Retailing as brand management - an example from Apple

Ira Stoll at Reason reports on a visit to an Apple store:

I was looking for a computer to replace the nine-year-old MacBook Pro on which I am writing this column. I was also considering getting a new phone and passing my three-year-old iPhone SE along to a family member.

I left without a new computer or a new phone, but with a valuable lesson—one that you wouldn't necessarily learn if you spent your time listening to the presidential candidates bashing technology companies. One of the best ways to succeed long-term in capitalism is by treating customers well rather than ripping them off.

I was eyeing one of the desktop computers with an integrated Apple screen, Apple keyboard, and Apple mouse that would have cost more than $1,000 altogether. But the employee at the Apple store advised me I'd be better off just getting a cheaper "Mac mini" and buying the mouse, monitor, and keyboard somewhere else. On the phone question, he said I should go to a Verizon store—it had better deals.

Stoll positions this response as a customer service policy for retail and maybe he's right. I suspect, however, this is part of a larger trend for big consumer brands - using the retail environment as a brand management tool. Apple's high street presence seems to serve two purposes - a place where current Apple customers can get support and a place where people (who may or may not be Apple customers) can browse the company's products with trained people to explain what all the complicated stuff does. Selling you a phone, computer or accessory is pretty much secondary to the positive impact on brand image.

I recall a similar visit to a Bose store in Liverpool. We were looking for a good wireless speaker system (it's sitting next to me as I write this) and had a long chat with the young woman serving us. They didn't have the model we wanted in store but they could get it and have it delivered, "or you might get it on Amazon or a good electronics store". This led to a conversation about how she was paid - "aren't you guys on commission?". The answer was "no", they're salaried - the company had stores primarily to promote the brand rather than as a sales outlet.

In elite retail environments - large city centres, up-market malls and some smaller high streets - this sort of retailing is becoming more evident. From Aaron Renn reporting on the mustard shop in New York's Upper East Side through to the spectacular Johnny Walker House in Shanghai we're seeing the rise of retail as brand management. This development reflects the declining effectiveness of advertising in a world of subscription TV, ad blockers and online news - large advertising budgets are being redirected into paying shop rents rather than for minutes on TV or pages in magazines. Sales don't matter next to footfall and the same principles (how many and what profile) apply to shop rental decisions as applied to TV or newspaper ad choices Whether this is a good or bad thing for the high street is moot - it maybe sustains high rents where otherwise demand would push those rents down (Renn points out that Starbucks couldn't afford the rent round the corner from that mustard shop) but perhaps acts also to push out traditional retailers from up-market environments.

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When you buy from a big business...

Let's consider this message. Its sentiment is lovely, it speaks of the effort the small business makes to succeed, of the hours of struggle, the nights wading through paperwork, the early mornings racing to collect stock and still get back to open the shop. We've all got a great regard for the shopkeeper, their work (as Napoleon knew) is deep in the English psyche.

But the words on the board are still wrong. Not because there isn't some distant chief executive wanting a second yacht but because when you shop in a big store you're helping to pay the wages of the woman on the checkout, the lad stacking shelves, the folk in the back doing the banking, the warehouse staff, the drivers, the trolley boys and the smiling ladies in the cafe. And those people have daughters who want dance lessons and sons who want a football shirt. These employees of the big shop have school uniforms to pay for, mortgages, gas bills, bus fares and loan repayments.

The portion of your shopping bill that goes to pay the chief executive is tiny - in the case of big bad Tesco it's less than 0.001% of the company's turnover. And the proportion of each pound of sales going in profits is also pretty small - less than 5% even in good years. Most of the mark up goes on paying the wages of ordinary employees who have exactly the same struggles paying their way as do the owners of those lovely local shops.

Don't stop shopping in those indie stores but do so for the right reasons - great service, interesting products, high quality and good value. Don't shop there because you think you're sticking one to some bloated plutocrat because you're not.

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How to save the high street - don't employ anybody

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So it seems:

Customers simply use their cellphones to unlock the door with a swipe of the finger and scan their purchases. All they need to do is to register for the service and download an app. They get charged for their purchases in a monthly invoice.

The shop has basics like milk, bread, sugar, canned food, diapers and other products that you expect to find in a small convenience store. It doesn't have tobacco or medical drugs because of the risk of theft. Alcohol cannot be sold in convenience stores in Sweden.

"My ambition is to spread this idea to other villages and small towns," said Ilijason. "It is incredible that no one has thought of his before."

He hopes the savings of having no staff will help bring back small stores to the countryside. In recent decades, such stores have been replaced by bigger supermarkets often many miles (kilometers) away.

