Reinventing retail: how our cities can adapt to the crisis
29 Oct 2020
Throughout history, we’ve seen pandemics give birth to periods of radical creativity: from the Black Death and the Renaissance to the Spanish flu and the Roaring Twenties. Today, COVID has completely changed the face of retail; how can landlords adapt to it? How can we use this current crisis as an opportunity to change in a positive way?
We held our latest online event to ask some industry experts just how landlords can adapt to new trends in retail. We heard from Martyn Evans, Creative Director at U+I; Bronnie Edwards, Senior Retail Leasing Manager at Grosvenor Estate; and Luca Calcamuccio, Global Director of Retail Experience at Charlotte Tilbury. Here’s what we discussed:
What have been the biggest changes that your business has faced over the past few months?
Martyn: I’m in an office in Victoria Street, where retail is wholly dependent on the people that come to work here. All those people are now shopping somewhere else, which has an enormous impact on local businesses. Just because people are away from the office doesn’t mean they’re stuck at home – it means they’re spending more time and money locally. We’re seeing a huge interest in local high streets.
Bronnie: Our challenge has been pivoting to support our retailers who have been affected by the pandemic. Grosvenor has always been a long-term property business, but we’ve had to make huge changes in terms of agility and flexibility in this constantly changing environment.
Luca: For us, we discovered that working from home is incredibly effective. We’re opening a store in Bangkok this week and we did everything online. On one side we love the physical experience. On the other, it’s been a great learning curve.
London has recently been described as a ‘bagel city’ with an empty centre. What do you think landlords should be doing to bring people back into the city?
Bronnie: I think that some of the cultural benefits of central London will dilute and end up moving out into the suburbs. I’m speaking to lots of retailers that are going to where their customers are who are working from home. I still think there will be a benefit to being in the city centre because of its culture.
Luca: Why can’t a city be polycentric? I don’t know if pushing for central London is a long term vision. What I really need is a space that will attract our customers, when they can already purchase their products online. Right now, we need collaboration between landlords, city councils and brands to discuss what we can do together.
The power balance between landlords and tenants seems to have shifted. How much has that changed over the last six months?
Martyn: The very reason that Appear Here exists is because the current system of tenant retail property is broken. There’s an awful lot of money and power in our business that has allowed it to go wrong. What we have to do is reset and collaborate. You have to listen and understand the need. Otherwise, you’ll have empty shops.
Bronnie: I think that our relationships with our retailers have been reframed for the better – it’s much more collaborative now. We’re figuring out how we can create flexible products that are fit for purpose. This could be anything from the fit-out to the type of lease we’re offering.
Luca: As a brand, we have an obsession with our customers. As tenants, we are customers of landlords, so landlords should have that same obsession for us.
As an industry, retail has been a certain way for a very long time. Do you think this is a permanent shift in mentality for landlords?
Martyn: What we’ve seen in the past is that property owners want high street retailers with covenant. Suddenly, those bankable and bettable businesses aren’t so reliable anymore. Developers like me should be excited – let’s go and find creative businesses that will generate real footfall.
Luca: I think there has also been a shift in the mindset of brands. The KPIs for a store were normally profit or sales, but now people are talking about the story of a store and how it can be used as a media piece.
If brands are approaching the store in a different way, is this something landlords should consider too?
Bronnie: We definitely have to change and adapt our propositions – flexibility is something we’re looking at more and more. For example, if brands are using stores as billboards, it’s unlikely they’ll want a 5 or 10-year lease.
How can landlords encourage diversity in their spaces and support smaller start-ups?
Bronnie: It’s all about moving those barriers to entry. Before, it’s been about red tape and long leases, but we want to remove those and facilitate people’s ideas. We need to democratise the process to some extent.