The woe of the retail sector is well publicised: declining consumer confidence (not helped by the recent riots) and rising input prices are common headlines. This is compounded by a fistful of recent high-profile insolvencies that have retailers reeling.
So what does this mean for the overcrowded, consumer-starved high street?
While structural change is inevitable – and there’s an undeniable need to take out excess capacity – there are a vast number of retailers who are focused on surviving. Here’s a small selection of businesses proving the high street is not dead:
- Wolf & Badger’s innovative approach to retail addresses many of the structural issues that more traditional competitors suffer from. It offers designers a low-cost solution, which in turn gives Wolf &Badger the pick of up-and-coming brands ahead of the competition. And the industry’s impressed: Wolf & Badger has won awards such as Brands of Tomorrow 2010, Best Boutiques 2010 (Vogue), and Best New Shops 2010 (Timeout).
- Mankind.co.uk’s use of social media, coupled with its multi-channel distribution approach, sets this male-grooming business apart from its competitors. And this brand knows all about customer service: it encloses trial samples with every purchase and offers a loyalty discount (up to five per cent) on every customer’s spend per quarter.
- Card Factory opened the doors to its first store in Wakefield back in 1997. Now it has more than 580 shops spread across the country. Detailed consideration of price architecture means there’s something here for everyone, which widens consumer appeal. Some would have written off cards as a dead sector in the digital age, but Card Factory’s proving them wrong.
- Dwell. Even in the battered homewares sub-sector, the clever use of online and destination stores makes this retailer price competitive, without needing high-cost marketing strategies. Smart use of designed showroom examples and “get the look” options lead to bigger baskets. And it delivers the product quickly with minimal fuss.
- ChainReactionCycles.com’s detailed understanding of bikes, coupled with customer focus and service, has resulted in this retailer performing well in a crowded marketplace, without a huge bricks-and-mortar presence. USPs, such as the ability to custom build or upgrade any cycle, appeal to its consumers .
- Ted Baker. This product-led lifestyle retailer has a very loyal following, enabling multi-channel growth. Extensive use of social media to drive the brand means minimal overt marketing. While the store experience is highly stylised, the number of bricks-and-mortar locations has been carefully managed through a mixture of shops and concessions .
- TheHut.com is an online, multi-product retailer using numerous brands to develop a following. Daily deals and giftware, carefully selected to capture that ever-decreasing consumer’s disposable income, protects its sales line and margins.
- Hotter Shoes – a catalogue, a brilliant interactive website and shops, all aimed at “delivering happy feet”. A great multi-channel proposition for a product many said couldn’t be sold on the internet. It insists that comfort is its USP, and the theme runs through everything it does. The consumer knows what to expect, and easily develops a relationship with this retailer, whether in store or online.
- Next. A household name with all the characteristics of a retailer that should be suffering (ie: 500-plus stores in the fashion and homeware sector). But this one’ s bucking the trend. This high-street stalwart offers its consumers an enjoyable shopping experience by listening to their feedback and delivering on it –and has so far resisted dipping into the crowded value space.
- Yellow Moon. This arts and crafts retailer has a clear understanding of the social pressures on parents, and offers products at a price that doesn’t break the household budget. It’s really tapped into what its consumer wants. Plus it has great CSR policies: it has helped raise more than £3.3m for schools and groups via its special “fundraiser catalogues”.
These retailers have put their customers at the centre of their strategy, and embraced social media and the online age. They’ve met the structural, geographical, inflationary, financial, social and footfall conundrums that plague their competitors head on. These are the businesses rising to the challenge, and redefining retail. Long live the high street!
Anne-Marie Laing is a partner in the financial advisory and restructuring services team at Zolfo Cooper. She has more than 16 years’ experience in advising stakeholders of distressed companies.
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