenant mix.”
From the property owner’s point of view, department stores remain at the top of the list of desirable tenants but their interests are also shifting. Blake notes: “The department store is still important but on its own is not enough – you need the Topshops, the Zaras, 20 or 30 cracking restaurants. It’s not a matter of putting a department store at each end [of a mall].”
Hadfi eld agrees a suitable tenant mix is in department stores’ interests: “In an ideal world we are sitting alongside others, comparable mid-market fashion retailers and critical mass. Shopping centres are becoming more destination-oriented. I see that continuing.”
He says the success of department stores in property terms “comes down to property owners understanding what consumers want” and maintains that Debenhams off ers “a compelling proposition which increases dwell time and the amount consumers spend”.
Westnedge says department stores look well placed to continue to thrive as long as they meet shopper needs. “We still see them as the main anchors because they’re trusted brand names,” she maintains.
It’s interesting that Tesco’s new headline-grabbing Watford store has more in common with the department store than a traditional hypermarket. It incorporates eateries, distinct areas and an environment overtly designed to inspire.
Blake concludes: “Many landlords are like department store operators, carefully curating brands. We can learn a lot from them.”
Department stores look likely to continue to inspire, enter-tain and seduce shoppers under one roof – and the interests of retailer and property owner should continue to deliver benefi ts for both even as multichannel shopping grows apace.
Department stores’ wide offer can increase dwell time and the amount shoppers spend
winter 2013 17
Retail parks have enjoyed strong growth since their inception, as British shoppers fell in love with the free parking, the wide choice in retail brands and the array of products on offer in these out-of-town shopping havens.
However, the digital age has challenged these long-held views and retail parks are revamping their offer to stay relevant and compete. The gap between excellent retail parks with a mixture of attractive retail brands, varied categories and leisure, and poor destinations is widening.
BRC data shows that out-of-town footfall rose nearly 1% in July, while earlier this year the Local Data Company said retail parks have the fewest vacancies of all shopping destina-tions and some parks have no vacancies at all.
A new generation of retail parks is emerging. Land Securi-ties’ portfolio of 17 retail parks comprise a number of UK retail’s most attractive locations. For example, Lakeside
Retail Park in West Thurrock, Essex attracts shoppers from the Southeast and London, offering consumers a variety of retail including homewares, electricals and cafes.
Team Valley Retail Park in Gateshead offers an attractive proposition to the 1.9 million shoppers in its Northeast catchment. Meanwhile, the Westwood Cross Retail Park in Thanet, Kent epitomises the development that is happening in retail parks. Retailers include Marks & Spencer and Debenhams’ first full-line department store on a retail park, as well as a 70,000 sq ft Primark – retail parks being a first out-of-town venture for the latter. There is also a Vue multiplex cinema and a number of eateries.
It is something of a new dawn for retail parks. Historically, from a landlord perspective, they were low-risk shopping destinations with low costs of capital. But with a demand for higher returns, they are undergoing significant development. The potential in the prime destinations is significant.
The changing face of
Report
retail parksRetail parks have never been lauded for their glamour, but they continue to attract the hordes. Alex Lawson considers how a new generation of retail parks is being developed and reports on exclusive shopper research
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Meanwhile, a number of brands have stated their ambition to expand their presence out of town. Morrisons-owned baby specialist Kiddicare made a splash into big-box retail last year with a new format that incorporated pushchair testing tracks and community rooms. Meanwhile, Pets at Home also continues to open new stores on retail parks. At the discount end of the market, the value players including B&M and Poundland are eyeing expansion on retail parks and have gained funding to support this.
As well as prime sites, Land Securities has also worked with some innovative brands revamping their offers on its parks. In 2010, Dixons combined its Currys and PC World format, which appears on its Goodmayes Retail Park in greater London and Ravenside Retail Park in Chesterfield. Ravenside is also anchored by Debenhams, which opened
its first full-line department store on a retail park in September 2012. Meanwhile, Poole Retail Park in Dorset is host to the first John Lewis at Home store.
Land Securities portfolio director Hermione Mackrill says: “Retailers not traditionally found on retail parks have come in as they recognise economies of scale, accessibility and free parking are big pluses for shoppers. This type of store format is especially relevant with click-and-collect facilities concentrated on retail parks, again because they are so convenient for customers.”
Poundland acquisitions surveyor Sean Riley says the retailer is using parks to build on its 450-store high street business. “Parks give us an opportunity to explore new markets where customers may have different shopping missions,” he says. “We also benefit from a bigger average basket spend on parks, because of the easy access and proximity to free parking.”
David Short, country managing director of Brantano owner Macintosh Fashion, adds that free parking and the ability to broaden its range through large stores is an attractive proposition. “The tenant line-ups on retail parks are usually family-friendly with additional food and leisure use which, again, attracts families and encourages dwell time,” he adds.
We benefit from a bigger average basket spend on parks, because of the easy access and proximity to free parking Sean Riley, Poundland
top retail parks
Retail World Team Valley, Gateshead three miles
south of Newcastle-upon-tyne, this 380,000 sq ft regional
retail park comprises 27 units. principal occupiers are
tk Maxx, Next, Boots, Mothercare, arcadia, asda living,
Currys/pC World.
Lakeside Retail Park, Thurrock a 380,000 sq ft retail
park is adjacent to lakeside shopping Centre. it com-
prises 21 units with major tenants being Next Home,
toys r Us and Currys.
Westwood Cross, Thanet this hybrid retail park/shop-
ping centre development, which opened in June 2005,
sits in the heart of thanet's three core towns – Margate,
ramsgate and Broadstairs. it has 49 retail and leisure
units including a multiplex cinema, a hotel and restau-
rants and is anchored by Next, Debenhams, tk Maxx
and Marks & spencer. it is also home to the first
out-of-town primark – a 70,000 sq ft unit that opened
in autumn 2012.
Greyhound Retail Park, Chester it combines three
blocks of retail and leisure/restaurant accommoda-
tion and a separate industrial estate known as Chaser
Court. the retail units benefit from an open a1 non-food
planning consent and the park forms part of the wider
sealand road retail warehousing offer for Chester.
Kingsway West Retail Park, Dundee a major regional
shopping centre in scotland, the park has links to aber-
deen and Glasgow. the 300,000 sq ft park comprises 19
units including Dunelm Mill, toys r Us and Homebase.
Poole Retail Park, Dorset this 208,011 sq ft retail park
is undergoing a major upgrade and has been identified
as one of the first locations for John lewis' new out-of-
town retail units. tenants also include Mothercare and
Next Home.
Ravenside Retail Park, Chesterfield this prime park
south of the city centre comprises a DiY unit, terrace of
five units, a small standalone unit and a restaurant. the
174,000 sq ft site is home to principal occupiers Currys,
Next, pets at Home and Debenhams. it was Debenhams’
first full-line, out-of-town venture for a retail park, and
opened in september 2012.
winter 2013 19
Customer endorsementIf retailers up their game and modernise their approach with their presence on retail parks, customers’ expectations also change. So what do they actually think about the UK’s retail park offer? Exclusive research for A1 unearths some interesting results based on the views of UK shoppers.
There are several reasons why shoppers opt for the retail park experience – 69% of shoppers cite large, free car parks as a key draw and 50% are enticed by a strong selection of big stores with expansive ranges. A convenient location appeals to 40% of shoppers, 28% cited less traffic than nearby urban centres and 33% said the fact parks are less crowded than the high street is attractive.
