Navigating the Death of the High Street
In recent years, the traditional brick-and-mortar retail landscape has undergone a seismic shift as once-thriving high streets now face the crisis of survival. Retail corporate occupiers and those organisations that lease or own retail spaces on these streets, are at the epicentre of this transformation. As the rise of e-commerce, evolving consumer preferences and a series of socio-economic disruptions lead to a significant decline in foot traffic and retail viability, these occupiers are forced to reassess their property portfolios and business strategies to remain relevant and profitable.
Although long integral to the retail eco-system, high streets have faced a decline accentuated by online shopping convenience and delivery reliance turning traditional shopping into an unnatural activity. Whilst chain rescues like Wilko have failed, and essential services like banks and post offices are disappearing, Brexit, Covid-19 and the cost-of-living crisis have prompted retail corporate occupiers to pivot their strategy. As online purchasing erupts, high street stores stay outdated.
Consumers are unlikely to forego the convenience they have acquired, pushing businesses to integrate robust digital strategies with their physical presence. Thereby creating a seamless omni-channel experience where digital and physical stores complement rather than compete against each other, fostering both engagement and loyalty. As vacancy rates soar and rental income declines, the traditional model of leasing space to retail tenants is no longer as lucrative or sustainable. These depreciating property values prompt a reassessment of how retail space is utilised.
In response, forward-thinking occupiers have renegotiated lease terms to include more flexible arrangements like turnover rents. Alongside repurposing retail stores to make the art of live shopping more focused on experience and service over products, as demonstrated by Harrods opening ‘H Beauty’ stores with interactive make-up, skincare, and fragrance stations. Opportunities arise for occupiers who are willing to adapt and innovate.
Modern online compulsion offers a chance to attract new types of customers with multiple touchpoints to your business. As Next launches the ultimate one-stop shop, it offers an online platform for brands to market and sell their product’s goods. Attracting customers to multiple brands in one space, retailers can optimise tenant cost savings within its own brand. This can be seen with Next’s partnering with Amazon. Next enables Amazon customers to collect parcels from its stores, aiming to increase consumer traffic into its own landscape.
Central to lessons learned during the pandemic for human interaction, Amazon, enters the physical retail space with its first store in London, presenting a prime example of how omnichannel retail can be seamlessly blended. The transformation of the high street calls for a re-evaluation of how corporate occupiers approach their business models.
The modern-day customer has the opportunity to choose from online and in-store pickup, arguing the occupier must meet every expectation to stay successful. Being aware of customer habits coupled with the ability to innovate and be flexible, retailers must embrace the diverse experience-oriented high street to survive. In this transformation, the power dynamics between the consumer and retailer have changed. It is now for the retailer to innovate and create a brand with touchpoints across all platforms to remain competitive in this retail revolution.
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