A Nation of Shopkeepers

A Nation of Shopkeepers

target200, 6 High Street, Wells, Somerset BA5 2SG • T: 01749 676767 • E: info@target200.com

Foreword

By Jonathan Reynolds

Yet what also characterises UK retailing is continuous change: at both a large and small scale. The first UK department stores appeared in the 18th and 19th centuries, the first supermarkets in Europe in the 1950s, hypermarkets in the 1970s and major out of town shopping centres in the 1980s. Today, UK retailing delivers nearly 10% of all its sales online and an increasing proportion of this through mobile devices. On a smaller scale, too, innovation and change is part of the daily work of retailers as they constantly seek to meet customers’ needs.

Academic Director of the Oxford Institute of Retail Management (OXIRM), Saïd Business School, University of Oxford

It was not Napoleon who first noted the English preoccupation with shop keeping in 1794, but rather the economist Adam Smith, some twenty years earlier (although apparently both US statesman Samuel Adams and the Dean of Gloucester may have played contributory roles). Yet in describing a nation of shopkeepers, the message from all was crystal clear: the UK’s power came as much from commerce as it did from territorial expansion.

But not all change has been helpful in sustaining a thriving High Street, or a vibrant independent sector.

Retailing has now come to generate 11.5% of the Government’s overall business taxation, including 29% of all business rates, despite only comprising 21% of the rateable value of all commercial property. The economic downturn and the increasing power of both supermarkets and out-of-town shopping centres are leaving our small, independently-owned shops facing very difficult times.

Shop keeping is still critically important to the UK today, in all its scale, variety and diversity. The retail sector underpins the UK economy, generating annual sales of £330bn, equivalent to 20% of the country’s GDP and creating 10% of total employment, with the sector being the country’s largest private sector employer. Within that scale of contribution can also be found enormous diversity and variety: there are nearly 300,000 shops in the UK, owned by some 200,0001 enterprises, meaning that the sector is also home to a real froth of innovation.

Nowhere more so is this the case than in the independent sector: from artisan bakers to flexible convenience stores, or from creative booksellers to innovative internet start-ups. And irrespective of their sector, their size or their channel, the best retailers approach their businesses with hard work and passion for what they do for their customers.

This report is therefore very timely, coinciding as it does with the launch of a cross-industry programme, target200, designed to address these challenges and to transform the prospects of the independent retail sector. It examines the importance of our High Streets to our society and our economy. It makes a compelling case, arguing that the time for action is now and that the power to make a real difference is in the hands of the retail community.

1E nglish Heritage, The Changing Face of the High Street: Decline and Revival, June 2013

Contents Foreword

2

About target200 and MyHigh.St

3

About MyHigh.St

4

Introduction

5

High Streets bring value

6

Independent retailers

9

MyHigh.St/ICM High Street survey

10

Bound in Chains

12

Towns need to act

14

Th online ‘problem’

18

The High Street of the Future

24

Conclusion

25

Appendix

26

2

About target200 and MyHigh.St:

With one in seven shops across British High Streets lying empty, a powerful cross-industry coalition of MyHigh.St, the British Independent Retailers Association (bira) and Rakuten’s Play.com, working with Action for Market Towns and the Association of Town and City Management, has joined forces to boost the fortunes of independent retailers.

Loaye Agabani, Co-founder of MyHigh.St, said: “The High Street is facing its toughest ever battle. This year has seen town centre chains shut more than 30 shops per month as the pressure from online competitors, out-of-town shopping centres and the economic climate took its toll. Independent retailers are currently holding their ground with their focus on service and product differentiation but we worry this is not sustainable as competition grows - we need to take these attributes and help this community thrive, not just survive.

“The collapse of our High Streets will have deep repercussions on communities across the UK. Britain’s High Streets are not just a collection of shops. They are the beating heart of our towns and cities. They are places to meet, eat, and socialise. They are places of employment, as well as a platform for entrepreneurial retailers to thrive.

The coalition – called target200 – is launching an innovative e-commerce network that for the first time gives towns a platform to showcase their High Streets and independent shopkeepers an affordable and effective chance to sell their products online.

