Can Great Retail Survive In The Age Of Inflation?
I was recently asked to nominate my three favourite retail destinations from around the world — not an easy task you might imagine. Starbucks Reserve Roastery in New York? Harrods in London? Or how about Jelissejew delicatessen in Moscow?
All three are wonderful places to spend time, and that got me thinking.
What is it that we like and which attracts us to physical shopping spaces as opposed to our mobile phones or laptop screens? I’d wager that for most of us, great retail means a sense of occasion, somewhere where we get transported to another place.
Because, let’s be honest, there’s only so much fun you can have with a mouse or pinching your smartphone.
Great retail is so much more than simply selling products. It’s about experiences, it’s about a sense of place, it’s about storytelling and it’s about a sense of wonderment. But in this age of inflationary pressures, the cost-of-living crisis, and skyrocketing energy prices, will it survive?
After all, most of us might be happy to browse, but purchase? Unlikely when all we want is cheap and for many the only thing on our minds is feeding the family, turning off the lights and putting fuel in the car.
Thankfully however, it’s not as binary as that. Because, just as in lockdown, when we all craved to get outdoors and meet up with our friends again, for many of us, spending time in great stores can be a joy.
And that is probably one of the reasons why, post-pandemic, the level of online shopping has slipped back from its peak in lockdown of over 37% in the UK. And the exact same trend has been witnessed in the US although with not quite the same penetration.
Which means that (drumroll) we like shopping in stores — who’d have thought? And whilst online will always serve a purpose (think convenience, repeat, commodity) there’s nothing to suggest that we’re likely to stop visiting stores anytime soon.
In this post-pandemic world, small gains are to be celebrated. According to Helen Dickinson, Chief Executive of the British Retail Consortium, in May this year, “UK footfall made small advances for a third month in a row, as the particularly warm May weather saw more people shop in person” Nevertheless, it was still 12.5% down compared to pre-pandemic levels.
However, it’s not all doom and gloom. In 2014, Deloitte published research and analysis predicting it would be the high street rather than shopping centres or retail parks that would prove most resilient over the coming years. In 2020, they re-visited that prediction and didn’t change their minds:
“While the rollcall of retail and leisure failures might suggest that the high street does not have a future, we would argue the opposite. We believe, the high street is ideally placed to reinvent itself in response to the structural shift in working and shopping patterns that has resulted from the COVID-19 pandemic”
Amen to that.
And my three favourite retail destinations? Well, I applied a self-imposed rule that I must have visited them at least once. And so, in no particular order, they are:
- Situ-Live, Westfield London
- Samsung, New York
- Primark, Madrid
I’m sure you will have your own personal favourites and I could have listed plenty more examples but these for me stand out for their ability to offer a memorable experience.
And as psychologists tell us, the memory of the experience is more important than the experience itself.