While many retailers have tightened their belts to counter the impact of the coronavirus pandemic, some have used the time to launch new concept stores to expand their reach.
With the majority of bricks-and-mortar retail stores closed for the past three months, the industry took notes from essential retailers to prepare for their reopening on June 15.
Perspex screens and floor markings have become the norm, but some retailers have gone further by opening new stores and launching new concepts for shoppers to return to.
“The Trafford Centre is a very popular location that would have been difficult to secure a position in, so if Primark can open with social distancing measures in place, why not do so?”
Kien Tan, PwC
On June 15, value retailers such as Sports Direct and Primark led the way as the most popular with customers, and Primark played up to the hype by opening its new store in Manchester’s Trafford Centre.
Originally set for March, the opening was delayed by the pandemic, but the value fashion chain vowed to return “with a bang”. The new opening also took advantage of the pent up demand for Primark clothing and products, as its shoppers in lockdown had no alternative online channel.
The Trafford Centre store will also host a beauty studio, café, and ‘Custom Lab’, but these elements are temporarily closed.
Trendspotters
PwC senior retail adviser Kien Tan adds that for Primark opening the new store in conjunction with the rest of its estate on June 15 made sense.
“In the case of Primark, the Trafford Centre is a very popular location that would have been difficult to secure a position in, so if they can open it with social distancing measures in place, why not do so?” he says.
“For a retailer like Primark where they may well have been able to accelerate their opening plans during the lockdown because there are more people available to help and there’s more free time to do so, it makes sense that they would make that decision.
“They’ve also got an excess of stock available to populate the store with.”
“The opening would also reduce pressure on other Primark stores in the local area. Ordinarily, a destination like the Trafford Centre store could be in danger of cannibalising sales from other stores in Manchester city centre or in the satellite towns, but with capacity limited in stores due to the social distancing, the new store will help even out the customer demand and relieve pressure, as well as serving the customer better.”
Value grocery retailer Lidl also opened a new store on London’s Tottenham Court Road. Typically a mid-size supermarket that opts for retail park locations, the new smaller concept store in the city centre marks a strategy change for the grocer.
Lidl has been going from strength to strength over the last few years, with its market share now at 5.7%. The concept is likely to be popular with customers in the longer term, but its current challenge is the lack of local traffic in an emptier than usual city centre.
Dunelm’s new concept, on the other hand, has been able to take advantage of lockdown trends – shopping locally and demand for homewares and redecorating.
Dunelm Edit is a small version of the big-box store, found on Crawley High Street. In the new concept, the chosen “edit” will be made up of products that are most popular in the Crawley area – an idea that will be replicated in future iterations of the concept in different neighbourhoods.
Like the Primark store, Dunelm Edit was originally set for an earlier launch date but reopened quietly on May 28. As footfall data indicates shoppers are mostly opting for their local high streets over other destinations, Dunelm will be able to trial the concept with an influx of local customers.
The homewares retailer did not say where or when the Edit fascia will be rolled out further.
Capitalising on the homewares trend further is grocer Morrison’s who launched its first standalone Nutmeg store on June 26.
Nutmeg Bolsover will sell Morrisons’ full range of homewares and clothing for men, women, children and babies, including over 1000 new product ranges, to help drive the supermarket chain’s fashion credentials.
Luxury experience
Similarly, The Watches of Switzerland Group has debuted a standalone Tag Heuer boutique in Oxford’s Westgate shopping centre, one of three that will open over the coming weeks. The boutique will sell over 150 timepieces unique to the brand, with the group aiming to create more mono-brand experiences for loyal customers.
Golfing goods retailer American Golf has also opened a flagship store in New Malden. Designed by Esdaile Design consultancy, the shop features digital elements such as a driving range and custom fitting nets.
The store experience in many cases has currently been impinged by the regulations surrounding the coronavirus pandemic, but by creating fun activities that can be enjoyed solo and at a social distance, American Golf’s stores will still offer an enjoyable shopping experience.
“Some retailers have been accelerating plans because it is a golden opportunity. Next, for example, has taken advantage of the fact that Debenhams locations have become available”
Kien Tan, PwC
Swedish bed brand Carpe Diem has similarly been able to ensure its luxury experience comes first. The brand launched its first store outside of its native country in London’s Marylebone area just before lockdown rules were put in place, but has now reopened and experienced a “good start [with] more traffic than expected”.
Carpe Diem offers complete customisation of its products as well as personal appointments, meaning customers can have a unique experience while maintaining safety.
Tan says while the majority of these plans would have already been in the works, retailers with the available cash and inventory such as Primark were wise to accelerate the launch of their new stores. He also notes Next’s new Beauty Hall concept, which was announced in May to replace struggling Debenhams locations.
“A lot of retailers are currently having a tough time so many may be running at a standstill in order to preserve cash. In an ideal world, they would have been thinking about new stores during lockdown but that’s not necessarily a possibility for them,” says Tan.
“Some retailers, however, have been accelerating plans because it is a golden opportunity. Next, for example, has taken advantage of the fact that Debenhams locations have become available – which are prime locations where they were most likely able to cut a good deal with the landlords too, meaning it was probably a once-in-a-generation opportunity to get such good locations.
“I wouldn’t say that a retailer was wrong not to have jumped on these chances, but where there are opportunities to take, or plans that have been on the back burner for later in the year or maybe next year, those with the capacity made a good move.”
He also notes that new concepts would have already been well-researched, so would not have been more of a risk to implement during lockdown than any other time.
While the pandemic continues, retailers that are able to open new stores can capitalise on the appetite of shoppers after lockdown and take advantage of the opportunities available.
There has also been no better time to think about new stores, using the time in lockdown to be productive and understand what customers want and how their behaviours may have changed.
While opening new stores carries some risk and a lot of investment that may not be readily available, the retailers that have shown their innovation may win in the long term.
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