The UK is the Canary in the Coal Mine for Cross-channel Retail Effects

London in January is not really at its best from a tourist’s point of view. Since ICSC chose to have its Global Research Conference there this January, it gave us an opportunity to see this amazing city from a different point of view. We were also able to see the impact of the internet that was discussed at the conference.

A very hot topic of the conference was the impact that the internet was having on retail real estate and how it has multiplied the challenges of the economic downturn. In fact, one of the panel sessions was “Is There Too Much Retail Space.” The general consensus is that certain kinds of retail developments are in real danger (e.g., power centers and undifferentiated malls) while the best high streets and shopping centers will continue to thrive as shoppers look for experiences that they cannot get online.

The fact that the UK is a laboratory for these kinds of effects did not come as a surprise to us. We participated in a global study on cross-channel retail with our international partners at the Ebeltoft Group. The US and UK came out as leaders in retailing that links the online/offline experience. What did wow us was the work that has been done by some of the staid UK retailers that we really did not expect to be leaders. Two great examples are Marks and Spencer and John Lewis.

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John Lewis shows in the store that online shoppers are welcome.

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It is not just these large department stores that are telling customers that they can buy anyway that they want. Dorothy Perkins, a fast fashion UK chain, encourages their customers to use the web in the store. They even use their security stanchions to reinforce the message as you walk in the store.

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The new Burberry store on Regent Street is a great example of a store that sees their online business as just another way to provide great service. The sales people here are armed with tablets that they carry around with shoulder straps. They can find any style, color or size you want and send it directly to your home, wherever you live. They can show you how products were shown on the runways using their tablets and the interactive screens in the stores. Make no mistake though, the in-store experience makes a trip to the store worthwhile.

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While we did not see a lot of vacant space in the center of London, we were told that there are serious vacancy issues in less desirable retail estate. Retailers and retail real estate owners around the world should look carefully at the UK. They are leading the way in internet impacts. They are the canary in the coal mine.


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