Having been involved in the tech section of the Grimsey Review, I’ve followed responses to it’s launch assiduously. Unleashed by Bill himself in the House of Commons, media coverage has been extensive and then this last week we had the BCSC in London which prompted much comment.
I’m going to ignore the bitchfest with Mary Portas as it is a meaningless sideshow. Without Mary P the State of the High St would not be such a hot topic, but it needed the extra gravitas and commercial analysis that Bill G has brought. Praise to both of them.
Commentary has focused on the problems of the here and now: Business Rates, Parking costs, Ownership issues, Use Classes, CPO’s etc. It seems to me everyone involved in the retail or property industries largely knows what needs to be done in these areas. The challenge is that those not in these industries, especially Government, either do not ‘get it’ or don’t really care, friendly supportive words notwithstanding.
Cracking that problem will be hard. Failure though will have nasty consequences (slow death is not pretty) but maybe, like with city centre riots, no-one cares until they occur and we’ll have to wait till then for action to be taken.*
But all that aside I am interested in where tech fits into all this. The Grimsey Review has an extensive section on this subject and the full tech report is downloadable here. I get a mention in the credits so obviously it is a must read full of truth and fascination.
The BIG point though is this: In tech terms ‘you ain’t seen nothing yet’ and what’s coming will, to paraphrase Nietzche ‘either kill you or make you strong’.
The launch of 4g, widespread wifi, powerful and getting more so smartphones are enabling the development of such immersive, entertaining, personalised and great to use online services that today’s offerings will shortly look somewhat primitive. Couple incredible ease of use with same day delivery (see Shuttl, Argos & Amazon and others) and e-commerce becomes ever more attractive to shoppers (and retailers?) .
Compete with that!
Many are of course. Witness reports yesterday of John Lewis spending £85 million on e-commerce tech and infrastructure in the last half year. This is the sort of real commitment that the best in class retailers are showing. The consequences of which are covered in an earlier post.
So what does this mean for Developers and the wider Property industry?
The bottom line is that the property industry provides the Operating System, the Platform, for their tenants to build on. This used to be simple. Four walls and a roof was just about all that was required. But that was in the Analogue World. We are now deep into the Digital World and the provision of virtual services is as, if not more, important than bricks and mortar. The software needs an upgrade and the computer a reboot.
Think about a Shopping Centre or High St. In each case we have a collection of retailers, restauranteurs or providers of other services. Who does, or should , have the best overview of all these occupiers and the visitors coming to see them? The property owner of course. This is less so in most High St’s which are under multiple ownerships but that is something that has to be tackled one way or another. The prize of owning the overview is too valuable to ignore.
Now, the key to a successful retail area will be how well data from that overview is fed into the Property owners Operating System and leveraged to provide a Platform on which all occupiers can build services. Real time offers, customised product showcases, personalised services, VIP invitations to specific events, click and collect facilities, home delivery. And so on. The property owner working in collaboration with their retailers to enable the provision of spectacular service to their customers. All the benefits of e-shopping on top of a great day out.
The point is utilising technology to create an experience that is preferable to virtual shopping, however brilliantly efficient that is. Business rates and all other practical issues aside, the bottom line is ALL physical retail is doomed, in the medium term, if they cannot find a way to beat online. And the only way to do that will be to co-opt tech as an ally…. not an enemy.
The decline of the High St is by no means set in stone. Nor the success of Shopping Centres. Everyone (by and large) is playing by the old rules from the analogue age. Few have really committed to digital. Just look out online for anyone from the property owner world. Almost no one is active. And without actively engaging you’re going to have a hard time getting it right when the time comes that you have to commit to a digital future.
So, funnily enough, I think it is property people who are going to decide the fate of who wins in the retail world. Medium to long term it is not about whether the ‘place to be’ is within a Shopping Centre or on the High St. It’ll be about who can create the best user experience. And that experience will deeply meld the digital and physical worlds.
Who’s going to ‘bin the Blackberry’ and create the retail experiences that the ‘modern’ world craves?
* Maybe change might be in the air. The Sunday Times this morning launched a campaign for reform of business rates. Rather shameless piggy backing on the Grimsey Review but welcome nevertheless.