Although the growth of etail may have been to the detriment of retail parks, it also brings opportunities, as 13% of respondents said the convenience of picking up online orders at parks was attractive. Retailers then have the opportunity to sell other products to shoppers collecting orders in store. A greater number of retailers offering click-and-collect at local parks would be an improvement to 20% of shoppers. Riley says: “Retail parks are the obvious beneficiary of the click-and-collect principle owing to the proximity of car parking.”
The majority of shoppers enjoy frequent trips to retail parks – 18% visit once a week while 32% visit two to three times a month. Meanwhile, 36% of respondents visit a park once every two to three months and 14% visit less frequently than that.
The duration of shoppers’ visits to retail parks reflects their various missions. Only 6% of customers spend just five minutes on a park, suggesting there is a minority of shoppers who will visit to purchase a single item and leave. The majority (43%) spend about half an hour on retail parks, which suggests they make either one considered purchase on a big-ticket electricals item for example, or nip to several stores for a number of products.
The study also shows that the mix of retailers shoppers visit is more geared towards fashion where DIY once dominated trips. The research reveals 68% of shoppers visit out-of-town fashion retailers and 44% also seek out footwear.
Manchester Business School senior lecturer John Pal says the types of retailers on out-of-town parks is diversi-fying. “In the early days of the retail park we would not have expected to see shoe shops, traditionally a mainstay of town centres, but now Clarks, Deichmann, Brantano and Schuh all have a presence on them. One can even find Matalan trading cheek-by-jowl with Next,” he says. “Next, once a predominantly town centre retailer, has been increasing its presence on retail parks, as has John Lewis at Home – they are simply responding to customer demand.”
Short adds there are a number of retailers that comple-ment Brantano’s footwear offer. “We trade well alongside many retailers but have a preference for those with regular footfall and those who also appeal to the family audience. These include Boots, Next, Pets at Home, Hobbycraft and Toys R Us,” he says.
And shoppers are enjoying the developments. Nearly 40% of those surveyed believe the selection of retailers has improved in recent years. A number of retailers including Matalan, Marks & Spencer and Debenhams are specifi-cally cited as brands that shoppers want to see.
Homewares and home improvement remain a key draw to retail parks, as 49% of those surveyed visit homewares stores and 45% visit DIY specialists. Department stores, too, are popular with 49% heading for them. Dixons will be buoyed by the 46% of shoppers who visit its stores after it became the largest out-of-town electricals retailer last year when rival Comet fell into administration.
Toys, health and beauty and sportswear stores tempt about 30% of respondents to retail parks. US giant Toys R Us proves a pull for parents to drive to and allows children to roam its vast stores. Providing ample parking for child-rens’ specialists is vital as competition in the lucrative sector heats up. Mothercare is rolling out its out-of-town format, first trialled at its Edmonton store, while Kiddicare offers buggy fittings in the car park making space by its stores key.
a wider range of retailers such as baby specialist Mothercare and homewares retailer Next Home are expanding their presence out of town
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Supermarkets are an out-of-town attraction for 31% of shoppers. Although the major grocers regularly fi nd stand-alone sites for large stores, food retailers remain anchor tenants at retail parks and provide strong, regular footfall as customers conduct their weekly shop.
33% of shoppers visit retail parks for their leisure off er and, with the impact of online, off ering an experience alongside the products the customer needs will be vital in winning shoppers. Tesco has introduced a raft of new leisure brands – including restaurant Giraff e and coff ee shop Harris + Hoole – into its Watford Extra store and this move is likely to be a key trend for large grocers.
A new age of retail parksRetail parks are reinventing themselves because of the eff ect of the digital age and the impact of rising fuel prices on their location.
Leisure options that cannot be replicated online – including cinemas, restaurants and leisure centres – are becoming increasingly common and there remains an opportunity to improve on or build new leisure facilities. 24% of shoppers said there were no leisure options on the retail parks they visit while 36% would use them if they were present. Moreover, 26% said a greater selection of leisure facilities would improve their local park.
“Retailing alone these days at a retail park just isn’t enough – a diverse off er for a complete day out is the way forward,” says Andrew Patterson, founder of store design specialist Mynt, who believes service levels on retail parks need to be improved. “While we have the usual range of retailers, we now also have gyms, restaurants, cinemas and even hotels.
“We need to take note of the retail direction in the Middle East, which truly transforms shopping into a leisure experience,” Patterson says. “I’m not saying we should necessarily open a snow-covered mountain or introduce a walkthrough aquarium. But surely as the original global leaders in retail we should be able to up our game and give consumers a real reason to visit the full-price retail parks.”
Improving the existing retail proposition remains a key focus for many parks. The majority of those surveyed (46%) said a wider range of retailers would be the main improve-ment made to their local park. A signifi cant number of shoppers (36%) also said improved public transport links would improve their experience at their local park while 9% desired more childcare facilities.
The future looks bright for UK retail parks as destinations adapt to new shopping habits. Mackrill says: “Retail parks need to capitalise on their convenient accessible locations so customers pick up or return goods via retail park stores. This brings shoppers back into the retail environment and often means new spending in store occurs.”
Ultimately, retail parks’ sharp mix of attractive brands, enjoyable experience and convenient locations look likely to continue to prove a winning formula. ●
THE CUSTOMER VIEW
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DIY 45%
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winter 2013 21
Retail is nothing if not routed in detail and the fundamentals that dictate retail success do not mean that new projects must be cut from the same cloth. Two of Land Securities’ key retail developments are at opposite ends of the country and
also in many ways opposite ends of the retail spectrum.Glasgow’s retail heritage has been forged over a decade of
extraordinary sales growth and the Land Securities’ projects involve the past, present and future. The hugely successful Buchanan Galleries reshaped retail in the city and earlier this year the offer was further enhanced by a new retail block on Buchanan Street. This has brought with it more international names, among them fast-fashion powerhouse Forever 21.
The retail offer will be transformed by the ongoing project to add to Buchanan Galleries, which includes an anchor Marks & Spencer store, and its direct connection to Glasgow’s bus and train hubs. Once finished in 2017, Glasgow’s retail and cultural heritage will be better linked, while travelling into the city will also be easier, faster and more easily navigable. Proposed improvements to the food and beverage offer will also make the area a night-time destination in a city that has become synonymous with its thriving after-hours scene.
Head to the South, and the proposed improvements to Oxford’s Westgate scheme have sat among several owners for a number of years. Spearheaded by a partnership between Land Securities and The Crown Estate, fresh momentum is behind a planning application to extend and transform the retail offer. In addition, there are plans to deliver two new public spaces and to create a vibrant food and beverage hub, anchored by a boutique five-screen cinema.
Westgate’s long gestation before the current owners took over in 2010 has been a source of frustration for Oxford but in some ways may prove a blessing in disguise. The role of shopping centres as retail and leisure destinations has trans-formed over recent years, as has the integration of digital and physical retail, which is reflected in the plans for Westgate.
About a fifth of the space at Westgate will be dedicated to food and beverage. The scheme will also include a high-end cinema offer and even its anchor John Lewis has been able to compress its format, in part through its own efficiencies as well as through the use of online in its physical stores.
What has also become clear has been the importance of reinvigorating retail in urban settings. The biggest opening of this year was the Trinity Leeds project in the centre of Leeds – which was created as a new retail heart of the city seamlessly interlinked with the main thoroughfares – and both Glasgow and Oxford plan to reinvigorate the retail offer in the same way.
In Glasgow, the retail demand has enabled development which, over time, has evolved to encompass the latest retail formats and concepts and to meet changing consumer needs. In Oxford, the move may be a little more revolutionary, bringing several important new components to the retail and leisure offer in the city in one go. Yet even here that ‘revolution’ is set in the closely held parameters of a city enthralled with its ‘dreaming spires’ and determined to deliver a more contempo-rary centre sympathetic to its historical legacy.