Of course nothing is quite as simple as this - the shelves still have to be stocked and someone has to manage that stock, deliver that stock and handle customers. But the principle - that the simple process of buying a loaf of bread and some cheese can be entirely dehumanised - still stands and means that the advantage supermarkets have over local stores is diminished.

However, it does seem to me that the big losers in this battle (perhaps not in Sweden though) aren't the big hypermarkets with 100,000 lines and sophisticated delivery systems but rather the expanding market of small convenience stores run by those same stores. I suspect that, while this system will challenge 24-hour opening, the market for crisps and baby food at three in the morning is pretty limited.

Interesting stuff though.

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Hurrah! The High Street is saved! The man from Savills says so!

The man at Savill's who sells retail property thinks the high street is fine:

There is now a clear consensus that the rise of online retail is not killing the UK high street. In fact, in some cases, the internet is helping to promote the need for retail space as the boundaries between online and bricks and mortar become increasingly blurred.

Now the blog in question is pretty dreadful. It presents some half-baked statistics, carefully selected to suggest that all is just hunky-dory on the High Street. Stuff about the growth in click-and-collect (think about this - why should I go five miles to the high street to collect when there's a convenient shop on the corner) and something called 'O2O' - 'online-to-offline'.

This is, at best, wishful thinking and at worst actively misleading. I don't know which because Sean Gillies, the man from Savills in question, doesn't provide us with any evidence. I mean real evidence about rents, voids and vacancies not vague statements like:

It has also been reported that some retailers have found that opening a new store has resulted in an increase in online sales

Reported where? By whom? And on the basis of what evidence? Not this evidence I guess:

Without doubt this is due to both the challenge of the internet and the convenience of out-of-town locations for click-and-collect as they offer plentiful, accessible parking that is free of charge. Despite this, it is good news that the vacancy rate has increased only slightly, to 10.4 per cent; although the number of retail leases that are due to expire over this year suggests that this could rise further over the coming months - particularly as consumers are now demanding discounts, which squeeze margins and adversely impact profitability and long term business sustainability.

Now it's true that retail space in the better high streets now appeals to the growing market for the shop as a brand marketing tool but this does little or nothing for less appealing locations lacking in the right demographic.

I know Savills have shops to rent but when their head of retail pushes a retail recovery on such flimsy evidence we really should question the credence given to its opinion.

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Offering folk stuff to buy isn't enough for a place to work - you have to entertain them too!

Retailing as entertainment

The long-term transformative effects of ICT cannot yet be fully appraised in part because technology uptake is rapid and unpredictable. Nevertheless, in one aspect – urban design – a synergy has emerged between bricks-and-mortar merchants and planners, in reaction to virtualization. Their complementary efforts, when successful, imbue commercial space with interaction-based vitality. The human instinct for sociability further supports these efforts, evidence that there is no substitute for many of the benefits cities offer. Lives are arguably better in proximity, a point supported by decades of agglomeration and anthropological research. The challenge for planners, therefore, is to create space for meaningful experiences inimitable in the virtual realm.

OK it's a little bit wordy (as we'd expect from an American academic) but the point being made is central to the business of regeneration and the future direction of 'place-making'. The critical issue is that the 'field of dreams' approach that tended to dominate town centre development no longer applies - just because I build a shopping centre doesn't guarantee that people will flock to its hallowed halls. If all I offer is stuff to buy, the consumer has the choice of sitting on her step with a smartphone flipping through a vaster and more exciting range of stuff to buy.

Pay a visit to a recently developed shopping mall - say the Trinity in Leeds, for example - and check out the shopping. Isn't the most striking thing just how little of this there actually is in the new mall? There are dozens of places to eat and drink, there's a cinema, and there are shops - run by brands like Apple, Bose and Superdry - that are as much as branding and market positioning as they are about actually selling you stuff. We were in the Bose shop getting a demonstration of their TV (unsurprisingly the sound quality was beyond awesome although this didn't make up for its lack of smartness) and, in chatting to the sales assistant, we discovered that she wasn't incentivised to sell us stuff. No commission, no sales bonus - because the shop was there to promote and position the Bose brand.

If we want places to succeed then there has to be a reason for people to visit them - if what they offer can be perfectly replicated on-line (or, in some cases, imperfectly) then the chances are that people will access the offer through the web rather than by visiting some place. What places need to do is threefold.

1. Offer those things - chiefly around 'human sociability' - that can't be done on-line (even if they can). 'Live' music is only really live music if you're there - yes someone could stream it live to the smart TV in your lounge but is that the same? I would argue it isn't - we want the live because of the whole experience, the beer, the slight crush of the crowded venue, the sense of sharing a great experience with others. The ability to say 'I was there'. Just having a bar or foodstop isn't good enough - it needs a purpose beyond that mundane fact, a presence that can't be replicated with a bottle of wine from the supermarket and some home cooking.

