The Economist in their June 18th edition has an article describing the changing face of retailing. Price Tags has been exploring the creation of the new Tsawwassen Mills, a mega mall which will also be a “fashion experience”. The mega mall announced they were hiring 1,000 employees in Business in Vancouver, with an expected 3,000 employees to be their full staff.
But something is happening on Britain’s commercial fashion streets that may impact the new Tsawwassen Mills mega mall, and other retailing as well. The example used is the Hard Rock Cafe-Britons like eating at the cafe, but patronage of the clothing side of the business has fallen off.
The Economist describes the retail market as “soggy”. Non-food sales and clothing sales been contracting. And remember the mention of Howard Schultz, the CEO of Starbucks making his coffee shops “experiences” that you will go to the mall for? Here is what the The Economist surmises:
One profound change is that consumers now want to spend their money on “experiences”, such as eating out, holidays, cinema or going to the gym, rather than products such as clothes or food—hence the differing fortunes of the restaurant and retail businesses at the Hard Rock Café. Figures show a strong rise in spending on recreation and culture in the first nine months of last year, compared, for instance, with the fall in spending on food and drink. ..Online shopping is also transforming the high street. Consumers, especially the young, now expect “omnichannel” retailing, to be able to switch seamlessly between purchasing on their laptops, on their mobiles and in bricks-and-mortar stores. Retailers that are slow to develop a good online offering will struggle, or worse.
So despite disposable household income rising, leisure time is not being spent shopping but rather shopping for items for a leisure experience elsewhere.
In terms of struggling grocery stores, Britain’s online grocery market is worth $12.2 billion USD and is growing. Online retailing looks like a disruptive technology for the typical bricks and mortar commercial stores. A British lobby group, Women in Retail have recently published research showing that even though 85 per cent of all retail purchases are made or influenced by women, only 20 per cent of the executive teams and only 10 per cent of executive boards are female. To adapt to a quickly changing retail market, retail boards must represent who their product purchasers are, and be more inclusive of women decision makers.
The implications of what is happening in Britain are serious for Metro Vancouver retailing. The British studies show that switching between on-line and in-store purchases is valued, and also illustrates how quickly the concept of commercial retailing is changing. The Starbucks “experience” may be the first morphing of the traditional storefront concept.