With both schemes due to open in 2017, there is plenty of time for retail to run through more transformations and, as such, the design of both encompasses the need to remain flexible and forward thinking, matching both cities’ heritage with the ever-changing face of contemporary retail. l
Development
Take one affluent yet underperforming market in the South and one soaring retail city in the North and you have the locations for Land Securities’
two proposed developments. Mark Faithfull reports
orthSoUthand
more than a third come from outside the UK. Tourists inject £150m of retail spend annually, from more than 1 million staying visits and 8 million day visits. The opportu-nity for development sounds a very interesting one.
Shopping in Oxford is focused around two or three main streets with the city’s largest shopping centre, Westgate, on the southwest fringe of the shopping core. Westgate totals 330,000 sq ft and is anchored by Primark, which sits alongside other retailers such as Sainsbury’s, Oasis and New Look.
In 2010, Land Securities bought a 50% stake in Westgate and the adjacent development site for £28m, and formed a partnership with the centre’s owner, The Crown Estate. The centre has passed through a number of ownerships and plans to develop the scheme have been on the board since 2001, when initial proposals were called in by the Secretary of State. Clearly Oxford has been waiting a long time for this promised major revamp.
winter 201322
Think Oxford and its famous univer-sity heritage, its dreaming spires and perhaps even a curmudgeonly but cultivated, classical music-loving detective might come to mind. Already an inspiring location
bursting with scholars, students and tourists, the city has, however, not always delivered to the same degree when it comes to its retail offer.
For all the heritage and elegant buildings that give the city its curb appeal and help make it a tourist magnet, the current stock of retail buildings bring with them constraints in terms of access, size and suitability for modern retail requirements.
As an affluent, southeast England city – Oxford boasts a catchment of 429,170 people with an annual spend of £4.2bn – Oxford simply does not have enough retail space for the demand. Oxford is also just an hour from London and has a student population of more than 30,000, of which o
xFo
rd in
Spir
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Oxford’s retail offer is to be transformed with the new development plans and repositioning of its Westgate shopping centre. Mark Faithfull looks at what the famous university city can expect
Development
23winter 2013
Plans to develop Oxford include retail expansion and an enhanced food, beverage and leisure offer
Westgate, OxfOrd
Type extension and
refurbishment
Developed by Westgate Oxford
alliance, partnership by Land
securities, the Crown estate
Completion expected
autumn 2017
Size Current 330,000 sq ft; after
extension additional 520,000 sq ft
Main features More than 100
major retail stores, anchors, new
restaurants, five-screen cinema,
small residential component,
new public spaces
Anchor John Lewis
“We saw Oxford as a great development opportunity and we were very keen to do the deal,” recalls Land Securities development director Bert Martin. “The previous owner had already received planning permission but at the time we were in the teeth of the recession. We took the time to look afresh and to consider what was viable, while being sensitive to the setting as well.”
Indeed the current ownership – Westgate Oxford Alliance Limited Partnership – builds on the success of a number of Land Securities destinations across heritage cities such as Canterbury and Exeter, where the close relationship between The Crown Estate and Land Securi-ties was first formed at Princesshay.
Having revisited the initial plans for Oxford, this summer the joint-venture partners unveiled its own updated plans for redeveloping Westgate, proposing an extension to the existing shopping centre and adjacent land. Plans include a greater total retail expansion, a redefined John Lewis and a significantly enhanced food, beverage and leisure offer.
Plans show 100 new stores, including a 140,000 sq ft John Lewis department store, cafes and rooftop restaurants, a five-screen cinema, a 1,000-space car park,
covered streets and two new public squares. A small plot of new homes adjacent to Castle Mill Stream is also being proposed.
A more detailed planning application is to be submitted this autumn, with Land Securities hopeful of ascent by the City Council after Christmas. This consent would allow enabling works to begin in 2014 and building work is due to start the year after for an opening in autumn 2017. The new centre will be largely open air, integrated with the central Oxford streetscape. A two-storey basement car park with 1,000 spaces will replace the existing multi-storey Westgate car park, which will be demolished.
John Lewis will be built as the anchor for the southern edge of the new Westgate scheme.
Martin says: “It [John Lewis] will be one of its compact full-line department stores and reflects the way that it has become more efficient at compressing their back of house and storage to create a smaller total footprint.”
He adds: “That and moving the car park underground have enabled us to create a larger footprint for the rest of the retail than had been envisaged in the original plans. The cinema will be on the first and second floors and will be a boutique-style operation, with plans for a roof terrace offering views of Oxford.” g
Development
winter 201324
Martin says responses to the initial consultation have been broadly very positive. He notes that “this being Oxford, as you can imagine vociferous, well-informed and articulate” feedback from stakeholder groups has helped to place emphasis on how the plans are taken forward and how the project remains faithful to the spirit of the city. “One of the issues has been about height, because the City Council understandably wants to ensure that views of the dreaming spires are unhindered,” Martin reflects. “It’s worth stressing that this is not an internal, capsule mall being dropped into the city but a scheme that is outward facing and very much integrated with its surroundings. But that said we appreciate that we have to ensure the architecture and layout is sympathetic to the location.”
The development is not being carried out in solace but is set to act as a catalyst for major changes to transport in the city, with plans to close Norfolk Street and reroute buses through Thames Street and Abbey Place. Martin notes that about half of visitors to Oxford arrive by bus either on regular routes or through the park and ride scheme. He says the partnership wants to dovetail with this and to ensure new bus stops work with the various entrances to the new scheme.
Living in the cityOxford City Council is also working on a masterplan for the Oxpens area, a new city centre neighbourhood close to the Westgate centre. Initial proposals include 125 houses and 172 apartments, a 150-room hotel and new student accommodation. If the masterplan is approved, the council will have to select a developer for the project and will then sell the land. Work is expected to begin in 2015.
In addition, as part of Network Rail’s £300m plan to revamp the rail infrastructure in the city, a new station will have been built on the site of the existing one by 2019. Network Rail wants to add a third platform to the west of the station and replace the Botley Road bridge to cater for the extra track, also widening the road space below. Only an hour’s commute to London and a new retail develop-ment that will draw from the wide catchment, improved rail plans only add to the appeal of Oxford.
Securing John Lewis was critical to the project and the store, which will create 500 jobs and feature a cafe, online order collection points and computer terminals in the branch, which will allow shoppers to browse the wider John Lewis online offer and order for home delivery or next-day collection at the shop.
John Lewis managing director Andy Street said on confirmation of the deal: “Oxford has long been a sought-after location for us and we’re delighted to be able to expand our reach to customers across the region for the first time. It will provide them with more convenient access to our inspiring products and great service. We’re looking forward to becoming part of the local community.”
Martin feels that the re-engineering of the scheme to optimise the John Lewis store is also reflected in the broader approach. He notes that the changes in plans for
the revitalised Westgate also run in parallel with the way retailers have evolved their requirements. Of course, designing a scheme of this nature, with delivery antici-pated in late 2017, provides challenges to ensure that as innovations in retail alter, the design can change in parallel. The research, which has underpinned the feasibility study undertaken by the Partnership, revealed a genuine demand from retailers for a substantial amount of modern retail space in the city. In fact Oxford has remained top of the list of requirements for UK retailers in recent years, let alone international brands.
“Retailers’ needs are changing all the time. For example, if you look at our proposals now, 15% of the floorspace will be A3 and we would like to get that up to nearer 20%,” Martin explains. “The retail landscape has changed a great deal in the past few years and retailers have been grappling with what that means for their store estates. It’s not necessarily just about bigger stores – it’s about flexibility and the right configuration. We’ll be working hard to ensure that this project provides that flexibility, so that it works as their needs continue to evolve over the next four years.”
