Renaissance

Chapter three

Will Build to Rent lead to a renaissance of the UK’s high street? 

Ed Ellerington, Founder and Managing Director of Packaged Living which is a bespoke Build to Rent (BtR) developer and operator creating new and sustainable homes within local communities, thinks so, “There is still a chronic lack of good quality rental homes in our towns and cities. The problem is supply. We are proud to be at the forefront of the private rented sector committed to delivering on our promise ‘local living at its best’”. 

The BtR model provides more choice for renters with higher standards of accommodation. At Packaged Living developments people can take on flexible leases, on-site storage is provided, hire cars are available and cleaning and housesitting services are offered alongside gyms, games room and crèches. Within their developments, Packaged Living set out to create mini-communities where people can live, work and socialise together. 

Ed adds, “We aim to bring people back into town and city centre living. Across our locations we are creating vibrant mixed-use schemes with good quality build to rent homes, co-working and amenity spaces, and landscaped roof terraces. Rather than anchoring the ground floor retail units with a Tesco Metro or a Lidl, we look to attract independent shops, flexible work spaces, pop-ups and community services such as doctors and dentists”. 

In Leicester they are working with Hammerson to redevelop the former Debenhams store into 300 rental flats with a roof garden for tenants in the Highcross shopping centre. These initiatives will contribute to a renaissance of the high street. The project will also see part of the store turned into flexible retail units and support the shops still operating in the centre. 

The high street needs to be reset by understanding how towns and cities were originally formed with retail blended with other uses including leisure, work spaces and residential.

The shift in retail and changing consumer shopping habits have meant that city-centre retail destinations such as Highcross need to adapt their offer and mix of uses. Collaborations with operators such as Packaged Living mean that we can start to curate places that are more sustainable, more secure and more like many of our towns and cities were before retail started to push everything else out. It’s an exciting opportunity to reimagine our towns and cities – and fundamentally rebuild our communities by utilising the existing infrastructure. 

The brand revival on the high street 

There is an urgent need to regenerate our local high streets. So how can retailers and brands respond to this crisis? Fortunately solutions can be found within the industry itself with retailers finding new ways of providing value and more innovative methods of creating excitement to draw in customers. 

Mark Pilkington adds, “It’s pointless to use high street shops as a glorified warehouses full of stock which can be seen and sold online. Going forward it has to be about engaging customers in a way that they can’t experience from their screens. Injecting more theatre and excitement into the high street shopping experience increases their appeal to customers across the generations”. 

Our client AllSaints is certainly doing that. Their appeal is based on the range of sophisticated and effortless essentials inspired by a gritty urban aesthetic. Tim Sharp, Global Director of Store Design & Construction, explains, “The store is as much a part of our brand experience as any other channel. It’s as simple as that. The day we shut our stores is the day our brand dies”. 

AllSaints is as much about the clothing as offering a distinctive brand experience. Tim adds, “From the moment a customer walks into an AllSaints store, they are greeted with an aesthetic with mood lighting, worn wooden and industrial concrete floors, exposed brick walls, vintage Singer sewing machines, minimalistic designed hanging rails and beautifully curated clothes - which all carefully blended together gives a gallery feel to the environment. We have developed a unique approach to our marketing, retail and online strategies to create a brand that blends music and fashion across our design decisions, bricks and mortar, online experience, social media channels and every customer interaction. We look for diverse and entrepreneurial employees who will be able to showcase the brand experience. From our stylists remembering clients’ names and birthdays, live Instagram streams from our shops, to offering physical and online VIP appointments, we aim to make our clients feel special and return time and time again to our brand”. 

As more people are becoming vaccinated, customers want to return to the high street and in-store shopping but on their own terms. The ease of online shopping has led customers to expect and demand an in-store experience that is seamless, efficient and safe. The best retailers are combining their store and online models to drive compelling customer experiences giving them more reasons for shopping with them. 

This is where the omni-channel model comes in. Customers can buy online and pick up their order in-store at their convenience during opening hours. Customers are increasingly expecting free shipping when they buy items online and for their items to arrive as quickly as possible. Although not a new concept, the beauty of the omni-channel model is that it also benefits retailers. As the customer is visiting a bricks and mortar shop to pick up their order they’re more likely to browse other items, therefore increasing the probability of impulse purchases as well as have the opportunity to enjoy the brand experience a physical store is able to offer. 