“After numerous reviews, reports and pilots programmes, it’s time for action. Our website empowers independent retailers to fight back against the inexorable rise of online shopping, showing them that the internet, when used effectively, can boost their business and get money flowing back into their tills.”

The MyHigh.St website allows shoppers to visit their local High Street whatever the weather, any time of the day or night, via their PC, tablet, or mobile phone. A “click and collect” service, as well as a small shops’ loyalty and voucher system, are designed to encourage online shoppers to visit their High Street shops in person.

Alan Hawkins, Chief Executive of British Independent Retailers Association (bira), said:

MyHigh.St was conceived last year by Loaye Agabani, a toy shop owner from Somerset with a big vision. He saw that a network of digital High Streets, showcasing all that Britain’s shopkeepers have on offer, would deliver a compelling shopping experience and a means to attract visitors to towns.

“Traditional independent shops are digging deep to hold their position with a marginal growth in numbers in the first half of this year – but we fear this is not sustainable in the light of the growing challenges they face. Having a showcase tha celebrates our towns as digital and real-life shopping destinations whilst empowering retailers to embrace ecommerce and secure their share of this growing economy, explains why 200 retailers have already signed up to MyHigh. This service is good for shoppers, good for retailers and good for communities.”

“Our experience in building online retail communities with our community in Japan (representing more than 40,000 shops) shows the importance of the right mix of big brands and engaging independent offers. It is also increasingly about experiences in the form of content.

“Wherever you retail this is about balancing function and experience.

“High Street stakeholders should seek to deliver a coherent strategy that blends the essential and the anticipated with the exciting. We have learnt in the online market from the real world, the real world can also learn from us.”

Shingo Murakami Managing Director, Rakuten’s Play.com 3

About MyHigh.St

Founded in early 2012, MyHigh.St delivers a dynamic online sales and showcase platform for retailers - and towns - offering nationwide reach and sales opportunities through its central marketplace. Where the service stands out is in its focus on local.

The platform not only delivers e-commerce for independent retailers but it aggregates retailers and service suppliers within their own online high street. Scalable to accommodate thousands of High Streets, each benefits from an online showcase attracting new visitors to the town, generating additional revenue streams and championing local communities.

The platform has been Beta tested over 12 months in seven towns and with 200 retailers across the UK. Drawing on feedback from industry, retail and consumer focus groups the service is being refined for national roll-out to maximise the benefit of online profiling with bricks and mortar traffic.

4

Introduction

By Loaye Agabani

The High Street is facing its toughest ever battle.

The very public collapse of retail giants such as Woolworths, HMV, Comet, Blockbuster, Jessops and Peacocks have dominated headlines and have kept retail issues at the forefront of the news agenda.

Britain’s High Streets are not just a collection of shops.

They are the beating heart of our towns and cities. They are places to meet, eat, and socialise. They are places of employment, as well as a platform for entrepreneurial retailers to thrive. They also provide a diverse retail offer giving consumers more choice.

High Street shops closed at a rate of 18-a-day during the first half of the year, according to a study of 500 UK town centres from accountants PwC2. The pressure from online competitors, supermarkets, out-of-town shopping centres and a tough economic climate is transforming Britain’s town centres faster and more drastically than at any other point in their history.

To maintain our town centres as sustainable social and economic entities we need to keep open the independents that are already there and encourage more to open.

This report looks at the value of our High Streets. Many have predicted its death and many have disregarded its value to the economy and society. We disagree. Recent figures are cause for optimism, with people choosing local town centres over out-of town shopping complexes. July 2013 footfall figures show High Streets rising by up 2.3% with out-of-town only rising by 0.9% (footfall in shopping centres fell 2.3% in July).

Independent stores are especially fighting for survival.

Figures from the Local Data Company and British Independent Retail Association show traditional independent shops are declining at the fastest rate ever with a loss of nearly 200 shops in the first half of this year.3 As a nation, our shopping habits have transformed dramatically over the past decade. According to IMRG Capgemini e-Retail Sales Index, consumers spent £78bn online last year. Sales through mobile devices increased 304% in 2013 over the previous year and now £1 in every £8 spent online comes via mobile or tablet devices.4

We believe there is huge value in our High Streets – to the local community and to the local economy. If you strip the High Street out of towns we will be living in soulless conurbations bereft of social interaction.