So what happens next? Following the first public consultation on the Alliance’s scheme, a second consulta-tion will be held later in the year on more detailed designs, which will also include two new public spaces. Martin points out that although thoughts of Oxford naturally turn to the famous university quadrangles, many of these are in fact private and not easily accessible. As a result the public spaces will provide the city with a much-needed injection of breathing space. The Partnership will start on site in late 2014, with a three-year construction process to deliver the new development.
From this it would also be fair to deduce that Westgate will follow on from the learnings at Trinity Leeds, where Land Securities applied its latest thinking in terms of retail and leisure destinations. The new scheme will boast rooftop restaurants overlooking the city and will also embrace digital technology to combine the best of the physical and virtual for shoppers and retailers.
“What’s very clear is that there are lots of retailers trading out of undersized units in the city, or who can’t get into Oxford at all, identifying a clear development opportunity,” says Martin. “We have not started the major marketing of the centre but have instead been in discussions with particular partners and the feedback so far has been hugely encouraging.”
Oxford, more used to being considered in the elite, has had to battle competition from London, Reading and even premier designer outlet Bicester Village for shoppers’ money and has seen a lot of retail spend “leaking out of the city” to its nearby rivals, says Martin. The new Westgate should change the balance, providing a scheme that is not only sympathetic to the heritage of its host city but also brings new public space, leisure and much more fresh retail to a city. This should become even more appealing to its residents and visitors from across the globe. l
We have to ensure the architecture and layout is sympathetic to the location Bert Martin, Land Securities
transport links in Oxford are being revamped
winter 2013 25
GLaSGowLineGlasgow – home to next year’s Commonwealth Games – is already firmly established as the UK’s best retail location outside London. Its offer was enhanced in March with plans to improve the retail and leisure offer. Mark Faithfull reports
Of all the reinvented and revitalised cities around the UK, Glasgow surely has to represent the most complete of the transformations. Visitors to the Scottish city in the 1980s and 1990s might have been confronted
by remnants of its industrial past and found its gritty urban reputation largely intact. But that is a far cry from the cosmopolitan and cultural atmosphere proffered by the modern-day city.
Glasgow offers access to a huge catchment of 2.9 million, with a comparison goods spend of £2.56bn. It is Scotland’s largest urban economy and is ranked second by
CACI in its UK Retail Ranking (2013) of towns and cities around the country. More than 440,000 people work in the city, 63% of Glasgow’s population is aged under 45 and Glasgow in 2017 is forecast an increase in retail market potential to £2.59bn.
Land Securities has been at the heart of that transformation. In March, chief executive Robert Noel was joined by Scotland’s Deputy First Minister, Nicola Sturgeon, to mark the latest iteration in the city’s ongoing retail evolution as they officially opened Scotland’s newest mixed-use shopping development, including a residential rooftop garden scheme, on Buchanan Street. g
winter 201326
Development
Noel could have been forgiven for a sense of déjà vu, having opened the much-anticipated Trinity Leeds shopping centre just 24 hours earlier.
The 115,000 sq ft Glasgow scheme debuted fully let, successfully attracted national and international brands, including the first stores in Scotland for US fashion powerhouse Forever 21, Vans, Paperchase, Evans Cycles, Fat Face, Skechers, Office, Watches of Switzerland and Gap.
The £70m development sits opposite The Buchanan Partnership’s Buchanan Galleries – a joint venture between Land Securities and Henderson Global Investors. The Buchanan Street development consists of 49 luxury apartments – which are due for completion later this year and are already 80% reserved – as well as nine shops. It is positioned to exploit and expand the high levels of footfall in the area, estimated at 91 million shopper visits a year.
Replacing the former Atlas building, Land Securities development director for retail Nick Davis says the new retail block was created as a modern space for retailers, which was lacking in the city. It has also boosted retail at the north end of the street.
Davis points to the fact that the north end of Buchanan Street, where the new retail is sited, has become a prime pitch. This is because of the introduction of the new national and international brands, which have performed strongly since opening in March.
The next major phase of retail expansion in Glasgow is Buchanan Galleries, which is scheduled for completion in 2017. The extension will add more than 650,000 sq ft of retail space to the centre, and Marks & Spencer has already signed up to anchor the extension with a 150,000 sq ft store.
Seamless cityBuchanan Galleries aims to attract a new raft of national and international brands to Glasgow, as well as 15 new restaurants and a multiplex cinema.
“The extension will bring more important names to Glasgow, a number of which we anticipate to be opening their first UK stores outside of London,” says Davis. “New tenants and a massively improved food and leisure offer will transform the centre. By modernising the existing building it will have the same look and feel as the extension offering customers one seamless destination.”
Buchanan Galleries has John Lewis as its existing anchor and the retailer is also expected to revamp its store in line with the upgrade of the project. The £300m development will have new and improved links into Queen Street Station, which is being modernised by Network Rail, and the bus station with a new 1,700-space, multi-storey car park to boost the already high level of public transport used to visiting Glasgow.
Buchanan Partnership also plans new frontages for the shops in Buchanan Street, Cathedral Street and Killer-mont Street. This will improve the experience for visitors and support the regeneration of the Buchanan Quarter to create a more vibrant city centre, extending its opening
hours and its contribution to the fabric of the city. Davis says: “Our aspiration is to further strengthen Glasgow’s position as a retail destination through the creation of a new and integrated retail and leisure heart within the city centre supported by world-class public transport infrastructure. The development will attract new international brands to Glasgow to complement the existing retail offer and to augment the vitality and vibrancy of the city centre.”
The new extension will almost double the size of the existing shopping complex and the scheme will include £80m of public realm improvements to areas around the complex, achieved through the city council’s successful application for Tax Incremental Financing (TIF) from the Scottish Government. Davis recalls: “Securing M&S is a significant milestone for the development and follows on from obtaining outline planning consent in March 2013. This early commitment to the Buchanan Galleries extension, combined with
glasgow offers access to a huge catchment of 2.9 million
winter 2013 27
the successful scheme at 185-221 Buchanan Street, establishes the top end of Buchanan Street as Glasgow’s prime retail pitch.”
And Noel reflects on the decision to further invest in the city: “Glasgow is the UK’s top shopping destination outside London. Our investment in this development reinforces both our commitment to, and confidence in, Glasgow as a prime retail and leisure location. This confi-dence has been reinforced by our ability to attract top-flight retailers such as Forever 21 and Vans to Scotland for the first time. Land Securities and Henderson Global Inves-tors are committed to Glasgow for the long term and we have aspirations to invest a further £300m in the city over the next few years.”
The Buchanan Quarter is intended to help link the cultural, commercial and travel hubs at the heart of the city. In close proximity Glasgow boasts its Royal Concert Hall (also being significantly upgraded), Buchanan Street – which a travel writer from the Huffington Post felt
buChanan gaLLeries
Type extension and refurbishment
Developed by Land securities
and henderson global investors
Completion expected
autumn 2017
Size 600,000 sq ft – after extension
additional 650,000 sq ft
Main features additional anchor,
new restaurants, 10-screen
cinema, new public spaces,
improved links with city and
public transport
Anchors John Lewis
(current); Marks & spencer
(to be added)
buChanan street
Type new retail and residential
block
Developed by Land securities
Completion retail – March 2013;
residential – end of 2013
Size total 160,000 sq ft (retail
115,000 sq ft)
moved to describe as “the Ramblas of Glasgow” in a recent travel review – and the twin retail developments of Buchanan Galleries and 185-221 Buchanan Street, plus a bus station, Queen Street rail station – used by 19.7 million people annually and undergoing a £70m development – and the upcoming residential Buchanan Gardens. The existing scheme and development of the retail extension helps thread these strands together both for residents and visitors. There are 20 million visitors a year to Buchanan Galleries and 6,600 people per hour pass along Buchanan Street.
