July saw a growth of 5.9% In retail sales in comparison to the same month last year (source: Office for National Statistics) — perhaps a surprising statistic so soon after the UK voted to leave the European Union in late June. ‘Vote Leave’ initially caused chaos, sinking to pound to a 31 year low and looking almost certain to damage the economy. However, a low valued pound is a positive for the foreign demographic living in the UK, leading to an increase in spending on high value items. The luxury retail sector has benefited from these changes and this could be an explanation for a strong July.
A growth in retail sales is a far cry from the national uncertainty that originally broke out following the leave vote. As retailers often import a significant amount of goods from overseas, they — in theory — will still be one of the sectors most affected when a government deal is finally reached. While already surviving on smaller profits and with a consistent decrease in footfall, retail brands may need to adopt new ways of thinking in order to stay relevant and competitive without the EU. There are a number of fresh approaches to existing retail models that could have a strong relevance in our future economy.
One example of a new approach that could help to combat the Brexit effect on retail, is to create smaller, ‘showcase’ stores. This concept works by opting for a smaller space and displaying a more refined selection of products in lower densities. The benefits are that the brand enjoys smaller rent costs, as well as having to manage less stock, space and people, while providing digital in-store orders means that no sales are lost with the reduction in floor space. But, perhaps more importantly, customers can enjoy an intimate and unique brand experience.
An example of a brand who have tried this are Oasis, who have recently opened a small format store in Surrey. Oasis have created a really personal and homely feel, where they allow customers to take their time shopping the range intimately. The inclusion of a chill-out area, plus complimentary coffee and Prosecco creates a showroom or exhibition type of experience that provides a focus on the Oasis product.
Another way in which retail brands can look to safeguard from the effects of leaving the EU is to create multiple offerings. By providing more than one service under the same roof, brands can really improve their proposal to customers. This concept requires brands to think about how they can make their stores more efficient, adding services that complement their existing proposal, in order to create more engaging experiences for their customers.
An example of multi-offerings in a retail environment is the latest store from Ted Baker in East London. Here, Ted Baker have created a store that stocks their whole offering, from suits to glasses and bicycles. However, more interestingly, they have provided the addition of a grooming room. This includes a fully fitted barbers for male customers and a beauticians for female customers. Ted Baker are offering a completely different service to their normal offering, yet by tapping into their traditional heritage and values of grooming, the service is still on brand. Not only is this an efficient use of space, it also creates a more exciting and versatile brand space, which is great for brand perception.
The examples described show how innovative retail design has helped brands stay relevant and competitive in already challenging times. However, when the UK starts to take shape without the EU, these ideas — amongst others — could become important ways to re-imagine the retail sector. Following these design principles and thinking about how the future of retail might look are ways that brands can protect themselves against changing times. It could become more important than ever for brands to adopt new ways of thinking in order to provide compelling, yet sustainable, brand experiences.
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