As we work with our friends at bira (British Independent Retailers Association), Rakuten’s Play.com, Action for Market Towns (AMT) and Association of Town Centre Management (ATCM) to provide one solution to the High Street challenge, this report sets out why technology, seen by many as its greatest enemy, can actually help save the High Street.

For the purposes of this report, we conducted some consumer research and asked the nation for their thoughts, feelings and expectations for the UK’s High Streets.

Our research showed that a third (32%) of people don’t think the High Street has a future and half of us (50%) are not proud of our High Street. Yet four in ten (43%) of us are scared of losing our High Street and 70% believe that it has a future. Our High Streets currently aren’t working for us but it is fair to say there is a desire to re-invigorate them rather than accept demise.

2 Local Data Company research for PwC, September 2013 3 Local Data Company research for Bira September 2013 4 IMRG Capgemini, £87 billion to be spent online in 2013, 17 January 2013

5

High Streets bring value

Economic benefit

We are in no doubt that the UK’s High Streets add value.

Most of what’s been said about the High Street has been in the context of the current economic environment, yet High Streets are more than a collection of premises engaging in trade. They are the focal points of our towns and cities and serve to bring the community together.

They add to a community’s sense of pride and wellbeing.

They also offer a platform for innovation and growth.

A successful High Street directly impacts the local economy. High Streets provide jobs, services and income for the local community.

Independent retailers in particular have a tendency towards the use of local suppliers, rather than national contractors, for services from fittings to cleaning and in the procurement of goods. This trend with an increasing consumer focus on ‘slow’ produce and local sourcing is set to accelerate further.

Entrepreneurial driver Tomorrow’s new products and trends are being developed and launched by small independent companies which spot gaps in the market. They are also the big companies of tomorrow.

Research by the Centre for Local Economic Strategies shows that for every £1 spent locally, around 50p to 70p went back into the local economy. For the same £1 spent out of town or online, only about 5p trickled back to the community.5

In 1894, Michael Marks acquired a permanent stall in Leeds market and invited Thomas Spencer to become his partner. Thus Marks & Spencer was born. Charles Henry Harrod established his business in 1824 by opening a small shop at 228 Borough High Street. This went on to become the world famous Harrods department store in Knightsbridge. More recently, Paul Smith opened his first shop at 10 Byard Lane, Nottingham in 1970. He now operates stores across the globe. Anita Roddick opened the first Body Shop in Brighton in 1976. Today, the company, now part of the L’Oréal corporate group, has 2,400 stores in 61 countries. And Levi Roots who started selling his barbecue sauce in Notting Hill’s Portobello Road has seen his reggae reggae sauces old nationwide through Sainsbury’s.

A vibrant High Street has a direct impact on the community, reflected in key economic indices, including its property prices. Like good schools, and transport links, a thriving High Street is a big pull for homebuyers and new settlers. Inevitability this will lead to increased spending power on the High Street and, with effective management of the area, a virtuous circle as new stores open up and new housing is encouraged to grow the town.

Clearly, for many entrepreneurs, the High Street is a great place to start. With the next generation of retailers using Pop-Up-Shops, market stalls and concessions as a way to test the market, the loss of the High Street would have far reaching implications for our economic and social mobility.

5 Federation of Small Business, Local Procurement Making the most of Small Business One Year On, July 2013 6

High Streets bring value

Employment opportunity

According to Yolande Barnes, director of residential research at Savills estate agency:

The retail sector employs more people than any other private sector industry, and is a major source of jobs for younger people. Many of us will work on the High Street at some point in our careers, most likely at the very start, be it serving teas at the local coffee shop or sweeping floors at the local hairdressers.

“A good High Street has a real sense of place.

It also helps if there’s a reason to visit other than shopping - for example, if it’s picturesque.

This creates accidental footfall. And there is a positive correlation between a successful High Street and property values.”