“It’s important that we weave these important elements of culture, residential, leisure and shopping together,” says Davis. “With so much concern over the future of high streets in this country it’s heartening to see just how popular and in demand a city centre location such as Glasgow has proved to be.”
One of the first things identified by Land Securities was that there is no compelling city centre restaurant/leisure destination in Glasgow as is now found in the best enclosed shopping centres across the UK. Davis is determined to provide a contemporary offering in the scheme by both improving and substantially increasing what’s on offer.
Trinity Leeds has proved an exemplar of the contempo-rary approach, with a diverse food and beverage offer providing everything from grab and go and cool street food to formal dining and cocktails on the roof terrace. As a result, Land Securities envisages that the Buchanan Galleries extension will provide the very best in dining experiences, as there are more than 15 new quality restau-rants and cafes alongside a state-of-the-art digital 10-screen cinema. “It’s a great opportunity to create a real destination for leisure, which is under-supplied in this area of the city and which will be further in demand once the Royal Concert Hall has been completed,” says Davis. “On completion of the project, we plan to have up to 30% of the Buchanan Galleries as food and beverage, which really goes to emphasise our belief in the opportunity here.”
Such a transformation of the food and leisure provision will certainly bring it in line with the strength of the retail offer in the city. Davis is in no doubts that the success of the stores is driven by the strength of the catchment around Glasgow, which has put the city behind only London on the UK retail map.
“We already have a very strong retail offer and once the full plans for the Buchanan Quarter are realised we will have created one of the UK’s most vibrant city centre locations where residents and visitors can enjoy a range of activities,” says Davis. “What is more, the components that make up the area will enjoy new links, making it even easier for people to enter Glasgow and to travel around seamlessly.”
Combining and inter-weaving those elements is the task ahead and with the residential component the next to be delivered, the future looks exciting for a city that is increasingly finding itself in the limelight and which will raise its profile once again next year during the Commonwealth Games. l
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For something that fits in the palm of a hand, the mobile phone is having a disproportionately large impact on the retail sector. Half of House of Fraser’s traffic to the site originates from mobile devices. Burberry’s entire business strategy is mobile
first. The Starbucks Card Mobile app allows customers to pay via mobile. Retailers are beginning to see just how big an opportunity mobile presents. As Burberry chief executive Angela Ahrendts, who is leaving the luxury fashion retailer next year to join Apple, has stated: “This is how customers live. They wake up with a device in their hands and life begins.”
According to online industry body IMRG, 61.5% of consumers have bought on mobile (in comparison with 38% in January 2012) and 84% often use the internet to research a purchase before buying. Analytics company comScore reports that more than a third of visits to the top 50 ecommerce sites come exclusively from mobile devices. Many retailers still question whether mobile is yet a predominant channel through which to make sales. However, what is becoming more apparent is that it is without doubt a channel that customers use as part of their purchasing journey.
As an indication of its growing popularity, Nadine Sharara, head of ecommerce for Thomas Pink, says 20% of the retailer’s sales now come from mobile – a figure that has doubled in the past 12 months. She expects this percentage to continue to grow. “I think that we will see a continued shift of traffic from desktop to tablet and as a result a further contribution to sales,” says Sharara. And as the channel grows in importance, retailers will begin to understand much more about the customer journey and behaviour. She adds: “The challenge will be how to cater for the channel without relying on responsive design alone. By improving our mobile proposition we stand to gain increases in conversion and revenue alongside opening up new marketplaces and traffic acquisition opportunities.”
Asda’s experience of mobile is a good example of the impact this channel is having on the way people shop. It says three quarter of its ‘Asda Mums’ – the grocer describes its core customer as ‘mums’ – own smartphones and a quarter of its grocery home shopping sales are made on mobile. The Asda app, which has had more than 2 million downloads, gives customers the ability to create a shopping list that they can add to by typing, dictating or scanning products. It also has the ability to scan a till receipt to run an Asda Price Guarantee check. Asda also plans to launch a new recipe section to the app, which will allow customers to scan a recipe and automat-ically add the ingredients to their shopping list.
on mobileMaking it
Technology
Mobile has quickly become a major channel for retailers and looks set to continue to be a huge growth opportunity. Keely Stocker considers the impact of this rapidly evolving retail channel both online and in store
A survey by IMRG and eDigitalResearch showed that 10.9% of consumers have used a smartphone on average once a week to browse for an item while out shopping. Asda believes its app gives customers a reason to use their mobile in store.
Making it personalSo what impact does mobile have on bricks-and-mortar stores? Many retailers previously assumed that mobile shopping would cannibalise in-store sales, but research by Google in May this year has found that frequent mobile shoppers spend 25% more in store than people who only occasionally use a mobile phone.
Alex Meisl, chairman of mobile marketing company Sponge, thinks that the challenge for retailers is to make their mobile offer relevant – in both context and location. He explains: “The content an individual sees when they go onto your mobile site has to be relevant to them and where they are at that time. If a customer is already in your store they do not want to go onto your mobile site and the first thing they see is a store locator.”
Meisl highlights John Lewis as a retailer that has embraced mobile and incorporated it into its entire strategy. Sean O’Connor, head of online delivery and customer experience at John Lewis, says: “Mobile has grown massively for us over the past few years. It’s a part of our customers’ everyday lives and it
M&S in Amsterdam enables customers to
place orders through in-store points, iPads
or on their own phone using the shop’s wi-fi
29winter 2013
has to be part of our response to the changing retail landscape.” John Lewis has launched wi-fi in stores, has an app
specifically designed to give customers access to ratings and reviews and has used QR codes in window displays to drive sales. Meisl concludes that it is all about encouraging the customer to use whichever channel works best for them wherever they are.
Sharara says while Thomas Pink does not yet have mobile in store, it is something that is in the pipeline. She says it has deliberately taken its time because it has been defining the best use of mobile in store. “We already have in-store ordering available via our tills and it’s a big project to implement mobile point of sale,” she says, adding that it is looking at rolling out wi-fi in store for Q4. “Mobile is absolutely a key part of the multichannel strategy as the primary enabler to help bridge the gap between store and web. However, it’s still early days to clearly define the true role of mobile in joining the channel dots but we see it in mobile web, mobile POS, in store apps, consumer apps, employee apps and, of course, mobile wallet or payments.”
Footwear retailer Schuh is also rolling out free wi-fi in all of its UK stores but research has found that the biggest need for its customers is the opportunity to check in-store stock levels on their mobile while in store. It is planning to launch this in the first half of 2014.
Schuh head of ecommerce Sean McKee says they are also looking at the use of QR codes in store. “We’re definitely inves-tigating using QR codes on products to allow the customer to find out further information. QR codes must make sense to the job and the message to the customer must be clear. The current level of interaction is low but I can see the act of scanning a QR code for more information or to get enhanced content working. Customers using their own technology to get more information from the retailer is definitely the future.”
Retailers are all in different stages of their mobile strategy and many are trying a range of initiatives. But one that has been able to take the first steps into mobile payments is coffee chain Starbucks. The Starbucks app allows users to check their balance, top-up their card, view transactions and track their Starbucks Rewards. It was also announced in March this year that Marks & Spencer will be trialling mobile payment app Paddle in coffee shops in store. The app allows customers to scan a code with a phone’s camera to pay.