2. Connect with the on-line world. We went to the Prado in Madrid and, unplanned, bought an offer to guide us round from a smartly dressed gentleman. He showed us 10 - just ten - pictures from the thousands in the gallery. And these pictures taking us from the middle ages to the 21st century told us a story of art down those ages. We could have hired one of those clunky electronic gadgets as a guide but wouldn't it be more interesting if a little smartphone app could replicate the sort of offer that gentleman made for us?

3. Focus on the occasion, the event and the demonstration rather than just the sale. It's true that the value of the place comes in part from the value that consumers invest in that place - and much of this is, inevitably, a cash value. But, as Apple, Bose and many other brands have shown, the value of a public presence needn't be about selling you some stuff. Rather it's about showing you what that stuff can do, reminding you that the stuff in question is popular (why else would there be a big shop fill with other people looking at that stuff), and reinforcing your decision to buy it.

I'm quite excited about the future for town centres, malls and other shared places. Partly this is because the domination of public space by retail is nearing its end but mostly it's because the evidence right now is that successful places are places where the special stuff - the things that make them work - are made by the people visiting rather than for the people visiting. A new generation of entrepreneurs are creating new approaches to public fun and games - from political debates in a pub to cheese tasting and street parties.

And where there are lots of people having a good time there's the opportunity to enhance that good time by selling them the stuff they want (even if they didn't know they wanted it until just a minute of so ago). For public authorities there's a difficulty because of an instinctive discomfort with things that disrupt existing markets and existing expectations. Excuses will be used to prevent or slow the initiative of these new ideas - the street vendor or market stall undercuts the shopkeeper, selling alcohol in the street encourages anti-social behaviour and your funky flea market needs a "markets licence" for some bizarre reason.

What we know is that many of the best examples of this new place-making reflect this development. I prefer to call this consumer-led but, if you're uncomfortable with the idea of being a consumer, citizen-led works just as well:

Authentic urban transformation relies more on citizen initiative than the influence of global capital, and may be facilitated by ICT but not defined by it; this can be seen in the quiet regeneration of urban neighborhoods. Global capital may underwrite loans for acquiring properties and developing land, decisions in such neighborhoods are often made locally and in the type of fragmented manner that generates a bricolage of uses and styles. Examples in the United States include East Nashville, Kansas City’s Crossroads district, and Oakland’s foodie Temescal and KoNo districts. None displays the architectural shock-and-awe of emerging global mega-cities, but each embodies a citizen-level developmental determinism that shapes their design and atmosphere. They are literal incarnations of the unique priorities of citizens at that time and place, independent of global trends that often result in regression to an aesthetic mean.

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Pointless tears for a lost high street

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Professor Sparks laments the emotional void left by the loss of Woolworths. He makes an important point, putting his finger on the way some retailers can create a sense of attachment that’s more sentimental than economic. But of course sentiment doesn’t pay the bills.

Do you feel an emotional void as a result of Woolworths closing? If you do then your levels of emotional sensitivity are far more developed than those of normal people. Now I understand how marketing and advertising - the presence of a brand over the years - can create attachment. Indeed, as a professional marketer I can respond with a smile of quiet satisfaction at the way in which branding sustained Woolworths as a business long beyond the point where it lost its way as a retailer. But emotion at the demise of a shop few of us visited more than a couple of times a year?

Let's weep for the high street, let's mourn the loss of those shops we cherished in our now forgotten youth. We should wipe away a tear knowing that the greengrocer who always called you "John" has gone, that there are so few bakers and that the comfortable retail brands of yesteryear are now just memories.

We should post pictures of our towns in those glory days when we had, we're told, some 'attachment' to the high street. And have long conversations while hunched over these snaps, remembering past ages and regretting the loss of these past institutions.

Show that emotion, call down a curse on the shops that have filled the void left by those old shops. The second hand shops, dens of evil gambling and places where all that's for sale is the false hope of an easy (but expensive loan) - cry out about:

...predators in Food Bank Britain, leeching on a society that struggles to make ends meet and ensuring their users pay over the odds to survive.

But let's not see that remembered past as a guide to some golden future for the high street, let's not pretend that emotion can ever substitute hard reality. Not the reality of poverty - there is less poverty today than there was when those black and white photographs were taken, when people trudged in worn out shoes, back aching to the high street to haggle and hassle for the things a family needed to survive. No it is the reality that our wealth has brought choice, mobility, opportunity and, in doing so, has left those retailers behind. All the tears of happy memory will not change this fact.