The retail sector employed a total of just over 3 million people in 2012, around10% of the Great Britain total.

MyHigh.St research showed the single most common cause of concern about the closure of independent retailers is the loss of jobs that would result [52%). (August 2012, One Poll).6

Mark Hayward, Managing Director of the National Association of Estate Agents (NAEA), agrees:

More than 1.25 million people employed by independents7 and many of them under 30, it is clear that independents will play a big role in getting young people into work. Over a million young people are currently classed as NEET - not in employment, education or training – according to the Office for National Statistics.8 We clearly need to support our High Streets as they are vital for local employment.

“A vibrant High Street is certainly a draw for many buyers. Location is usually a top priority for house hunters, and easy access to a variety of shops is likely to increase the salability of a home.

If a desirable high street is coupled with access to good schools, prices of family homes in particular could benefit significantly.

“NAEA agents recommend that buyers should always explore the area around a property during the day and in the evening to get an overall feeling for the neighbourhood before committing to a purchase.”

6O ne Poll for MyHighSt, consumer survey, August 2012 7 Figure taken from Bira member average multiplied with LDC shops total. 2012 8 Office for National Statistics, Young People Not in Education, Employment or Training (NEET), August 2013 7

High Streets bring value

Social value Where, and how, we live has an impact on our happiness.

A thriving High Street inevitably adds to the wellbeing of a community. Picture a town without a High Street and you envisage a commuter suburb with no services or facilities.

Unsurprisingly, the top 10 happiest places to live as defined by this survey, including towns such as Harrogate, Truro and St Albans, all profit from bustling High Streets, full to the brim with independents and chains alike.

The area in which a person lives is a key factor that helps to determine a person’s wellbeing as defined by the ONS Happiness Survey in 2013.9 Their analysis suggests that the region where we live affects our personal happiness.

Similarly, those on the latter end of the list suffered from the opposite fate. Areas like Dudley, Enfield and the East of London all suffer from High Streets that are nearing extinction. This correlation between a thriving town centre and higher levels of happiness cannot be ignored.

Separately, the Happy at Home index published this year10 also cited the amenities, recreation and neighbourliness in our local areas as one of the three main factors determining exactly what makes us happy at home. Our social attachment to the area was given as equally important in defining where we choose to live, as the emotional and physical attachment to the area. The result was a unique insight into the emotive relationship we have with the place we call home.

Oldham, a town well known for its deteriorating town centre, featured at the bottom of a similar list measuring regional wellbeing. This was directly attributed to the area in which they live, in which people in Oldham revealed their unhappiness due to a lack of things to do, with the town scoring low for amenities and recreation.

Enterprise, economy, employment, happiness, community and well being. Some of these quantifiable, all part of the mix that sustains and enhances our sense of self and self-worth. And all making an absolutely clear cut case for the significant and real value of each and every High Street, town square and weekly market, and the businesses that bring them to life.

The social attachment to our local area far exceeds the four walls of our own home, into our local area, and into our town centre.

9O ffice for National Statistics, Measuring National Well-being – Review of domains and measures, 30 May 2013 10 Rightmove, Happy at Home Index, 27 March 2013 11 Daily Mail, It’s not grim up north: Happiness survey finds 9 out of 10 unhappiest towns are down south, 14 February, 2012 8

Independent retailers are at the heart of the community

“Being a High Street retailer means being physically, and emotionally, at the heart of your community,” says Pip Thornton, owner of Junior Toys in Wells, Somerset. “This really makes a difference to how we work and think – and it is what makes being a shop owner fun.”

Unlike the large chains, Independent retailers tend to use local contractors, ensuring that money is invested into the community.

“Our suppliers do include the mega brands but they also include the likes of local handcraft dolls house makers. This means money that we generate stays in the local area creating employment and good will networks.

“We also employ eight staff [on rotation!] from school-leavers to back-to -workers who want flexibility so they can continue with studies and other obligations. This year we gave a local resident the opportunity to build their own business setting up a new Pottery studio in a vacant room on the premises.”

