The Other Retail Group Named as Tandem’s New Business Partner
As consumer habits and life needs change through technology and the internet, the future role of town centres and retail parks needs positive actions to allow local communities to thrive.
The Other Retail Group are tackling market changes and new consumer behaviours, with the vision to help investors and local authorities create ‘future places.’
Their team includes highly qualified experts in retail and leisure, along with visionary architects and an experienced scheme development and management group. This combined skill set enables them to create a vision of the future, looking at the needs of communities, turning this in to new viable places.
We caught up with John Wood and Alastair Bell to discuss their thoughts on the changing face of retail.
How do you see retail changing over the next few years?
UK High Streets have too much retail space, retailers have realised they don’t need as many stores as they once did. Brands can survive with around 200 national stores now, rather than a store in every town/city in the country. These units that had originally been built to serve retailers, so what can they be used for now?
We are in a time where we have too much choice. Consumers have some many options on how and where they shop. Social impact is a much greater consideration, affecting our views on where and why we make our purchases. The culture of owning more making you look ‘better’ is fading, instead of excessive consumerism to show your wealth, being selective of the brand shows your social conscience. At a time where protecting the environment, cutting out plastic, reducing carbon footprint and eating less meat is high on the agenda, purchasing ethical and sustainable clothing is next on the list. Although the impacts of mass production of apparel aren’t as well known, it’s only a matter of time before governments step in and make changes to consumer goods manufacturing.
This is starting to make people think whether they need to keep buying more, or whether they shop for vintage clothes or recycle old ones because it’s the ‘right thing to do’. Brands aren’t necessarily doing anything wrong to result in spend and profits slowing down, but shoppers’ individual habits change rapidly. It’s inevitable that trends come and go, but the retailers that adapt their business model and offer a niche shopping experience or sustainable approach, will see greater returns than those who continue to aim for mass sales.
Can we adapt the changes happening to UK high-streets in to positive action?
Of course, we all still enjoy the experience of shopping, it’s a pleasant way to pass time, a social activity, as well as imperative to online sales. Brands have realised setting targets for individual stores isn’t the only way of measuring sales and profitability. Instead they can use stores as an advertising and promotion tool in what is still a competitive industry. Still less than 20% of all retail sales are made online, which means the high-street is still the favoured option. Brands who have an online only shop are considering bricks and mortar stores as well such as Amazon and Made.com, to offer an advantage over competitors and an experience to customers. People want to try on the expensive jumper before they buy it or test out just how comfy that new sofa would be before buying online.
We are now part of a much more experiential phase where we want to buy holidays, go to festivals and gigs, the theatre and other activities, rather than purchasing objects. Concept stores are becoming increasingly popular and a favoured way for brands to sell a lifestyle rather than just a product. These are often much more experiential and designed to make consumers feel a certain way about that brand, they are much more creative and unique than the typical retail store. But there does need to be a focus on how to adapt this experience to the high-street. Shopping centres should be leading the way by adapting vacant units, creating mixed use spaces and leisure opportunities, as well as turning space in to residential. Providing central location housing has many positive impacts, not only reducing travel and carbon emissions, but it provides easier accessibility for the elderly. Therefore by focussing on providing for the local community and using infrastructure improvements, this will refresh High Streets in areas that are in need of more than an upgrade.
Where do you see the most opportunity for the property asset manager?
The impact of change in the retail environment and space requirements together with a focus on leisure, experience and shorter lease lengths needs a fresh asset management approach. The investors still need to maintain and improve returns so this requires a far more hands on style and active operational management. It’s not simply collecting rent but running an asset as business that will deliver the added value. This could mean taking over the direct control and operation of vacant retail and leisure space, department stores and public realm to operate pop up and short-term market style spaces, food markets and creative spaces that act as a destination or anchor space to create the ‘buzz’ and bring visitors and shoppers. We are prepared to take on the direct operation of these spaces and run them as a business with a shared reward. This is a hands-on approach that shows we want to derive reward from innovation and real added value operational management.
We will be working in Partnership with The Other Retail Group on a number of retail and leisure opportunities. We are already collaborating on client business looking at the repositioning of major shopping centres, retail locations, town centre regeneration and market operations.