Yet people like Julian Dobson persist in painting this myth:

This is why the future of such high streets lies in a very different approach to prosperity. Instead of desperately competing for the spending from enclaves of affluence, high streets need to return economic value to local entrepreneurs and shoppers. This demands access to property at low rent and with business rates set at intelligent levels; it requires active encouragement of local enterprise by councils and chambers of commerce; and it requires community-based networks of trade and exchange that rebuild local loyalty.

Don't get me wrong, I'm with Julian on the tax thing - all taxes do is make business harder. But the pretence that somehow affluence is fading from places like Rochdale, that poverty and the food bank is somehow the norm of living in these northern towns is a distorted, even insulting, picture.

However, the shoppers in Rochdale, in Littleborough and in Middleton, they're on the tram into Manchester or fighting the traffic round the M60 to the Trafford Centre. Or indeed, and this is ever more the case, sat in their onesie on the sofa, smartphone or iPad in hand buying stuff on-line.

There is a future for the high street, not as a dystopic place filled with betting shops and fried chicken takeaways but as a place for leisure and pleasure. This isn't about some form of local protectionism, an impost on prices that further excludes the poorest, but about getting the scale right and the place right. Above all it means fewer shops.

So wipe away the tears, they serve no purpose beyond the memory that invokes them. Instead recognise the reality of 21st century retailing - on-line provides a scale of choice never before available to the consumer. It drives down prices and brings the world's goods to our sofa. Just as there were once 50 shops in Cullingworth (there are now fewer than 15 and four of these are hairdressers), there will be no future need to struggle with heavy bags to that high street of people's memories to face less choice and higher prices than we get either on-line or in the supermarket.

These tears for a lost high street are pointless.

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Integration and the shop as brand marketing....more thoughts on the High Street

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When I came to Bradford, I came as an account executive at a direct marketing agency. And, back then, direct marketing was flavour of the season. The advent of databases, the collection, manipulation and analysis of information, and the idea that we could tailor our offer or appeal to the target consumer - these things made us the scientists of marketing set against the flash, braces-wearing 'above-the-line' folk making those useless TV adverts.

But direct marketing seemed a stale term, more akin to door-to-door selling than to the white heat of information technology. With all our profiling, multiple regression, expert systems and data-mining we rebadged the business - firstly as database marketing, then as relationship marketing - before realising that the unreliable, untargeted advertising was still there, our clients were still spending more on this than on letters and leaflets.

So integrated marketing was invented. Or rather it wasn't, we simply realised that the different bits of marketing activity needed to work together if the campaigns were to succeed. Our clients needed brand marketing as well as targeted marketing.

What's all this got to do with the high street, I hear you cry? Put simply bricks and mortar based retailing has to make use of on-line promotion and sales - we know this and every retail strategist worth his salt is focused on making this transition. But what we haven't appreciated is that this isn't a shift from real to virtual with the high street vanishing but the integration of different channels and their use for marketing as well as selling.

Here's Adam Stewart, marketing director at Rakuten’s Play.com:

“Our view from the marketplace is that there is going to be a form of humanity, and consumers are still going to be interacting with the high street,” he said, explaining that consumers will always prefer to look and feel products and connect with retailers on a face-to-face basis. “What Rakuten’s Play.com is trying to do is be able to offer the services so that high street retailers can have the services without the massive costs and infrastructure to build a digital proposition within a marketplace. So our position is very much not about Cannibalisation, but more about working together with the high street and being able to offer a digital proposition that works in collaboration with a tangible, physical, high street environment.”

All a bit wordy but, in essence, what Stewart is saying is that the virtual retail world needs the high street environment because customers crave tangibility. The problem is that those tangible retailers will struggle to succeed alone - the store becomes as much about brand development and promotion as it is a sales channel.

This can take the form of the spectacular - here's the Johnny Walker House in Beijing:

Diageo describe this as:

...the Johnnie Walker House serves to meet consumer demand for luxury with substance. Blending a bar, museum, retail outlet and an exclusive members club, the Johnnie Walker House Beijing is a response to the demand from Chinese consumers for in-depth knowledge, not only of the specific luxury brands they indulge in, but also of the broader categories the brands fall under.

If you want the more mundane you can check out Disney's presence in Walmart - for sure this makes sales but it's just as much about maintaining the ubiquity of Disney as a brand. Plus of course there's the wonder that is the Apple store - again there's no obvious need for a high technology brand to have a high street presence but the stores provide a strong brand impression in the real world (as well as flogging the odd iPad). When the new product launch comes along and all the fans want one it's better marketing to have all those fans queueing in the town centre than to have them invisibly poised over the 'enter' key on their laptop.