Pip also provides raffle prizes for local community events and is a member of the local Chamber of Commerce, helping to organise activities that bring the market town together.

“And of course our doors are always open - with a real mix from kids looking for the latest craze to grandparents wanting the advice that only an independent store can give,” she says.

“You stand and talk, catch up with friends and enjoy the buzz that the High Street brings.”

9

MyHigh.St/ICM High Street survey; September 2013

To what extent do you agree with: I am scared of losing my high street

We wanted to get a better understanding of the value of the High Street to the people that matter most: the public.

We have heard from all sorts of commentators as to what they think about the High Street: politicians, economists, journalists, business leaders and marketing consultants have all given their thoughts.

3% 22%

Agree

But what about the people of Britain? What do they think?

44%

We enlisted ICM Research to conduct a consumer survey and we asked 2,000 people nationwide what they thought about the current state of the UK’s High Streets.

Neither Agree or Disagree Disagree Don’t Know

32%

The research found that, sadly, half of us (50%) are not proud of our local High Street. Just a third (34%) are proud and the remaining 15% are unsure. Yet the High Street is deemed an important factor about where we live, with four in 10 of us (39%) believing that a thriving High Street is an important factor about where we live.

Potential loss of our high streets is a cause of worry especially for 45-54 year olds

Though the majority of us are not proud of our High Streets, 43% are scared of losing our local High Streets. The figure is even higher for women: half (49%) of women are scared of losing their High Street, and the older generations care more than the younger ones – half (49%) of 55-64 year olds are scared about losing their High Street compared to just a third (34%) of 18-24 year olds).

To what extent do you agree with: I am scared of losing my high street 45s to 54 1% 18%

It’s clear that for many of us, High Streets are an important part of our local communities. The key priorities for us are a sense of community (54%), good local businesses (46%), good schools (45%) and a thriving High Street (39%). The High Street and what it delivers is, for many of us a central part of our local area.

Agree 50% 31%

10

Neither Agree or Disagree Disagree Don’t Know

Over half of us (56%) think there is not enough choice on the High Street. Four in 10 (44%) of us think there is a lack of originality in the things chain stores sell and half of us think they all offer similar things (49%). A third of us (33%) believe that the staff are often unfriendly, and a third of us (32%) think there is overcrowding on the shop floor.

What is important to people in their local area?

54% 46%

Over a third of us (37%) shop at chains out of habit. This is especially true for younger shoppers: six in 10 (58%) of 18-24 year old shop at chains versus less than a third of the over 65s.

45% 39% 30%

8%

9%

The most important factors consumers look for when choosing which High Street to shop on are: a mix of independent and chain stores (59%), good restaurants and coffee shops (36%),and a High Street that is well known (31%).

7%

Don’t Know

Nothing

Other

A strong sense of identity

A thriving high street

Good schools

Good local businesses

A sense of community

We also wanted to get a sense as to whether recent headlines have affected consumer attitudes.

The research found that nearly a third of us (30%) are more likely to shop at small, independent stores in the wake over stories of some large businesses avoiding paying corporation tax. Nearly half of us (45%) think that as consumers we trust what High Street chains say too much.

See Appendix for full research

11

Bound in chains

Some of Britain’s best known names are chain stores found on our High Streets. The prevalence of chains, however, is creating less choice for consumers.

In 2012, there were more than four million independent businesses across 700 towns. Collectively, they have an immense potential to deliver good to their communities.

While this model seemed to bring benefit to the High Streets during the credit-fuelled boom years, damage was being done as chains squeezed out independent retailers. Towns like Salford, in Greater Manchester, have felt the impact more than most. In September 2013 the Manchester Evening News12 reported that just one in four retail outlets in the city are not part of a chain, the lowest rate in England and the fourth lowest in the UK.

Recent figures are cause for optimism, with people choosing local town centres over out-of town shopping complexes. July 2013 footfall figures show High Streets rising by 2.3% with out-of-town, only rising by 0.9%. At the same time, footfall in shopping centres fell 2.3% in July17.

Breaking the chain habit Chains play an important role in our communities and are a valuable part of the retail sector. However, there needs to be less dependence on chains especially during these economically challenging times.

