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What’s really going on in retail?

The rise of populism has stifled debate not just in politics but in business as well. Whilst calling for a proper debate on Brexit, the future of liberalism and conservatism (both dying), house building, you name it, everyone takes extreme positions that stifle the exchange of ideas. The truth is, the answer to everything is generally somewhere in the middle, and so it is with retail.

While the media generally takes the dark side, focusing on store closures and job losses, the opposing side talks about a glorious future for the store reinvented for the new consumer. (That’s a bit unfair about the media, I’m a media owner myself, because if you take the time to read the analyses, they do reveal the true picture, but it is the headlines that scream doom and gloom.) They are both right up to a point, but what is hidden is a true picture of what retail might look like. And worse, people who live at the poles of opinion tend to hold extreme views that prevent them from considering different scenarios.

Here’s what I think retail will look like in five years and beyond. These predictions contain a good amount of optimism because I’m that kind of guy; so I am hoping for things that can only happen if people who currently think only of themselves, start to think about other people for a change, specifically local authorities, landlords, tenants, tech companies and industry bodies stepping out of their echo chambers.

  1. The classic terraced high street property of two or more storeys will move to mixed use – retail as well as residence; if you want people to visit the high street, why not enable some of them to live there? This will require a shift in ownership as well as thinking by local authorities and landlords but it is a good idea. And once it happens, new communities will emerge that collaborate to develop even more ideas for use of space.
  2. Out of town retail will undergo a revival but on the back of a more enlightened view of how to mix retail, residential, business and leisure, as they have to some extent done in the US. A little like Milton Keynes perhaps but either way, we need to stop letting house builders buy land without proper consideration for transport links, schools, retail, leisure, drainage and so on. Is it really too much to expect a new generation of smart but tough civil servants to emerge to run local government who can get this done?
  3. Retail will have to adapt to the rising power of the brands that now have the confidence and the capability to go direct. Brands are some way behind on (direct to consumer) D2C strategy, tech, logistics and supply chain but they catch up fast and there is a new generation of suppliers to support them. Will retail and D2C ever become indivisible? Yes, and the financial model that separates them will have to change, because there will actually be more intermediaries between farm and fork, factory and wardrobe than ever before, each wanting a piece of the pie.
  4. The ultimate intermediary of course will emerge as the end consumer, already managing a growing share of their shopping journey, whilst wanting to protect their data – they may well ultimately be in control. Influencers and celebrities to which brands now flock to launch new products are only once removed from consumers and consumers themselves have access to all sorts of channels that put them in control. And the tech that is being put into their hands is now so powerful that they are already in control, as long as they can also control their own data.
  5. You can’t really say what will happen. The top predictions for 2018 were augmented reality, virtual reality, and 3D printing and all of those are now either at the bottom or off the list. One thing is certain; it took only a year for people to shift from thinking the store was safe as long as it changed to where we are now, accepting that there will be a lot less stores in the future. What this means is, given that UK retail in particular has been over-stored and over-stocked for more than five years, retailers are going to have to change a lot quicker than most of them realise. For most, evolution is not the way forward because that suggests they simply have to get better at what they already do now. No one believes that any more do they?

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