In a week in which Arcadia took its proposed store closures to a creditor vote, Amazon was opening shops.
The divergent fortunes of the pair paint a stark picture of the ongoing shift in the retail landscape, as some of the old empires shrink and new powers rise.
As the etail goliath faces scrutiny over its tax arrangements and accusations it is contributing to the ‘death of the high street’, the stores and their support for entrepreneurs could help cast Amazon in a kinder light.
However, the Clicks and Mortar chain also tells a bigger, and perhaps more important, story about how retail is changing.
“Change rather than permanence is becoming a source of retail appeal”
It represents the increasing importance of temporary retail space and its imaginative use.
The stores are pop-ups – open for a year – and they will be occupied by around 100 small online businesses for varying lengths of time.
For some of the retailers, it makes sense only to have a physical presence at particular times of year, such as seasonal peaks, or to run specific brand-building initiatives.
But temporary stores, shorter occupation times and new uses of property are becoming more common in retail generally.
Whether it is pop-up malls such as Boxpark, in-store dining clubs such as those run in Waitrose by WeFiFo, or the emergence of short-term space marketplaces such as Appear Here, change rather than permanence is becoming a source of retail appeal.
That constant change helps keep retail destinations, whether mega-malls or local high streets, vibrant. They also reflect another trend – the desire among many shoppers for unique products. Amazon’s venture is reminiscent of Notonthehighstreet, which opened Christmas pop-ups for its sellers at Waterloo train station and Westfield London.
Rise of independents
Online marketplaces have brought big opportunity for small businesses. The effect on established big retailers has been likened to being eaten by a million minnows.
In the old days, the retail industry’s big beasts battled one another for market share and independents were devoured or became collateral damage in the process.
But now an abundance of independents, able to reach a bigger customer base by trading online, combine to pose a powerful force in their own right and to nibble away at market share that once would have gone to the multiples.
As it unveiled its Clicks and Mortar stores, Amazon said that in 2000, only 3% of its physical gross merchandise sales came from third-party sellers. Last year, the proportion stood at 58% – and much of that came from small businesses.
As big retailers such as department store groups seek to reinvent themselves, perhaps they should look at how a pop-up approach, with small partners rather than established names, might reinvigorate their shops.
“When the traditional retail property model appears to be at breaking point, all new ideas are welcome”
That might challenge some of the traditional store performance metrics, but those are in many cases under pressure anyway, so where’s the harm in attempting to apply some imagination and push some boundaries?
New models must be available. Plans to open a food hall promising independent food vendors, bars, a children’s play area, an events space and demonstration kitchen in the former BHS on Oxford Street show the direction of travel.
In the same way that many retailers churn their estates, perhaps more should churn their interior space to create greater excitement and draw footfall.
While they are not necessarily working with small businesses, it is noticeable that two of retail’s longstanding success stories, Next and Primark, have been conspicuous in their imaginative use of space. The latter, for instance, is soon to open a Friends-themed Central Perk cafe in Manchester.
Amazon deserves credit for its pop-up initiative. Findings from the scheme will be fed back to the government as it develops its Future High Streets strategy, and perhaps they will hold valuable lessons and provide ideas to the retail industry more widely.
When the traditional retail property model appears to be at breaking point, all new ideas are welcome.