Just as importantly - and this matters in thinking about our centres - the customers that the brand owner wants in his store aren't simply any old customer who wanders by - here's Stewart again talking about retail banking:

 “A very good, corporate, customer, with a high lifetime, probably wants to go in to see a bank manager, and banks need to be able to facilitate that conversation and offer a good service,” Stewart explains. “But a customer who is churning on zero per cent credit cards, banks want them to interact digitally."

Just as Diageo wants high net worth customers in the Johnny Walker House, the future high street success wants high spending, high end customers - the every day buyer can shop from his computer and have it delivered or collect from the Post Office. In town retailing becomes an event, an orchestrated, animated marketing promotion. The customers walking into you shop are there because you've invited them - to a product launch, an anniversary, a preview. They're dressed up to party not slouching round the shops in jeans and an old t-shirt.

Inside you'll get them to engage on-line even more - to like the Facebook page, to follow on Twitter, to join an on-line club for the best customers. And they'll go away and become your best sales people - bragging and preening about the brand urging their friends to get involved.

This integration will be - for retailers - the essence of success. Without a strong on-line presence the retailer cannot compete once over a third, perhaps half, of retail sales are virtual. But that isn't enough - the best retailers will see the shop as one of their essential marketing tools, as a place of rewards, celebration and excitement. As the thing that captures the idea of that brand as fun - as leisure and pleasure.
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“Our view from the marketplace is that there is going to be a form of humanity, and consumers are still going to be interacting with the high street,” he said, explaining that consumers will always prefer to look and feel products and connect with retailers on a face-to-face basis. “What Rakuten’s Play.com is trying to do is be able to offer the services so that high street retailers can have the services without the massive costs and infrastructure to build a digital proposition within a marketplace. So our position is very much not about Cannibalisation, but more about working together with the high street and being able to offer a digital proposition that works in collaboration with a tangible, physical, high street environment.”
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99

Adam Stewart, marketing director at Rakuten’s Play.com
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99

Adam Stewart, marketing director at Rakuten’s Play.com
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99

Adam Stewart, marketing director at Rakuten’s Play.com
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99

Adam Stewart, marketing director at Rakuten’s Play.com
Read more at http://www.thedrum.com/news/2013/07/22/true-value-customer-rakutens-playcom-marketing-director-why-understanding-customer#A2BGjJzbeSo66TWI.99

Leisure and pleasure not tax and regulation - how to transform the high street

 

Next week Bradford will be debating a motion calling for a levy on 'large retailers' the revenue from which would be used by the council to do wonderful things so as to sustain high streets and town centres. It all seems very good:

That the Secretary of State gives Local Authorities the power to introduce a local levy of 8.5% of the rate on large retail outlets in their area with a rateable annual value not less that £500,000, and requires that the revenue from this levy be retained by the Local Authority in order to be used to improve local communities in their areas by promoting local economic activity, local services and facilities, social and community wellbeing and environmental protection.

But the truth is that this proposal represents - in terms of regeneration - a dead end. Not only does it make an arbitrary distinction in terms of business, essentially "big shop bad, little shop good" but it completely misses the reasons why, firstly, shops out of town are popular and secondly what drives change in high streets at the minute.

If we are to 'rescue' - or is the right word actually 'transform' - our high streets, we aren't going to do it through levies, taxes and regulations, through the use of governmental main force to order the way in which we shop. If we want great centres and high streets, we should start by looking at the ones that work and with asking why this is the case.

Above all though we need to stop thinking in terms of high streets as merely places where we shop. Two American academics (one an actual shop owner), Susie Pryor and Sanford Grossbart wrote about the 'ethnography of an American Main Street':

Other consumers and retailers describe social activities on Main Street, which they associate with a variety of experiences, including dining; window shopping; strolling for relaxation; jogging for health reasons; pub crawls; wine tastings; book clubs; language clubs; craft guilds; charity events; art events; parades; demonstrations; mass celebrations following major sports victories; and meeting friends. Many informants also refer to social interactions between and among retailers and consumers.

We recognise this description but miss out on the fact that all this meeting, playing, talking and enjoying takes place somewhere other than in a shop. We treasure these places because they are places of leisure and pleasure but just as importantly we are actors in the production of that pleasure. For sure, we want the meal in the restaurant to be tasty and the service to be smiling and easy but the real pleasure of the meal is in the company, the buzz and the interaction with our friends.

And we also know that such pleasure - the crowds, the buzz, the interaction - doesn't have to be in the high street. Julian Dobson writes about a London canal and concludes:

It’s easy on the eye, even if you wouldn’t want to investigate the canal bottom or some of the shrubbery too closely. It’s a place for wildlife. Sometimes it’s cultivated, with little gardens and pocket parks punctuating the path. The contrast with City Road couldn’t be greater.

