Those retailers who fail to keep up with how we want to spend our hard-earned cash do so at their own peril, something Toys R Us discovered when it went into administration in February 2018. With more businesses due to close or downsize during the year, including Prezzo, who are closing 94 of their 300 restaurants under a Company Voluntary Arrangement, it is a problem which needs to be proactively tackled.
In order to properly address the issue, we first need to understand the underlying causes. A combination of increasingly tight margins and slowing consumer spending lie at the root of the decline. Property scarcity and the resulting high prices for bricks and mortar, soaring business rates, National Living Wage legislation and the collapse of the pound post-Brexit referendum are all contributory factors. However, it is the continuing increase in online shopping which is particularly worrying.
Writing for Business Insider UK in August 2017, Oscar Williams-Grut notes that the only Brits who are increasing their spending are those who are doing so online. As a nation, we spend more online than anyone else in the world, the equivalent to £4,611 per person per year. Furthermore, statistics from the ONS for 2017 show that online shopping in the UK increased by 15% year-on-year. So, how are shoppers to be encouraged out of their growing malaise and desire for spending from the comfort of their own home?
One option is to adopt the concession model that has been successfully used by department stores and luxury brands for decades. By balancing the prestige of mutual association with individual distinguished brand identification, retailers can take advantage of their partners’ attributes and popularity. The subsequent increased footfall to the businesses will then potentially attract more customers to all parties involved. By implementing this established retail structure, shopping becomes a more dynamic and convenient experience, which appeals to a different mind set in people. When skillfully executed, these shops-in-a-shop are no longer viewed as such but more as a leisure destination, the perfect positioning when competing in a tech-centric marketplace.
Then, there are the financial benefits to consider. In sharing shop space, businesses also share overheads, substantially reducing costs and increasing profit margins. Linking with the right partner can also boost sales, whilst simultaneously enhancing brand identity. This is illustrated by Tesco’s affiliation with Harris + Hoole. The small chain of artisan coffee shops is located in the larger Tesco stores in London and the South East. This has both expanded the customer base for the coffee house and reinforced Tesco’s aspirations to be seen as more than a middle range supermarket. Such was the success of this pairing that Harris + Hoole was acquired by Caffe Nero in 2016.
One crucial aspect that should not be overlooked is the logistical installation behind these joint ventures, and that is where we come in. As leading retail shopfitters, ASF understand the importance of having the optimum shop layout or restaurant floor plan. We design and construct high specification interior fit outs which accurately recreate the instantly recognisable style of the in-store concession and its associated shop layout, ensuring brand identity is not only maintained but reinforced. We also take into account the customer’s journey once in store, building a retail fit out that will guide them onto the path the retailer wants them to take.
Having already discussed the variable nature of consumer spending, the flexibility of this business model is another notable advantage to all partners embarking on such an enterprise. The adaptable framework of these types of store layout means that they can be easily reconfigured during a company’s tenancy or following its departure. The perfect fit for all.