Brands that have successfully acknowledged that customers enjoy the quick and convenient online shopping experience are harnessing technology to make the in-store experience as seamless as possible. Retailers such as AllSaints are offering fast, easy and frictionless ways to pay via Apple Pay and other contactless payment methods so the in-store checkout experience is more streamlined and efficient to better mimic the ease and convenience of online shopping. 

Click and collect was growing in momentum before the pandemic. Shipping online orders from stores as opposed to the warehouse was gaining traction as retailers realised that inventory management is crucial to a good customer experience as well as the reduced fulfilment times. Tim adds, “You get one chance to sell that t-shirt, you don’t want to miss out on that sale and you want that t-shirt to be available to any customer wherever they are. We use our shops as a combination of showroom for our brand and mini warehouse to support the online part of the business rather than solely transactional locations. A large part of our e-commerce strategy is about humanising and personalising the online shopping experience”. 

In his recently published book, Retail Recovery: How Creative Retailers Are Winning in their Post-Apocalyptic World, Mark Pilkington adds, “Brands need to encourage their retail staff to be brand ambassadors and advocates ready to play their part in the company customer experience journey whether they are on the shop floor, in a call centre, or engaging online”. 

Challenger brands like Rapha and Gymshark have gone one step further and built communities to give customers a reason to keep engaging with their brand and themselves become ambassadors and advocates. Across Europe, North America and Asia-Pacific, Rapha have created their clubhouses which are a retail space dedicated to their latest products and provide a café and a programme of live racing, rides and events in global cycling cities including Edinburgh, Leeds, London and Manchester in the UK. 

Technology is fundamentally changing the high street experience 

This will be key to the renaissance of the high street giving retailers a vision for the future and new ways to engage customers by implementing exciting and innovative technology. 

Japanese retailer Uniqlo is a true retail and technology pioneer. Often described as a ‘digital consumer retail company’, for some time they have been investing more in technology and expanding their global online offering than in their physical retail shops. This has helped them survive the pandemic. In 2018 they launched their first ‘neuroscience’ fashion campaign based on the concept of suggesting clothes to the customer dependent on their mood. UMood, a wearable technology, was placed on the customers’ foreheads. Then a series of images and videos were shown to them. The brainwave reading provided by the customer’s psychological reactions was placed against an algorithm that then suggested a t-shirt from their range to match their state of mind either ‘adventurous’, ‘calm’ or ‘stressed’. Currently their innovative self-checkout system lets you know what to pay without scanning any tags. You simply drop your clothes into the basket as you go along and it tallies up the amount in seconds before giving you various payment options. 

Adidas LDN, the brand’s flagship site on Oxford Street, features over 100 digital touch points that are all powered by green energy. The shop showcases their latest and best-selling releases and also offers a technology-driven customer experience including interactive changing rooms. Customers can take part in product experiences, activations and interactive challenges in an immersive environment made from LED screens and flooring that can change mood and purpose with one click.

Customers are also given the option to personalise their own clothes and footwear, a process that can take between 15 minutes and three hours, depending on the design chosen. They even offer a ‘Running Lab’ where customers can run on a treadmill that records their run and ultimately helps them decide what type of shoes would be best suited to them. 

Carl Selby, Partner and Head of Technology at Royds Withy King, comments, “Whatever lies ahead in what is expected to be another rocky twelve months for the sector, those retailers who make the best use of new technology within their shops on the high street and online to give a more personalised and integrated experience whilst making their supply chains as efficient as possible to give customers what they want, when they want it and how they want to buy it will be the retailers that thrive”. 

Retail theatre as the brand differentiator 

Experience is becoming a clear brand differentiator. It’s all about creating theatre, standing out with memorable and immersive experiences for your customers whilst reminding them about your online presence. This is something only your bricks and mortar shops can really deliver. Instagram is the most popular social media platform for UK consumers with 46% of them saying it's the app via which they consumed the most content during the pandemic. 

As London began to open up in spring, fashion designer Anya Hindmarch returned to her brand’s roots and launched The Village concept. Located on the Cadogan Estate she opened five different yet highly instagrammable spaces on Pont Street spanning everything from a café to a traditional retail store to more experimental spaces. One store lets customers buy off the shelf, while another lets them order their own bespoke pieces. The village hall initially hosted a hair salon but its usage changes as the seasons evolve. Last month they ran fruit-carving classes for children and adults. 