The Regent’s Canal is a high street because it attracts people in the way that a good high street attracts people, whether it’s full of bars, shops or public buildings. It works because it’s a stage, a promenade and a garden. If we want our traditional high streets to have a future, that’s what they need to be too.

Despite these observations - academic and journalistic - public authorities remain wedded to direction, to tax and regulation rather than to creating the spaces that work. These won't all be havens of peaceful pleasure like the Regent's Canal - that's not everyone's leisure and pleasure - but they will be filled with people enjoying themselves, celebrating life and consuming the bounteous wonders that the world contains for our pleasure.

If there were no shops in the high street but it was filled with happy, smiling people out enjoying themselves would that not be a success? I think so.

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Punishing shopping centres won't save the high street

Skipton Market - my kind of shopping but not to everyone's taste

I like Julian Dobson’s stuff; he talks sense about the challenges facing town centres (although his prescriptions and solutions seek to put a finger in the dyke of consumer behaviour rather than try to direct its flow). But sometimes his heart is too firmly on his sleeve and he loses the grip on common sense.

So it is with his reaction to the claim from the British Council of Shopping Centre that their collections of emporia are at “the heart of the community”. Rather than considering that this signals worry rather than arrogance, Julian launches into his “I hate shopping centres” mode and proposes a nonsensical set of ideas for those shopping centres to “prove” their central location in “the community”.

Let’s look at them:

“...every shopping centre operator should sign a public Community Reinvestment Pledge...”

Why just the shopping centre Julian? Why not the artisan baker, the trendy clothes boutique and the ‘independent’ coffee shop? How are they any different and shouldn’t they be making this same pledge? Truth is, of course, it’s just another cost to the business – means higher rents and these mean higher prices. But I guess Julian doesn’t about that as he’s not on a budget.

“...ask their tenants to pay staff a living wage: one that gives people enough to live on, not a minimum wage.”

Sounds great doesn’t it! And the same applies – those retailers not in the shopping centre should also pledge to pay a living wage surely? Again though – although doubtless Julian will be swiftly on with talking nonsense about the regional multiplier – the main effect is to increase costs (wages are one of the two big retail costs and the other, rent has been put up by the “Community Reinvestment Pledge”). And higher costs mean higher prices. Great idea!

“...they should dedicate a portion of every centre to community or civic space.”

Another impost that means higher rents – it all sounds great but why should a commercial venture do this? Out in Julian’s beloved high street, they aren’t clambering all over each other to give away space to ‘community or civic’ uses. They’re quite rightly looking for paying tenants and, if the Council wants a library or the community group a meeting space they can pay the rent just like everyone else does.

Right now it’s a pretty tough time for high street retailers – the country’s economic problems and the rapid growth in e-commerce and m-commerce make it ever more difficult for traditional retail models to succeed. Dreaming up passive aggressive pseudo taxes for shopping centres – punishing them for being “bad” – is a recipe for more closures, more job losses, more business failure and more empty parades with the occasional crisp packet or flyer doing a passable impression of tumbleweed.

What annoys me most about this anti-retail (or rather anti-certain kinds of retail that we disapprove of for no obvious reason other than that they are national businesses) approach is that it will do nothing to change the decline of high streets or the loss of independent shops. There is a rather patronising, middle-class, guardian-reading pomposity about the “save the high street” rhetoric. It reminds me of folk who criticise McDonalds while tucking into their £20 of hand-formed, lamb burger in some trendy gastropub. It’s not the bad diet but a sniffy, “that’s a bit common” attitude – and hating shopping malls is much the same.

I don’t like those malls but that’s my preference so I seek out other places. Yet millions of people do like shopping malls, visit them often and get real pleasure from shopping in those dreadful national chains. I know this because that’s precisely what millions of people do every weekend. Who am I – or Julian – to criticise that choice, to say that our preference for trendy shops in windy alleys is better that shiny shops in glittering malls?
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Tesco's strategy, town centres and the future of the 'high street'

Tesco have announced a significant shift in their development strategy:

After two decades of aggressively buying up land and building stores, the company is understood to be keen to scale back on opening new, large, out-of-town hypermarkets in favour of using the capital to invest in its existing store portfolio and expand its Express network of convenience shops.

It also wants to grow its click-and-collect service, which allows shoppers on the Tesco website to pick up goods, especially non-food items, from their local supermarket. At the last count just 500 of its 2,800 shops were able to offer the service.

Some observers see this as something of a response by Tesco to the fact that their seeming quest for world domination has faltered a little in the last year or so:

The move by Tesco to concentrate on its smaller shops follows its disastrous profit warning that it issued in January, the first in more than 20 years, and which wiped £5bn off its share price.

