• Oliver Hudson

What The Growth Of Pop-Ups Tell Us About The Future Of Retail

Change is in the air. This week saw the much anticipated return of pubs and restaurants to the UK high street. Unable to serve customers indoors, many have elected to erect makeshift seating and stalls, turning Britain’s streets into a patchwork of al-fresco hotspots. Data compiled by Built-ID has seen a boom in community support for this kind of flexible outdoor space, but beyond simply responding to lockdown restrictions, this increased demand can tell us something about the future of retail. To succeed post-pandemic, the high street needs to focus on being local, independent and flexible.


The Impact Of COVID-19


Few sectors have been harder hit by COVID-19 than physical retail. As footfall fell, the shift to digital took hold, with online accounting for more than a third of all retailing during the first lockdown. The pandemic served to accelerate the challenges already facing the sector and accounted for a number of high profile casualties. The Arcadia Group, which at its high held more than 2,500 stores, entered administration and those that have survived have shrunk, including John Lewis who have closed almost a third of their outlets in the last 12 months. The overall picture for bricks and mortar retail looks challenging and it is likely to get worse before it gets better.


A Desire For Local, Independent and Flexible Space


But this challenge presents an opportunity for new retailers, previously priced out of the high street, to plug some of that gap. In addition to the shift towards digital, lockdown has encouraged consumers to increase their spending locally, providing new opportunities for smaller independents to compete with the larger chains. 80% of UK shoppers now say they feel more connected to their local community than pre-pandemic. With work from home likely to persist even after lockdown eases, spending will continue to be diverted away from city centres and towards local high streets, and our data suggests this is a trend communities are happy with.


Built-ID recently worked with Crosstree on a piece of engagement around their King’s Walk Shopping Centre, where 60% of respondents wanted to see space provided for smaller independent retailers. Results were similar at a consultation we led for First Base, with 69% of those surveyed keen to see plans support local business, including 72% who wanted to see space provided for local independents.



“The shops need to have an independent business focus helping local business and people from within the community thrive. We do not need any more chains.”
“There’s no need for big brands – the area has a range of great independent ventures. Support those: make spaces affordable to start up businesses, and the area can have shopping space whilst having a positive impact.”
“Affordable and local will be critical to our post-Covid future”

These quotes taken from another consultation in South London are typical of the responses we are seeing and landlords and developers are beginning to respond. This week, one of our clients L&G announced it would hand 10 local entrepreneurs free space at its Kingland Crescent retail parade, and we expect this approach to become more common. Flexible space too has seen significant support:


“[we need] flexible spaces to accommodate a variety of uses over time.”
“[we need] a greater variety of pop up food stalls and outside community spaces”
“[we need] pop up and temporary retail to allow locals to start new businesses”

Procuring exciting local independents and incorporating flexible uses not only helps landlords fill vacant space, but it also provides a more authentic and engaging experience for their customers.


How Many Artisanal Bakeries Do We Need?


Chain stores make up a significant percentage of UK retail and it’s neither realistic or desirable to turn every high street fully independent. But a big part of the drive towards localism is about shoppers looking to make ethical and purpose driven choices and that insight represents a lesson for even the largest of brands. For years the leading indicator of a company’s reputation were the products they sell, but today companies are under pressure to stand for something more than profit alone. More than half of Gen Y and Z consumers have already shifted a portion of their spend away from companies who have disappointed them over a social issue.


Likewise, not every space can be flexible, but a big part of the drive for more flexible space is about empowering high streets to remain relevant and experience led. High street stores need to provide a service beyond the purely transactional, making the act of shopping an engaging and pleasant activity in and of itself. This doesn’t have to be about expensive shop fit outs, it can come from the personalised service of a local butcher who knows your weekly order, or a baker who greets you by name. If larger chains can adapt to these changing demands, they can sit authentically alongside independent brands on the high street of the future.


Conclusion


Lockdown has been a tough time for the high street and that pain is likely to continue. But physical retail is not going away, it will just have to adapt. The high street of the future may well look closer to the high street of the past, with fewer chains and greater space afforded to local independents. The thing that will unite successful retailers both large and small, will be the need to be purpose driven and experience led. Remaining relevant and staying on top of changing demands will be a challenge, but those who equip themselves to listen to their customers will be best placed to succeed.