According to market analysis business Gartner, mobile payments represent a £150bn market, but only 21% of these transactions are payments for products rather than balance transfers. However, as more retailers launch in-store mobile initiatives and consumers become used to using their mobile in shops, this figure will continue to rise. The challenge for retailers is sizeable – not least the cost of implementing these systems and incorporating them into their multichannel strategy.
Whichever direction retailers choose to take, what is clear is that the shift in consumer behaviour continues apace. Whether using the device to browse, buy or simply find out information while on the move, mobile is a unique way of reaching customers wherever they are, whenever they are. For retailers, the pressure is mounting to have a mobile strategy that allows them to do the same. l
going Mobile
June 2011 Starbucks rolls out mobile payment app
January 2012 Clarks rolls out QR codes in shop
windows across more than 1,000 UK and Republic
of ireland stores after the launch of its mobile site in
november 2011
September 2012 Pretty green starts using one-touch
technology Simply Tap on its new mobile store to
allow customers to be able to pay securely and
have their purchases delivered with just one tap
on their mobile device
October 2012 Sainsbury’s launches scan-and-shop app
August 2013 Clarks partners with Udozi to allow
consumers to locate their nearest Clarks store, search
for specific items and check stock levels through the
free Udozi mobile app or website
April 2013 M&S rolls out virtual rail in Amsterdam store
integrating digital rails with physical rails of clothing
samples. it enables customers to place orders for free
delivery through in store points, sales assistants’ iPads
or on their own phone using the store’s wi-fi
May 2013 Asda launches self-scanning in-store app
Mobile is absolutely a key part of the multichannel strategy as the primary enabler to help bridge the gap between store and web Nadine Sharara, Thomas Pink
winter 201330
The structural changes taking place on the UK high street continue apace. The question of how many stores a retailer really needs in the face of online growth continues to be asked, and a host of UK retailers including
New Look, Oasis and Mothercare are restructuring their store estates accordingly. Secondary and tertiary high streets, meanwhile, have felt the brunt of these changes and many are plummeting into a state of disrepair.
Managing this shift has led to a new set of requirements for retailers’ in-house property teams. Many are taking a more strategic, proactive approach to managing their existing estate, planning new stores with even more care, and are challenged to think more radically to ensure the profitability of the existing portfolio.
“The pace of change in the retail market means that you have to readdress the business case for stores,” says John Lewis acquisitions and development manager Andrew Mills. “It’s critical to make the most out of the estate. Retailers are opening fewer stores so it’s important to give your store the best possible chance of doing well.”
Retailers are not just opening fewer stores to match shoppers’ ever-changing requirements, they are also altering the size and shape of their existing ones. Space-sharing schemes are becoming increasingly common as
TOp TeAM
Report
As the retail landscape and store portfolio requirements rapidly change, a retailer’s property team is critical. Gemma Goldfingle examines the shifts in the property role and looks at how retailers are managing talent in their teams
retailers have come to the conclusion that big-box retail might be slowing down. Tesco, for instance, has signed over space in its larger stores to gym operators and is in talks to strike a similar deal with Sports Direct. It has even made acquisitions and investments in firms such as coffee shop Harris + Hoole and restaurant Giraffe to integrate into its larger stores.
Consequently, property teams have to be far more imagi-native to ensure their existing portfolio remains profitable. entrepreneurialism is now a key characteristic of a property manager. Fashion retailer New Look has realised that many of its stores are too big and is looking to bring comple-mentary concessions such as nail bars and cafes into shops. Kingfisher-owned B&Q has also signed away space in 18 of its stores to the grocers and is mulling making Tesco-style investments to help fill its larger shops. Kingfisher chief executive Ian Cheshire says its property team is encouraged to “think radically” to solve the space problem.
Dan Innes, founder of property marketing firm Innesco and chairman of the British Council of Shopping Centres NextGen committee, which focuses on developing young property talent, says: “Retailer requirements have shifted, [they’re] looking for different kinds of space, new configura-tions, new locations and the retail property professional has had to anticipate this instinctively.” Mills says under-standing how new shopping behaviour, particularly online
31winter 2013
– which accounts for over a quarter of John Lewis’ sales – will impact business at a site is now an important part of the assessment process for new stores.
The rise of online retail has also changed the type of space that retailers are looking for. Click-and-collect is one of the fastest growth areas across retail so space is needed both in store and in car parks to accommodate this. Innes points out that some UK retail entrants have focused on online to build its following in the UK before opening stores. US casualwear giant J Crew had its online debut on Net-a-Porter three years ago before launching its first store on Lambs Conduit Street last month. As a result, property teams have to be more in-tune with online. “Retail property teams need to be more multi-layered, recruiting ecommerce specialists within their teams,” says Innes. “Another emerging trend is that the roles of the CTO [chief technology officer] and property director are more inter-linked than we realise, encompassing issues such as logistic and distribution challenges, not just high street presence.”
Fast-paced and opportunisticThe changing high street is opening up opportunities for retailers with room to grow. phil Whittle, head of store operations at footwear retailer Schuh, which has 100 shops, says good pitches have been easier to find in the face of other retailers contracting. But negotiating the right deal remains critical. “There are good incentive-led deals to be had. Our strategy is to be deal-led. If two locations of a similar size come up, we’ll see what deals are offered,” says Whittle.
Mills agrees there are deals to be done and says John Lewis looks for “hard negotiators” in its property personnel. JD Sports has also been opportunistic, says property director Nigel Keen. The retailer has been highly acquisi-tive during the downturn, snapping up chains such as Blacks, Millets and the Dutch retailer Setpoint’s portfolio. Keen says the role of the property director has been height-ened during its acquisition spree. “Making the property piece work can make or break a deal. The firm has always understood the value of the property team, but maybe even more so now,” he says. Acquisition activity brings other challenges, too. “One of the biggest issues for our guys is time management. It’s a very fast-moving business. From new acquisitions to lease expiries, the pace is immense,” says Keen.
Keen says talent is paramount, and it is the pace of life that attracts dynamic people to JD Sports. “We’re so active in the marketplace and people know that. They’d rather work with a company that is doing interesting stuff and has a good story to tell,” says Keen. He says JD’s strategy of expanding during the downturn has allowed him to grow his team to ensure they are well-equipped to take advan-tage of opportunities that the weakened market has offered. The retailer now has a market research function in-house, and an internal shop-fitting team, which allows the property team to pounce on short-term prospects such as pop-up stores.
The group opened a raft of pop-ups for fashion fascia Bank last Christmas to benefit from the festive surge, and Keen says it intends to open more this year. “The market has allowed us to trial different things such as pop-ups. There are very attractive retail deals and short-term deals to be had. We can try a new concept and develop it relatively cheaply,” says Keen. Other retailers including Game, Toys R Us, Hamleys, Argos and John Lewis have opened pop-up shops over the past couple of years.
Although finding quick-thinking, entrepreneurial people can be a challenge, property professionals are still attracted to retail, which Innes says is viewed as the most dynamic part of the industry. Mills agrees and, in turn, John Lewis looks for recruits that can handle fast-paced environments like retail. “They need strong analytical skills and the ability to get into the detail, which is quite a skill,” he says.
Innes believes that remaining connected to the wider property market is key as it’s the biggest shop window for new talent. He highlights groups like NextGen, which he chairs, as very important in bringing together the best young people across property. Innes says: “Networking at events, keeping in contact with key decision makers around the sector, and knowing who is expanding, contracting, or changing their business plan is more valuable than ever before.”