I’m not so sure – indeed businesses like Tesco have a much longer time horizon than the headlines in the FT or the short-term response of the markets. What the firm is doing is shifting its emphasis away from huge out-of-town emporia, from grand hypermarkets selling everything a shopper could possibly want under one roof, to a strategy founded on the fact that everything the shopper could possibly want is there on the internet.

And what shoppers seem to like is the idea that there’s a convenient spot nearby where they can pick stuff up from. For some, that convenient spot is the front door step but for many the ‘click-and-collect’ idea works pretty well and is rather better than the ‘drive-five-miles-park-push-a-trolley-round-a-store-queue-at-a-checkout-load-car-drive-five-miles’ approach.

In business terms the supermarkets have to switch to on-line selection and shopping because that’s what customers want. And this means that the focus will shift to smaller, local convenience stores as well – great news for secondary retail locations but more bad news for the high street.

Over the short-term, this leaves the supermarkets with a headache:

Analysts, however, warned that though Tesco should initially save money by scaling back its investment in large stores, it would have a long-term problem on its hands.

Jonathan Pritchard, analyst at Oriel Securities, said: "What are they going to do with all that land? Some of it can be reverted to residential property, but it has more than £1bn-worth of property in its landbank."

Worse still, supermarkets stopping building huge hypermarkets is pretty bad news for the regeneration industry – just think how many grand schemes are predicated on the willingness of those supermarket businesses to stump up enormous off-site or mixed use investments just to get the hyper-store permission.

It seems to me that the rate of change in retail is increasing and, as the economy clambers out from the basement, we will not see the recovery in the high street that people seem to expect. The ubiquity of the smart phone and the convergence of the TV and computer will mean that only those who choose not to have access to on-line shopping won’t have access.

We need therefore to think more urgently about the “high street”, about our town centres. And to do something other than call for more “powers” or new rules – although this appears to have escaped the LGA:

Town halls in England and Wales have called for more powers to tackle High Street takeaways, strip-clubs and bookies, which they say could damage local economies.

The problem is that, right now, these are the only businesses that are prepared to take those shops – the alternative is an empty shop that generates zero footfall. And one guesses that the takeaways, strip clubs and bookies (it used to be building societies, then it was charity shops, followed by pound shops – the chain of high street opprobrium continues) do actually generate some custom or else they wouldn’t be there would they?

The problem of the high street isn’t a problem of planning, it is a consequence of changed consumer behaviour. Since we can’t change consumer behaviour, we have to find a new role for the town centre – probably a smaller high street with fewer shops. A place – I’ve said this before – focused on leisure and pleasure.

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Why retail isn't the future of town centres...

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For the past several years I've been banging on about what I call "leisure and pleasure" as the future of town centres rather than shops and offices. It is absolutely the case that retail does not represent either a solution or a future for town centres - this is nothing to do with the evil supermarket or insufficiently tough planning restrictions. It is about how our shopping habits are changing with the result being:

*£6bn – Online spending in the UK in 2004
*£23bn – Online spending in the UK 2010
*£1.3 bn – Level of m-commerce in the UK 2011
*£19bn – predicted level of m-commerce in 2019
*15,000 – reduction in town centre stores between 2000-2009
* 6.5% fall in number of town centre shops by 2014

We really do need to rethink town centres - to consider how they entertain us, how they provide space for formal and informal events, for celebration and for fun. Yet everywhere - and my city of Bradford is no different - local councils, planners and developers are attached limpet-like to big retail developments as some sort of salvation for struggling centres. When will it dawn on them that they're wrong?

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Things that shouldn't surprise us...

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From Planning Magazine:

More than one in ten town centre shops were vacant in May, according to a survey published by membership body the British Retail Consortium (BRC).

OK there's a recession on and that has accelerated the problem but the real issues are:

Sales through town centres grew by just 0.2% in 2010, underperforming out-of-town and non-store retail, which both achieved significant uplifts.

While out-of-town increased by 1.6%, non-store sales achieved exceptional growth, up by 10.4%. Town centre is less convenient and more exposed to discretionary sectors.

You see that? Town centres as locations for comparison retail - other than a limited number of regional centres - are finished. And as Datamonitor point out in their 2011 review of town centre retail (from which the above statisitcs come):

The role of the town centre is set to change, moving away from a predominantly retail channel to a more leisure-based centre. Coffee houses and restaurants are taking up a greater proportion of space in the town centre as they have the resources to continue growing.

And the answer doesn't lie in aggressive and restricting planning rules - try applying them to on-line and mail order retailing! Watch as the planners drive all those warehousing and distribution jobs to somewhere else in the world - somewhere with planners that believe in promoting development and creating jobs.

