The livelihoods of 13,000 Arcadia staff, pension scheme members and 12,000 Debenhams staff have all been put at risk this week. But, sadly, it’s come as no surprise to many of them; Arcadia has reported declining revenues since the late noughties and Debenhams has been in administration since April.
And while we might get nostalgic for the days of Kate Moss-inspired ranges at Top Shop, it’s fair to say that Philip Green’s empire has failed to innovate for nearly a decade – whether in terms of fashion and creativity or in terms of online retail experience. While H&M and Zara have successfully “aged up” and Primark has undercut, the likes of Boohoo, Asos and PrettyLittleThing have delivered faster fashion from the comfort of your iPhone.
As the FT’s retail analyst Jonathan Eley puts it: “The result is too much space – by some estimates, an excess of 40% – chasing not enough sales.”
Can Christmas bring us back to our roots?
Like it or not, the way we live, move and shop has had to change. And as the nostalgic traditions of Christmas shopping beckon, we ask whether retailers need to commit to traditional spaces on the high street with historic roots, or whether they should free themselves up and become more rootless.
One huge issue is that consumer uncertainty still abounds. As Covid restrictions (not to mention the weather) continue to change, people aren’t sure whether they’re supposed to stay home or get out there and Shop For Britain. And if we do go, will we be encouraged to buy in bulk, shop considerately or refrain from so much as looking at a pair of socks in case they’ve been deemed “non-essential”?
Meanwhile, online sales are rocketing. The Royal Mail has already announced plans to start collecting parcels and mail from people’s homes. And this Christmas the firm anticipates a need to hire 33,000 seasonal workers (an increase of 66%) to cope with the surge in online shopping.
As transactions shift online, and footfall on the high street slows, it raises interesting questions about what shapes our perceptions of a retail brand.
For instance, does anyone care where you bought something any more? Especially now that the process of buying something is rarely public and, for today’s Zooming classes, using and consuming things is increasingly private.
What about the personal touch? Sitting on Santa’s knee is now a step too far for social distancing. And you could be forgiven for thinking that attentive service and a bit of “retail theatre” is practically redundant – particularly now that your postman or DPD driver are your only human link in the retail chain?
Are brand stories about heritage and local pride really relevant or even appropriate any longer, at a time when retailers are being forced to lay off staff and shutter storefronts?
These are some pretty fundamental questions and they’ve prompted us to consider whether retail brands can become more “rootless” and forget the physical altogether, or whether they still need to retain a sense of place and provenance as part of their identity.
Do people now prefer faceless over personal, convenient over convivial?
One brand that might suggest that only vegetables need roots is Amazon – a global online retailer that had its biggest online sales quarter ever in Q2, due to the pandemic.
Amazon has never mythologised its origins nor built its brand equity on a sense of humanity or personal authenticity. Indeed, the only human “personality” Amazon projects is through its AI assistant Alexa. Instead, Amazon’s customers value friction-free simplicity and speed of delivery. By delivering as much, Amazon has become the world’s most valuable brand (worth $416bn according to Kantar’s 2020 global BrandZ ranking – an increase of more than $100bn in one year).
So perhaps it’s time for all retailers to follow suit and “be more Amazon”, prioritising ease of use and reliability over any sense of character, depth or community commitment…
Or perhaps not.
Let’s not confuse panic buying with brand preference
Amazon’s positive spike in sales masks a lot of negative issues surrounding the brand. Indeed, as the pandemic hit, Amazon was overwhelmed with orders and deliveries were delayed. Negative customer reviews went up 50% and allegations of price gouging ensued: six-packs of Bounty paper towels going for nearly $60, and a tub of 75 Clorox wipes was offered for $40.
By contrast, some more established retail businesses fared surprisingly well – businesses, you might say, with deeper, stronger roots.
In the UK, Tesco was picked as the brand that has made the most positive contribution through its actions during the coronavirus pandemic.
Research from IAB UK and YouGov, which questioned 2,123 adults on their thoughts on brand behaviour and messaging during lockdown, found that 79% of participants were likely to favour brands that have behaved well during the pandemic. Tesco was spontaneously mentioned by 15% of respondents, Asda ranked as the nation’s second-most favoured brand, followed by fellow supermarkets Morrisons, Sainsbury’s and Aldi. (Amazon ranked seventh.)
At the beginning of lockdown (27 March), Tesco was one of the first brands to launch a campaign promoting its social-distancing measures. Its clear and frequent communication and early enforcing of safety measures were also cited as positive factors among participants.
By contrast, four-fifths of participants claimed they were less likely to buy from brands that were perceived to have behaved poorly during the pandemic.
Even big brands can benefit from hyperlocal commitment
In the US, the Centre for Retail Research has predicted that, “rapid online growth will continue for at least another eight to 10 years, thus eventually between one in 10 and one in five stores will no longer be needed”.
Smaller, nimble online retailers like Wayfair and Thrive Market have seen sales rise in line with this trend. And millions of “mom-and-pop” operations have been compelled to adopt new digital strategies.
But, as a piece in Forbes from October attests, there’s much that traditional “big box” retailers like Walmart and Target have done right this year, both as businesses and as good corporate citizens.
This is because big stores (long viewed as liabilities) have acted as hyperlocal distribution hubs, offering both in-person and digital shopping experiences.
According to Target chief executive Brian Cornell, “We are within 10 miles of most Americans.” This explains the near tripling of same-day delivery demand, as well as a 700% surge in its curb-side pick-up service.
Speaking to Forbes, Deutsche Bank retail analyst Paul Trussell said: “Target has become truly convenient. It’s taken years of investment, but now you can buy online, pick up in store or use their app to have someone put the product right in the trunk of your car.”
This has enabled the safety of millions of people, but crucially, it’s also beginning to address long-overlooked issues of worker satisfaction and pay (both historically very low amongst retail staff).
In the US, Target, Best Buy and Walmart have all accelerated plans to raise their minimum wage thresholds. Bonuses, paid sick days and stricter safety measures are also being reviewed across the board. And in many geographies, retail staff have been reclassified as key or essential workers, boosting their security and public respect.
It’s not how big the space is, it’s what you do with it
As we look forward to 2021, it’s sad (but safe) to predict more trauma for physical retailers and the loss of further big names. But as many innovative retail brands have shown, space isn’t a problem if you rethink the role it plays. That can mean shifting to mixed uses – for example, offering community spaces, play areas and exercise spaces. Or it can mean fundamentally rethinking physical spaces as part of the online purchase process, for example, turning stores into local pick-up points, drive throughs and digital browsing sites.
Indeed, the post-Covid high street will ultimately have to give more space to housing, leisure, health and wellbeing, not to mention hybrid working spaces. The only question is how quickly and creatively will retail brands choose to offer it, before someone else does?
David Stevens is senior strategy director at Wolff Olins
Photo: Debenhams in Edinburgh (Jeff J Mitchell/Getty)