The Village is the realisation of long-held ambitions by Hindmarch who wanted to offer a new type of retail experience in a post-pandemic world. This concept takes the idea of immersing the customer in a brand to a new level whilst combining a more innovative approach to real estate allowing the retailer to scale up and down as market conditions dictate. At a time when the sector has suffered, Hindmarch’s smiley-faced lamp posts and beautifully curated spaces are breathing much-needed life, and humour, back into our high streets. 

An unlikely renaissance of the retail park

Jonathan De Mello says, “One of the many unintended consequences of Covid-19 has been the renaissance of the out-of-town retail parks. Often dismissed as soulless and already hit by closure programmes and the collapse of chains like Comet, Toy R Us and Mothercare, a renaissance would have seemed unlikely before the pandemic struck. However the ease of access by car for those wary of travelling on public transport, free parking and more open space means customers feel safer and can enjoy the experience. Retailers operating out of larger units are also able to adapt more readily to social distancing measures with wider aisles and larger till circulation areas”. 

British Land, one of UK’s biggest commercial property owners, said trading at its out of town retail parks including Sheffield’s Meadowhall and the Broadgate complex in London was almost back at pre-pandemic levels. During summer with open-air retail parks that are accessible by car they have seen footfall and sales at 96% and 99% of pre-pandemic levels. As a result of this upsurge they are expanding their retail park portfolio (which make up just over half of the group’s assets) and recently acquired one at Thurrock in Essex for £82m. 

The resilience of retail parks has also attracted new occupiers. The burger chain Five Guys agreed to open half a dozen new restaurants since the start of this year and plan more in the next months on retail parks close to former commuter towns and cities that have been the beneficiaries of people working from home. 

Another retail park success is our client Pets at Home which is investing heavily in its in-store concept. Its stores provide a practical, fun and unique experience. They help owners select the right food for their pet with nutrition consultations, test that the water is safe for their fish tank before new fish are introduced and training classes to help socialise a new puppy. As a specialist pet care business, everything they sell is tested giving the customer peace of mind that they are buying a quality item which has been responsibly sourced. When they sell a pet to a new owner, their unique Pet Pad process ensures a prospective owner understands their pet’s welfare needs and asks customers to sign to say they have understood how to look after it. They also have in-store and standalone veterinary practices providing health checks and vaccinations right through to digital x-ray and operating theatres. 

We predict that stores on retail parks will also have a role in acting as showcases for goods for customers to buy online, to allow for click and collect services and provide an easy place for returns and exchanges. 

The out of town ‘destination’ shopping experience 

Another retail winner from the pandemic has been our client Oxfordshire-based Millets Farm Centre. With over 400 acres of farmland, plenty of free parking and room to socially distance, Millets offers a family day out to a unique destination - combining retail and leisure which their customers across all demographics visit time and time again. 

We caught up with Tony Carter, Director, whose family have been running Millets Farm since 1952, “During the pandemic our turnover increased in the farm shop with people wanting to shop locally and seasonally. Mindful of Covid-19 concerns, we introduced a concierge to greet customers and remind them of the social distancing measures we had put in place. This allowed us to monitor capacity and manage the flow of customers into the shop so people’s experience was a more pleasant one. We continued to offer click and collect where our customers could order fresh produce delivered straight to their cars”. 

In addition to providing this very accessible, local, safe and seasonable shopping experience; throughout the pandemic (restrictions permitting) Millets continued to offer a whole range of gardening and wellbeing workshops as well as its children's play area, animal walkway and Phoebe woods, falconry centre, play barn and seasonal events including Pick Your Own and their maize maze. 

Royds Withy King Real Estate Partner Peter Foskett comments, “Destination shopping spaces like Millets Farm offer shoppers of all ages a more enjoyable experience where it is free and safe to park, selling items that we prefer to see, feel and try on, that we buy on the spur and without planning, a drink and something to eat, a place to meet friends and family and the chance to engage with an activity. In short, somewhere we want to go to as part of our everyday lives rather than only when we need to go shopping. These out of town destination shopping experiences enable customers to take themselves and their social bubble to safely experience retail and leisure opportunities”.