Future Of Retail 2019 (24)

Future of Retail | Summary, slides + photos

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A look at the changing role of town centres, the impact of tech, and how retailers are becoming more flexible were the key talking points at this Place North West event.

More than 170 people attended the half-day conference hosted at Manchester’s Science & Industry Museum. Speakers included Phil Hepworth, associate director at AEW Architects; Gary Crompton, director at Barker Proudlove; Dan Sweeney, partner at TLT; Alison Niven, regional centre director at Intu Trafford Centre; Alison Clegg, director of asset management at Grosvenor Europe, owner of Liverpool One; Andrea George, director at Bruntwood; Vladislav Mukhachev, co-founder at Mindful Store; Jeremy Hinds, director at Savills; Ian Standring, director at WSP; and Gareth Hudson, head of construction at McDonald’s.

The event was sponsored by AEW Architects, Bruntwood, Savills, TLT, and WSP.

Future Of Retail Logo

Making suitable spaces

Phil Hepworth from AEW Architects began the conference with a presentation highlighting the changes in retail, specifically in town centres, and what architects are doing to make these locations more appealing for the new demographic.

  • The oversupply of retail is a problem and has contributed to the statistic that 16 stores close every single day, and already in 2019 a total of 2,870 stores have closed
  • Business rates and Brexit are two of the biggest strains for retailers as they cause a “strain on the purse strings for the consumer” which Hepworth said is making it harder to attract occupiers to physical stores
  • Each town has its own unique selling point that makes it special and distinctive. Hepworth called this “an opportunity” for “the town centre to change its retail offer and connect to its key demographic. They can diversify their offer and increase footfall this way.” Councils in Stockport and Bolton are already doing this and tailoring their centres to its locality. This includes, in some areas, moving away from the retail-led aspect and shifting to more leisure-led areas dependent on what is needed in that area
  • For Hepworth, he envisioned city or town centres more connected to the local area both by integrating with the people who visit, but also making the space better utilised. “By connecting schemes like Pioneer Place in Burnley to the high street and creating new public realm, it encourages people to spend more time there and enjoy it. A big thing about space is its management and curation so everything works conveniently together”
Phil Hepworth

Phil Hepworth, associate director at AEW Architects

 

Diversify and conquer

Hepworth joined a panel featuring Gary Crompton and Dan Sweeney.

  • For Crompton “this has been the most challenging period for retail” he had ever seen, but discount retailers like Aldi and B&M are thriving. Meanwhile mid-level fashion retailers are failing as they’re the ones most impacted by the success of online retailers like Boohoo
  • Sweeney said: “We’re set to see more CVA casualties. Landlords are looking for tenants who are vibrant and desired commercially. One thing that would help the market would be changing rent structures faster than they have been.” Crompton agreed and added that “There is a lot of criticism on how CVAs and rents are negotiated. REVO is leading the charge on the CVA system, but when you look at companies like New Look, where they requested a negotiation of rents, they ended up losing stores”
  • Diversity and acknowledging the market are key components in success according to the panel. Sweeney explained: “We’ve got a situation where it seems locations were built with an ‘identikit’ with the homogenisation of the high street”
  • After a question from the audience about the next step towards climate positivity, Hepworth said: “We need to create thermally efficient buildings, but there are lots of strategies we can use, and for the fashion retailers, I expect to see a reuse or renting of clothes system coming into play”
  • Sweeney agreed and said Boohoo had recently appointed a head of sustainability in the face of criticism over its ‘fast fashion’ approach. For him however, he saw logistics and delivery as the next focus. “As consumers we demand that retailers provide the same fast accessibility of their goods, but the impact of all the freight on roads, its logistics, and its supply, and its packaging all costs money”
  • When asked which areas are set to see regeneration in the next few years, Hepworth answered Stockport; Crompton said Bolton; and Sweeney said “the roadside generally, such as large service stations. There has been a huge amount of growth and investor interest”
  • Planning is another factor important to consider according to the panel. Hepworth said: “Councils understand the different pieces and try to fit them together better because they have big aspirations for the town. Councils need to be visionary to encourage this change, and already people are getting more involved. Yes, policy is out of date, but retail has changed so quickly it’s been hard to keep up”

From left: Dan Sweeney, partner at TLT; Gary Crompton, director at Barker Proudlove; and Phil Hepworth, associate director at AEW Architects

Shopping centre focus

Following the panel discussion, Place North West editor Jessica Middleton-Pugh discussed some of the main talking points in retail and property with Alison Niven of Intu Trafford Centre and Alison Clegg of Liverpool One.