Many towns that don’t enjoy an affluent community are more likely to be taken over chain stores, who can offer economies of scale at the cost of choice.

In the past couple of years, however, we have also seen a quiet but significant revival of independent shops challenging the chains, with over 3,000 more independent stores opening than closing.13 The current retail environment, however hostile and challenging, is creating a multitude of opportunities for new entrepreneurs entering the retail space.

We have seen that High Streets need to work not just for retailers but for the communities surrounding them. This means encouraging independent retailers and creating the right environment for them to thrive.

Whilst the Government has commissioned numerous reports, the power to make change lies with the retailers as collectives and with the town stakeholders. Practical steps, from business rates to National Insurance, Corporation Tax and VAT, can be driven centrally engineered to deliver a more level playing field. Other practical steps need to be delivered at town level and that needs to happen now whilst independents remain a significant force.

Addicted to chains We are nation of chain shoppers. The nine largest supermarkets hold 95% of the food and drink market despite only having 17% of the total retail space in this sector.14 As consumers, we are more likely to shop at the larger chain stores. The reasons for this are many, perception that larger chains provide better value and are more convenient mean that we drift towards chains for our regular purchases.

According to bira, independents are still saving the High Street, but growth is slowing.

Town centre independents continue to open more shops than are closing, making up for closures of chain outlets and keeping the vacancy rate from worsening – but only just. New research with the Local Data Company (LDC) shows that 8,181 independents opened and 7,329 closed in the first half of 2012, a net increase of 852 stores. In the whole of 2011 the net gain was 2,564 meaning that the net gain has slowed from 2.4% to just 0.8%.

There is a growing movement to support our independent stores.

According to Live Shop Local16, £1 spent locally is worth at least 10 times more to the local community than if it were spent elsewhere.

Another benefit of shopping locally is that local business owners are more likely to live within the area and so are also stakeholders to the community’s interests.

12 Tom Brooks-Pollock, Salford in chains: City has lowest choice of independent shops, survey finds, Manchester Evening News, 4 September, 2013 13 Local Data Company research for bira, September 2013 14 Kantar Worldpanel Data, 12 May 2013 16 Federation of Small Business, Local Procurement Making the most of Small Business 2012 17 Local Data Company research for Bira, September 2013 12

Bound in chains

Research published by bira18 in October this year showed • Independents now account for 67% of all retail and leisure units in Great Britain.

• Scotland (+2.3%) and the West Midlands (+1.2%) showed the greatest increase of Independents • The North East has shown the greatest decline in Independents at -1.35% versus +2.23% in 2011 • Barnes in London has the highest percentage of independents at 97%.

• Telford has the lowest percentage of Independents at 23% • Comparison goods retailers have shown the greatest decline in fortunes with a growth in 2011 of +1% slowing down to +0.1% in first half of 2012 • The service sector has shown the most growth at +1.9% in the first half of 2012 but this is has slowed from +5.0% in 2011. Key growth areas have been pawnbrokers, take-away food shops, health & beauty shops, tattoo & piercing, nail salons and charity shops

It remains to be seen how effective initiatives like this will be, though it does help to illustrate how small changes on the part of consumers can have a significant impact on communities.

There is clearly a huge regional difference in how independent stores are performing. Towns such as Burslem in Stoke-on-Trent and Leek in the Staffordshire Moorlands are implementing a scheme to encourage the local community to spend £5 of their weekly shopping budget in their town centre instead of online or in the town’s chain stores.

The town of Burslem has suffered a great deal over the past decade: it has about 30 empty shops and the closure of the Royal Doulton factory in 2005 hit it hard. The closure of the tourist attraction Ceramica in 2011 has only added to its woes. The theory is if every adult living within one mile of Burslem town centre spends £5 with their local independent shops and businesses, it would be worth an extra £6m a year to the local economy.

18 Local Data Company research for Bira, conducted October 2012 13

Towns need to act

It is clear that we have reached a point where action is needed to encourage our High Streets to flourish, especially our independent stores. Change needs to happen on a local level as each High Street faces its own unique challenges which can only be overcome by local shopkeepers and shoppers.