With an increasingly complex workload and a remit to be a radical thinker, not everyone can take the heat of life in a retail property team but for those that can, there are rich career progression opportunities. “In many retailer businesses, the property director is a board level position – so you really can rise to the top,” says Innes. And with property professionals reacting and reinventing to cope with the changes in the retail sector, their skills are a much-needed addition to a retailer’s top team. l
OVERSEAS ExpAnSiOn
Whereas few retailers are expanding rapidly on the UK
high street, it is a different story overseas. Retailers includ-
ing primark, Sports Direct, Hobbs and JD Sports are looking
to propel their growth by expanding internationally.
“With 350 stores there is limited opportunity for JD to
grow in the UK,” says JD Sports property director nigel
Keen. “We’re in France, Spain, Holland and are soon to
be launching in Germany, which has implications for the
team.”
property teams need to be experts in markets outside
of the UK. When launching in a new country finding
the right store locations can be make or break. JD has
recently hired a European expansion manager to focus
solely on getting to the bottom of the property market in
new countries.
As international rises higher up retailers’ agenda,
overseas experience and multilingualism will be an
increasingly attractive skill for would-be employers.
OUtSOURCinG
Retailers’ requirements for stores
is changing and few retailers
regardless of size look to boost
store numbers.
it is the quality of locations rather
than quantity that is driving new
store development.
With fewer acquisitions to be
made, some retailers such as Oasis,
Coast, Warehouse and Karen Millen
have outsourced their property
function.
property agent Harper Dennis
Hobbs has set up its Corporate
Outsourced Real Estate Manage-
ment team, led by former Aurora
property boss ian Dudley, to help
retailers with less than 100 shops
find the best stores for their brand
and help them get cost savings
on existing stores without the
expensive overhead of an in-
house property team.
Outsourcing also allows
retailers that are eyeing overseas
expansion to benefit from agents’
international expertise.
Retailers such as Mothercare (top, left) are restructuring their store estates because of the growth in online; tesco has integrated coffee shop Harris + Hoole (above, right) into some of its larger stores
winter 201032
Fashion
FACTS
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Retail view
32 winter 2013
Q There’s a focus on international retailers in the UK in this issue.
Why is the UK a great retail market?RA The UK has long had a tradition of great retail and world famous shopping areas. Many UK retailers have also embraced modern technology and adapted their off ering to the changing ways that customers like to shop. It’s a crowded marketplace, but the UK mar-ket is seen internationally as a good option for retailers expanding into new markets. They are able to tailor their off ering in a way that suits their business.BL I agree. The UK is one of the best retail markets, with many international brands, and a discerning cus-tomer – it’s perfect for any new brand to launch and test new products. If you succeed in the UK, you increase your chances of succeeding in other markets.
Q What shape is the UK retail market in at the moment?
RA The UK economy is showing positive signs with a general improvement in household fi nances, which ultimately is good for retail sales growth. However, we’ve seen this before without it being sustained, so we remain cautiously optimistic.BL It varies depending on retailers’ customers, but overall, consumers are cautious. Mindsets have changed from ‘If I see a good deal I buy even if I don’t need it’ to ‘I will buy when I decide I need it’.
What customers choose to spend their money on has changed in the past 10 years. Spending on cloth-ing and accessories is not the priority it was – spending on mobile phones, broadband, going out and going away is more of a priority now. Many people want to reduce or increase their debts and start saving, so retail growth needs to translate into growth in disposable income, then fund debt reduction and higher savings.
Q How can retailers keep up with changes in shopper demands?
BL Getting attuned to your customers is always chal-lenging, especially when you operate across many
THE RETAIL VIEWcountries and continents. There was a time though, even just fi ve years ago, where you could see patterns and pretty much predict shopping behaviours. To a large extent I think these days are over – the ability to react fast has become critical. The need to read the market and be bold is what works now. The plethora and fragmentation of infl uences such as social media, in addition to traditional sources such as TV, press, family and friends, celebrities and so on, creates many ‘small waves’ in specifi c circles of customers.RA I agree. UK consumers have embraced ecom-merce faster than others, so retailers need to ensure they keep up to date with the latest technology for en-abling multichannel shopping opportunities. Consum-ers are becoming used to the convenience of being able to view items, purchase and then return goods through any channel that suits them.
Q What is challenging about being a retailer in the UK?
BL The UK is a very competitive marketplace with the continued arrival and growth of new players. One fascinating aspect of this market is that the consumer embraces new technology such as ecommerce and m-commerce faster than in other markets. This is great for the multichannel side of the business, but means retailers have to look closely at their bricks-and-mortar strategies. There are also other challenges to contend with – in many locations there are high rents and service charges, long leases, upward-only rent reviews, and few break clauses. RA I understand some of your concerns about accessibility and environmental issues, but in my view, there are many extremely high-quality retail destinations in the UK. It’s the business rates burden that is primarily responsible for cost pressures and this, combined with high levels of competition and a weak consumer economy, is proving quite a challenge.
As the retail landscape evolves, consumers’ shopping behaviour is changing. A1 talks to Land Securities executive director Richard Akers and Claire’s Europe president Beatrice Lafon on the state of play in the retail market
THE RETAIL
33winter 2013
Q The exclusive research in our retail parks feature proves consumers
think they are evolving. How do they compare to fi ve years ago?BL Our real estate strategy supports a balanced port-folio – that balance will change by market. In the UK we invest in high streets, shopping centres and retail parks. Retail parks’ off er of free car parking and poten-tially later opening hours is an attractive proposition. What matters most is customers’ traffi c. This is what we look for in each potential location.RA Retail parks have lost a number of retailers in-cluding Best Buy, Comet, Allied Carpets and Focus DIY. There are more vacancies but retail parks are beginning to off er more leisure and food and beverage outlets as well as large stores. This change has trans-formed their image and many are a place where people can spend time, rather than just warehouses where you would go to pick up large items in your car.
Q Why do you think consumers want more fashion retailers
in out-of-town retail parks? BL Customers look for balance, diversity and choice in the line-up of retailers to make it worth visiting re-tail parks. Mixed-use shopping centres are good ex-amples, as you can visit even if you don’t know what you want. There is something for everybody and every mood. Free car parking, easy access and good sur-roundings add value to the experience and ensures customers choose to come back. RA Consumers like the convenience of out-of-town retail parks. They off er plenty of free parking and store sizes are much larger, which means that retailers are able to have a larger selection of products on display and in stock for people to purchase. This is great for the big stores such as Marks and Spencer, Next, TK Maxx and Primark, but the retail parks are generally only accessible by car. This means that it is a more challenging environment for smaller operators and those aimed at a younger demographic.
Q What are your predictions for Christmas?
BL I remain cautious. We like to think customers will ease any restrictions they might have out on their spending. We also do our best planning for the golden quarter and many ranges will launch at that time. Un-employment is going down and property prices are rising, but it will take time for that to be believed and felt by consumers. As in the past few years, Christmas will happen late this year. The trading strategy retail-ers adopt for the last couple of weeks will be key.RA I’m slightly more optimistic. I think retailers will have a good Christmas. The consumer economy is not in great shape but it is improving and there is every prospect that retailers will get their stock levels spot on and maintain margin.
Q What international retail markets can the UK learn from and why?
RA There is a long history of the UK following the US. The popularity of big shopping centres, the pro-vision of food and beverage and some great retailers crossing the pond.BL You can learn from many markets – the key is to see which best practice fi ts your business at that point in time. As a retailer the one market I fi nd interesting is France. Sale periods there are strictly regulated – lead-ing to price not necessarily being the main competi-tive tool. This can also lead to higher profi tability. I also like the 35-hour weeks. From a real estate point of view, many deals are structured with key money, in which the landlord accepts the original rent from the new tenant. This is great for ongoing profi tability.