  • Niven began by speaking about the Trafford Centre and how it has evolved since opening 21 years ago. “We’re working on how to keep reinventing ourselves. In our more recent ventures, we’re more than halfway through the £70m refurbishment of Barton Square and have changed its offer from home use to leisure use. Most excitingly we’re saying hello to a 100,000 sq ft Primark soon. From the beginning of next year, we’ll also benefit from the opening of the Trafford Park tramline”
  • Clegg explained Liverpool One’s position in the city. “Footfall remains pretty stable, and the vacancy levels are really low despite the issues in the market. From a leasing perspective we’re seeing a lot of keen new clients, like Pull & Bear, who are key clients and want to get into the city and into the North. We’re still seeing a need for leisure, so we’ve recently brought in Junkyard Golf and are in talks to bring in escape rooms, but we still want to diversify further and open more hotels and hostels”
  • On the struggling retail market, Niven said: “Don’t always believe the headlines. The Trafford Centre has seen millions of people walk through our doors since its opening. Also, from another perspective, don’t underestimate how much money has been put back into the market from PPI claims.
  • She added: “The sectors that are doing particularly well are luxury brands, hence why Selfridges has recently completed its £10m refurbished beauty hall and they’re planning further refurbishments on its other floor”
  • Technology has aided retail’s development according to Niven and Clegg. “The footfall data we’ve collected has fed into our events offer” said Clegg. Niven added: “By investing more money into demographic data we can realise their behaviours and know who our valuable customers are. This data is black gold; it’s beyond valuable”
  • Climate change is on the retail industry’s mind, so much so that the Trafford centre consumes half the electricity it did when it first opened “by being conscious” according to Niven, who also said that with the opening of the Metrolink line, she’s hoping to see people use that instead of their cars.
  • Clegg added Liverpool One is “pushing hard on our green agenda, and we monitor air quality constantly”
  • To conclude, Clegg and Niven said they see retailers remaining on the high street and in the city centre. “I absolutely think we will still have a place in 10 years” said Niven. “It depends on our offer, and if people refuse to leave their houses then society is broken down so much that retail is the last problem. We provide an experience, and that can’t be replicated”
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From left: Alison Niven, regional director at Intu Trafford Centre; Jessica Middleton-Pugh, editor of Place North West; and Alison Clegg, director of asset management at Grosvenor Europe, owner of Liverpool One

Automation and changing perspectives

Following a networking and coffee break, Ian Standring of WSP gave a presentation on technological innovations in retail, how we can combat climate change, and how wellbeing has become a key issue for the future of the built environment.

  • In terms of an ‘electric revolution’, Standring said electric vehicles can provide a clear opportunity. “We need to look a step further at a masterplan around new mobility. It’s something we should be considering in a development timeline. More people are buying electric vehicles, and we predict an exponential curve of people moving from petrol and diesel over to electric”
  • He predicted retail-led development is less likely to be seen as much in the future. “Retail has become the icing on the cake rather than the cake itself. Identity and personalisation are just as important as we live in an Instagram and experiential society which and that’s coming back to the forefront”
  • This ‘experiential’ aspect is “drawing people in and providing more than just a product. It works with the vested interest in things like air quality, along with creating more of a sense of place, to create a full experience”
  • To incorporate these changes, we need to be more flexible. “Automation isn’t that far behind. We need to think about creating autonomous drop off zones, which will overall help with Manchester’s severe lack of green space and help us to be carbon neutral which the GMCA aims to be by 2038”
  • Standring saw staff wellbeing and climate change as going hand in hand. “Cooling and lighting systems to make spaces greener, also work by providing more natural light and fresh air, which help staff and customers feel better as well. It is driven by policy and conscious targets and is a positive opportunity to use less energy, save money, and encourage health and wellbeing”
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Ian Standring, director at WSP

Standring then joined a panel featuring Andrea George, Vladislav Mukhachev, Jeremy Hinds, and Gareth Hudson.

  • Bruntwood has “responded to the market, and in order for other retailers to do that they need to become nimble” according to George. “We own Afflecks and Hatch, and both offer flexibility for retailers. We have the more regular units too, but it’s good to provide the service to test the market without committing to long term uses. Our upcoming development at Circle Square will also further this mission by becoming an incubator for our retail offer. We’ve really tried to go with the market and stick with the community feeling.”
  • Hinds explained how cities and towns had been shaped since the 1940’s. “The postwar period was dominated by planning policy where you could only put a shop in. This had led to a decline in overall centres. Retail shouldn’t be the key driving force of a town or city centre as it’s not a crown jewel. Centres should have a mix of housing, education, and other facilities, but unfortunately we still have a planning system that looks at the role of the town centre as retail”
  • Hudson continued on from George’s comment on personalisation and said tech underpins this innovation. “With robots set to enter our kitchens and automate some of the processes, it frees up staff to deliver more customer-facing service. We’re also looking at number plate recognition software at the moment and are currently in talks to input EV charging stations. McDonald’s was one of the first to implement wireless charging and iPads at tables and we also started our delivery service last year. All of this goes towards creating a better and more immersive experience”
  • “The best offers that are out there are from the retailers that combine presence and branding, and that’s where the future’s at for sure.” According to Standring. “There is a link between loyalty and creating connections between the customer and the retailer. Space is about curating people and connecting them”
  • Mukhachev took this idea of branding one step further. “Retailers need to further their online branding and create more engagement online. People have this perspective of a competition between offline and online but that needs to change as they’re an extension of the other.” He also went on to say that while technology will have an undoubted change on retail “the biggest opportunity is to build a brand on top of these technologies to drive more connectivity”
  • The panel gave their thoughts on what innovation people should keep an eye on. Mukhachev said “branding and the move to online.” Hudson said “electronic vehicles and what they unlock as a consequence.” George said “further customisation and personalisation along with sustainability.” Hinds said “personalisation with a look at how stores adapt to do this.” He also predicted “branded restaurants are likely to decline.” Standring concluded by saying “public realm innovations, becoming future-ready in response to climate change”
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From left: Vladislav Mukhachev, co-founder of Mindful Store; Gareth Hudson, head of construction at McDonald’s; Andrea George, director at Bruntwood; Ian Standring, director at WSP; and Jeremy Hinds, director at Savills

The presentation slides can be accessed below:

Phil Hepworth, AEW Architects

Ian Standring, WSP

The next Place North West conference is Manchester Offices and Workspace Update 2019.

Find details of all upcoming Place events here. Tickets to next year’s Future of Retail event are available below.

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