As Chris Wade of Action for Market Towns says: “We need to build the brand and image of places, creating town centres as destinations for a range of leisure, cultural, entertainment and raising awareness of its focus and distinct offer. Many shoppers want to see help for independent businesses with economic growth built from within communities and not reliant on national chains.”

Relying on central government to implement policies that will help the High Street cannot be the only solution to re-invigorating our towns. Business leaders have recently criticised the Prime Minister’s decision to sack the existing minister for High Streets, yet there is little evidence that the solutions proposed by central government in recent years have had any real impact. In an age of localism, it is becoming clear that there is no longer a one size fits all solution to encouraging choice.

Celebrating our High Streets’ identities For many High Streets, capturing local spend is a significant challenge as many turn online and to out of town centres for products and services. To successfully compete against the lure of these, High Streets need to be destinations that reflect our communal identities. Towns such as Bath, York, Leeds, Birmingham and Manchester have transformed over the past 10 years. Portobello Road and Brick Lane in London have successfully established themselves as the definitive ‘west’ and ‘east’ London shopping experience.

Increasing footfall and ensuring that each High Street is beneficial to the region it serves must be delivered from the bottom up. Central government will always have a role in providing the right advice and policy framework, however local communities must be empowered to ensure that their local High Street is vibrant and serves their distinct needs.

Encouraging local shops, both independents and chains, to reflect the distinct characteristics of a community ensure that the High Street maintains a marketable brand that is more compelling than any specific product or service than is offered. Many more people flock to Portobello Road for its distinct brand as opposed to the chance to buy a cupcake or piece of antique furniture.

Actions needed include: • Creating strong identities for our local towns and High Streets • Encouraging growth of independents by supporting them from a consumer level to a town planning level • Enabling retailers to work collaboratively and provide support by sharing resources • Embracing technology rather than competing with it

Town planners and local government have a key part to play in ensuring that their local High Streets are marketable as a whole and appeal to visitors and consumers. It is imperative that distinctiveness and branding should be part of the planning process.

14

Towns need to act

Business Improvement Districts A Business Improvement District (BID) is a scheme to improve a commercial area, such as a town centre through additional services or new initiatives.

Government legislation enabling the formation of BIDs, was introduced into England and Wales in 2003, empowering businesses to ‘raise funds locally to be spent locally’ on improving their trading environment.

BIDs are funded through a nominal levy calculated on the rateable value of all businesses within a defined area. There are now 160 approved UK BIDs. One such BID was implemented by Truro, in Cornwall. Truro’s business community has recently voted to keep the scheme running in the city for the next five years. It was the first scheme of its kind in Cornwall, which saved the city’s Christmas lights before going on to set up several cultural festivals.

15

Towns need to act

Successful High Streets

Where: Harbour Street in Whitstable, Kent

Where: Cheep Street in Sherborne, Dorset

According to: Janet Street Porter describes Whitstable: “It has great restaurants, great walking – and of course, the sea.

I love all the beach huts down by the water, the town is family-orientated but fashionable, and just has a really nice laid-back atmosphere. What’s more, the high street has been nicely revitalised20.”

According to: Rachel Billington in the Daily Telegraph ‘Reinventing the high street: how Sherborne evolved 26 June 2013’19 History: Thomas Hardy called Sherborne, Sherton Abbas, the town has existed since the 12th century. In Saxon time it was the capital of Wessex and two kings are buried in the Abbey.

According to the Lonely Planet:21“Perhaps it’s for the oysters, harvested since Roman times… Maybe it’s for the weatherboard houses and shingle beach… Perhaps it’s for the pleasingly old-fashioned main street with its petite galleries, been-there-forever outfitters and emporia of vintage frillies… But, most likely, it’s for all of these reasons and more that Whitstable has become a weekend mecca for metropolitans, looking for an easy escape from the city hassle. Between waves of Londoners, the town lapses back into fishing-town mode, with a busy harbour and ice-chilled fish market supplying Kent’s restaurants.

