Why big retailers should think small
There is a crisis on our high street.
M&S are closing stores.
House of Fraser is closing half of its stores.
Poundworld, Carpetright, Prezzo, Jamie Oliver, Mothercare among others are reported to be struggling.
They join the likes of Maplin, Toy’s R Us, Bunnings, Staples, Banana Republic, Phones 4 U, Austin Reed, Blockbuster, Barratts, Tie Rack, JJB Sports, Past Times, Borders, Comet, Jane Norman, Principles, Focus DIY, Dixons and Bhs, Alders, Lewis’s in Liverpool, C&A, MFI, Woolworths and a host of other well-known brands and stores that are facing closure or that have left huge voids in the high street.
It’s all over the news.
Years ago it seemed as if the little guys were struggling on the high street. But we have witnessed a bit of a resurgence on the high street. Butchers are making a comeback, as are fishmongers. Real food with real experiences. Coffee shops are springing up all over the place, as are exciting individual, boutiques with well-curated stock.
Pop-ups are becoming more popular. From small start-ups to market stall mentality shops, that allow local people to showcase their products, as seen in Pengetout by Retail Revival.
Small is beautiful once again.
Huge stores, that offer the convenience of buying everything you need (but not necessarily want) under one roof seem to be struggling as more and more people are making more trips to their high street or buying online rather than the large weekend shop. It can’t be a coincidence that most high street stores are now opening smaller formats on the high street where they used to be. Rents and rates are crippling too, a point highlighted by Dave Lewis at Tesco. Bigger stores = bigger rents and rates.
If brands don’t change, they will join the list in the first paragraph. But change is happening and we could see one of the most exciting times in retail, if there is genuine innovation.
Sainsbury’s have recently refurbished one of their largest stores in South East London with a Gourmet Sushi Bar, Argos, Specsavers and other stores within a store. The big stores feel smaller with stores within a store.
We have seen the ‘layering’ of businesses on the high street too, with more aspirational businesses incorporating art galleries, cafes and restaurants, artists spaces. Creativity is great for high streets. Small businesses seem better at it than large brands. It’s easier to adapt and innovate if you are small.
Hagkaup a sort of Icelandic version of John Lewis recently went through a similar experience. Their flagship store was redesigned by MWorldwide and has won a raft of awards (I was on the jury of the fab Awards that added to their list). The new store was made 50% smaller, yet sales remained the same. Some customers even thought the store felt bigger and they look and feel like genuinely nice places to be.
Are we going to see more of this? I think so. Large brands and chains are going to shrink in size, both as terms of footprint and amount of stores. They will share their space with like-minded brands. They may change their branding like Byron, to appear more local and interesting. They will become more creative and personal. You find massive choice online. Smaller stores will offer more curation to create or fill a niche.
I expect to see brands trialling exciting new products and formats in pop-ups. Box villages will be more popular, such as the one in Croydon and Shoreditch.
Brands will look less and less like cookie cutter store formats of old as they try to look more interesting and local. But this is difficult to scale. So the chains of the future will probably be smaller, or perhaps be owned by a larger brand but take different forms to appear more local.
Lidl and Aldi have stolen a march on their competitors with smaller format stores, that offer less variety and a simpler shop under the premise of greater value. Their packaging makes products look like brands, less corporate and more expensive than they are. The stores feel like they are economical with the fixtures and fittings, it feels honest. You get a feeling that you understand why they are cheaper.
Large stores are complicated. Smaller stores are simple.
Large stores are inhuman, soulless, dull, overwhelming.
Small stores are often friendlier, fun, helpful. Trader Joes in the USA is a great example.
Today when you can buy products online, bricks and mortar stores are going to have to offer something extra. They are going to have to make the experience of shopping. Why do the big shop at (insert name of the supermarket here) when you can do it online and get it delivered?
Big out of town stores were once more convenient.
Now the internet is.
The small high street stores that struggled to compete with the large stores are seeing the large stores struggle. To some degree, the tables have turned.
How these huge empty voids left by the likes of House Of Fraser in high streets will be filled in the future is an interesting question.
Will they become villages of lots of smaller shops? Office Space. Apartments with mixed-use and smaller retail? Who knows for sure, but the way we shop is changing and now it’s the turn of the larger brands to adapt or die.
Small is the new big. As the famous ad says, ‘it’s time to think small’.