Q What consumer spending behaviour is giving retailers
the greatest challenges?RA Although new technology is giving customers more choice it has also led to a trend in showrooming, which is a particular challenge for retailers. Customers come to view products in store and then use technol-ogy to compare prices with other retailers before pur-chasing at the cheapest price. Shoppers are expecting more of an experience when they go shopping and high service levels are going to be key to ensuring cus-tomer loyalty.BL That’s true. Right now, I think that as a retailer you are open 24 hours a day, 365 days a year. You need to put your best foot forward, always, in many lan-guages, with no cultural faux pas or downtime. You also need to be relevant locally and all of the time. This is our biggest challenge.
Q We’ve focused on mobile in this issue. What does great mobile
retailing look like?BL We see mobile as an integral part of any retail busi-ness. You need to be where customers are, you need to be available when it suits them. Mobile is a key enabler in this context, and this is why we launched our mobile site the same day as we launched our website.RA Retailers need to ensure their mobile off ering is part of their overall brand strategy so the shopper con-tinues to have a seamless shopping experience no mat-ter which channel they choose to shop by.
THE RETAIL VIEWVIEWTHE RETAIL VIEW
Land Securities Retail
Shopping centresLocation Property Name Area sq m (sq ft) Principal Contact Phone Number
Birmingham Priory Square 26,003 (279,900) James Larmuth 0113 261 5356
Bristol Cabot Circus 134,986 (1,453,000) Vasiliki Arvaniti 020 7024 5134
Cardiff StDavid’sDewiSant 130,063(1,400,000) GraemeStevenson 02070245415
Dundee OvergateCentre 39,019(420,000) KatherineArmstead 01413314409
Exeter Princesshay 49,238(530,000) SimonHaworth 02070245137
Glasgow BuchananGalleries 56,411(607,200) KatherineArmstead 01413314409
Leeds Trinity Leeds 92,902 (1,000,000) James Larmuth 0113 261 5356
Leeds White Rose 63,174 (680,000) Harlan Pollitt 0113 261 5351
Livingston TheCentre 80,639(867,986) KatherineArmstead 01413314409
London OneNewChange 20,439(220,000) DavidAtcherley-Symes 02070243730
London Shopstop, Clapham 4,170 (44,884) Jack Busby 020 7024 5487
London LewishamCentre 31,269(336,579) AndrewRawlings 02077472336
London W12,Shepherd’sBush 24,155(260,000) AndrewRawlings 02077472336
London TheO2Centre 25,770(277,385) AndrewRawlings 02077472336
London Southside,Wandsworth 49,238(530,000) JackBusby 02070245487
Oxford WestgateCentre 29,729(320,000) SimonHaworth 02070245137
Salisbury TheMaltings 8,921(96,022) GemmaDew 02070245133
Sunderland The Bridges 47,844 (515,000) Harlan Pollitt 0113 261 5351
Outlets Location Property Name Area sq m (sq ft) Principal Contact Phone Number
Hatfield TheGalleria 29,729(320,000) DeepanKhiroya 02070245436
Portsmouth GunwharfQuays 39,483(425,000) JackBusby 02070245487
Retail parks
Location Property Name Area sq m (sq ft) Principal Contact Phone Number
Bexhill-On-Sea RavensideRetail&LeisurePark 24,131(259,750) HermioneMackrill 02070245486
Blackpool Blackpool Retail Park 11,271 (121,323) Charles Clarke 020 7747 2318
Bracknell ThePeelCentre 15,384(165,592) NickDuffield 02070245485
ChadwellHeath GoodmayesRetailPark 9,197(99,000) CharlesClarke 02077472318
Chester GreyhoundRetailPark 18,859(203,000) HermioneMackrill 02070245486
Chesterfield RavensideRetailPark 12,344(132,875) CharlesClarke 02077472318
Derby MeteorCentre 16,920(182,130) NickDuffield 02070245485
Dundee KingswayWestRetailPark 27,768(298,900) HermioneMackrill 02070245486
Gateshead TeamValleyRetailWorld 35,083(377,650) NickDuffield 02070245485
winter201334
Livingston AlmondvaleRetail,South&West 35,285(379,800) NickDuffield 02070245485
Northampton NeneValleyRetailPark 13,657(147,000) CharlesClarke 02077472318
Poole CommerceCentre 19,325(208,011) NickDuffield 02070245485
Taplow TheBishopCentre 9,429(101,500) NickDuffield 02070245485
Thanet WestwoodCross 44,129(475,000) HermioneMackrill 02070245486
West Thurrock Lakeside Retail Park 35,004 (376,778) Hermione Mackrill 020 7024 5486
Workington Derwent,DerwentHowe 14,903(160,426) CharlesClarke 02077472318
Leisure centres Location Property Name Area sq m (sq ft) Principal Contact Phone Number
Bath Kingsmead 8,361(90,000) PollyTroughton 02077472398
Manchester Printworks 32,516(350,000) JulieGarsden 01614865035
Nottingham TheCornerhouse 20,900(225,000) AndrewRussell 02077472395
Boldon BoldonLeisurePark 5,275(56,780) AndrewRussell 02077472395
London WestIndiaQuay 6,597(71,010) PollyTroughton 02077472398
London GreatNorthLeisurePark 8,542(91,945) AndrewRussell 02077472395
Wolverhampton BentleyBridgeLeisurePark 9,195(98,974) JulieGarsden 01614865035
Kent EurekaLeisurePark 9232(99,372) MarkLomax 02077472396
Aberdeen QueensLinksLeisurePark 11,951(128,639) MarkLomax 02077472396
Maidstone LockmeadowLeisureComplex 13,214(142,234) AndrewRussell 02077472395
Cambridge Cambridge Leisure 13,863 (149,220) Mark Lomax 020 7747 2396
Poole TowerParkLeisurePark 18,510(199,240) MarkLomax 02077472396
Norwich Riverside 19595(210,920) MarkLomax 02077472396
Leeds CardiganFields 21,436(230,735) JulieGarsden 01614865035
Edinburgh FountainPark 21,636(232,890) AndrewRussell 02077472395
Manchester ParrsWood 21,795(234,600) JulieGarsden 01614865035
Brighton Brighton Marina 31855 (342,884) Mark Lomax 020 7747 2396
Yorkshire XscapeYorkshire 33,650(362,205) JulieGarsden 01614865035
MiltonKeynes XscapeMiltonKeynes 39,109(420,966) AndrewRussell 02077472395
Developments Location Property Name Area sq m (sq ft) Principal Contact Phone Number Opening
Crawley SussexHouse 10,999(118,388) ChrisWard 02070245482 2013
Taplow TheBishopsCentre 12,217(131,500) NickDuffield 02070245485 2014
Wandsworth Wandsworth 8,733(94,000) NeilCarron 02070245051 2014
Maidstone NewnhamCourt 20,903(225,000) ChrisWard 02070245482 2015
Glasgow BuchananQuarter 37,161(400,000) NickDavis 02070245203 2017
Oxford Westgate 74,322(800,000) BertMartin 02070245076 2017
SellyOak SellyOak 20,903(199,300) NeilCarron 02070245051 2017
Ealing EalingFilmworks 21,695(233,527) RiccardoMai 02070245136 2018
winter2013 35
W H Y ’ S S H E T H R O W I N G A
PA RT Y ?So everyone will see
her new dress.FA M O U S B R A N D S , D I S C O U N T P R I C E S A N D A M I L L I O N E X C U S E S TO S H O P.
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P R E M I U M R E TA I L O U T L E T
LSC2256_A1Backpage_ST5.indd 1 31/10/2013 13:30