Yet that's what  the Labour Party want us to do! And the RTPI - the planners union - they don't even mention "non-store sales" in their programme for a conference on town centres and retail and barely mention leisure and pleasure either!

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Why Labour is wrong (apart from on VAT) about 'saving the high street'

The Labour Party is setting out to “Save our High Street”. And it has a four-point plan to do so. Now one of the points – cutting VAT would make a difference (nothing like a price cut to stimulate spending). The rest are eyewash, anti-competitive or downright stupid.

Introduce a retail diversity planning clause, putting communities in charge of the future of their local high streets. Local people and local retailers would have a say on any retail plans for their area, giving them the power to put the heart back into the high street.

This is about stopping the further development of those dreadful supermarkets (although Labour should bear in mind that, for most supermarket developments, public opinion is pretty evenly split). However, it also hands to businesses the opportunity to prevent competition. This rather reminds me of the retired shopkeeper who once told me that “they shouldn’t allow” two shops selling a similar range in a high street. And it certainly reminds me of the way in which the National Market Traders Federation has browbeaten markets operators to do just that.

Create a ‘competition test’ in the planning system, leading to greater choice and lower prices for shoppers. The test would ensure a level playing field between small and large shops.

No I haven’t any idea what this means – except that it doesn’t seem to mean more competition or for competition to be effective. Translated it appears to mean – again – saying no to supermarkets. Now this might be a good thing – I have some sympathy with those who dislike supermarkets – but it will not lead to “greater choice and lower prices for shoppers”.

The problem with these proposals is that they are – as is too often the case – intended more to get the right headline than to look at what might be done to “save” the high street. There is no analysis, no appraisal of the retail markets just banal (and dangerous – putting retailers ‘in charge’ of retail planning, that’s a great idea) comments.

The problem with ‘our’ high streets is that:

1. People like to take their car to go shopping – it’s convenient with those heavy bags – and town centres have hard to access parking that costs too much.  Out-of-town retailing has ample, surface car parking that’s usually free. Unless Labour are planning to ban cars (or maybe just car parking) this will not change – people will continue to prefer out-of-town to the high street
2. Even lazier folk have discovered the Internet and on-line shopping! Without leaving the cosy comfort of my house I can purchase – and have delivered to my door – all the good things I want.  Good things that, in times past, I had to go to the high street to buy. Whatever you do with the planning system – short of banning home delivery or shutting of the Internet – the growth in on-line retail isn’t going to stop

 It really is as simple as this – yet Councils and their planners continue to make it ever harder for people to get their cars into town centres. And this means those people choose differently – they don’t do what the planners want and hop on the bus, they take the car to Bluewater, Lakeside, Trafford Park or Meadowhall.

If you want to ‘save the high street’, you have to start with what it’s for – is it the place we go for everyday shopping or is it a destination for leisure and pleasure? It seems to me that the days of the high street as a place for convenience shopping were numbers when, in 1968, planners in Sussex allowed Tesco to build their first out-of-town supermarket in Crawley. And once the principle was established in one place, for one set of goods the genie was out and away – out-of-town shopping had won. We should accept this reality.

But surely town centres will be kept going by all those workers who trail in and out of town every day? Partly, yes but only partly - next time you’re on the edge of town look at the tenants moving onto business parks. Where once there were just low added value operations – call centres, back office paperwork farms and warehousing – now we see front of house functions, lawyers, accountants and others who once dominated the commercial sector in town. The convenience of free parking combined with lower rents (and other benefits such as staff safety) sees business moving out from town centres into these out-of-town locations.

So what to do with the town centre? The answer lies with leisure – with the fact that we need a location to play out our celebrations, that we like to wander and admire nice buildings, that we enjoy culture – theatre, galleries, museums, and that we enjoy down time in a pleasant place. When Will Alsop published his Bradford masterplan with its park, with a lake and with an anti-development theme, people scoffed, called it madness. And tried then to turn it into a traditional, development-led masterplan founded on property values.

Looking back, I have come to the view that Alsop was right – Bradford needed less development to make it succeed not more development. We did need to clear out the horrible 1960s buildings that stood in homage to the failures of the City’s past dreams. We did need a park – including, if you will, a great lake. What we didn’t need was a soul-less commercial approach to the problem. We needed to make Bradford a destination.

And that is what we should be doing with town centres – giving people a good reason to go there rather than trying to stop us having the convenience of shopping out-of-town. The Labour proposals are pretty thin – rather than creating places people want to visit, they want to prevent development, stifle change and reduce competition. All for the sake of a cheap and easy headline.

Our high streets deserve better than this, they deserve some real thought based on a fuller understand of the social changes that drive the decline of in-town retailing rather than the sad, sourness of “we hate supermarkets”.

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