Steadfast locals also play their part in keeping things authentic, with assorted campaigns in recent years preventing some of the biggest retail names from setting up shop, thus preserving the town’s eccentric, artisanal air.”

Challenges: - Threat from Tesco’s who want to open a superstore (11,000 locals signed a petition against it) - In recent years Costa, Fatface and New Look have opened stores on the high street - High shop rents - Reduction in local bus services Branding/rebranding: - Sherbourne has a lot of historic interest with 17th, 18th and 19th century architecture set in unspoilt streets.

Medieval buildings abound in the town - Sherbourne has a high number of independent shops from a violin repairer to a made-to-measure corsetiere.

Chain stores are in the minority - Sherborne holds twice weekly markets - There are numerous local festivals and regular art fairs - Pedestrianisation of Cheap Street, which gives freedom from traffic at the busiest time of day

History: A seaside town, famous for its oysters, which have been harvested in Whistable since Roman times. In 1830 it was in Whitstable that the world’s first steam-hauled passenger and freight railway service was opened.

Challenges: - Whitstable has been a victim of its own popularity, with numerous applications submitted for further developments - Warm water created by offshore wind farms are attracting killer starfish which are threatening Whistable oyster beds, and through that, its tourist industry - According to an article in the Whistable Times shop rents have increased 100% - Locals have protested against chain stores such as WHSmith and Morrisons Branding/rebranding: - Every July, Whistable hosts the world famous Oyster Festival - Whistable is a stop on the Coast to coast cycle route - Whistable is known for its high number of independent shops - There is http://www.ilovewhitstable.com which includes a regular blog about event and attractions of Whistable

20 The Daily Telegraph Online, The Telegraph Travel Guide, 5 September 2012 21 Lonely Planet, Great Britain Travel Guide, June 2011

19 The Daily Telegraph, Reinventing the High Street: How Sherborne Evolved, 26 June 2013 16

Towns need to act

Where: Bold Street in Liverpool

The Times top 10 high Street towns23 (27 January 2013)

According to: Peter Stanford praises Liverpool as a city ‘reinventing the high street: resuscitating Liverpool’s heartbeat22’. English Heritage uses Bold Street as a case study of a high street renewal project where the local authority and other partners have intervened to reinvigorate historic shopping streets

• Tenterden, Kent • Marlborough, Wiltshire • Skipton, North Yorkshire

History: Bold Street was originally laid out as a ropewalk in the 1780s, helping the manufacturing of rope for sailing ships.

The standard length of rope needed for sailing ships was equivalent to the length of Bold Street.

• Alnwick, Northumberland

Challenges: - Liverpool’s position as a prime retail location dropped from 3rd to 17th by the mid 1990s - Poor provision of major anchor stores - Threat from nearby Liverpool One, one of Europe’s leading multiplex retail and leisure destinations

• Totnes, Devon

• Whitstable, Kent • Shipston-on-Stour, Warwickshire • Lincoln • Marylebone, London

Branding/rebranding: - Bold Street has used to historic character to establish an independent offer, complementing the mainstream multiples located nearby - B old Street continues to host numerous specialist and independent shops, including a vintage clothes shop, international food store, and independent cafes - ‘Bold Street Festival’ is held every year celebrating Liverpool’s alternative shopping area, including pavement art, a parade from Liverpool samba group, and a ceremonial street clean - Bold Street utilises social media with its own highly active blog and Twitter page with over 7,200 followers

23 Hugh Graham Britain’s top 10 high-street towns, The Times, 27 January, 2013

22 The Daily Telegraph Online, Reinventing the High Street: Resuscitating Liverpool’s Heartbeat’, 3 May 2013 17

The online ‘problem’

Much has been said about the impact the explosion of online retail is having on footfall and the High Street.

“Omni-channel retailing” that enables independents to compete is more than just m-commerce alongside a shop and a website. Businesses need to have a single view of stock that can be purchased through any channel.

Mark Prisk MP, the former Housing and High Streets minister, said in May this year that shop owners could no longer ignore the increase in people doing more shopping over the internet. The minister said retailers had to change the way they did business, to appeal to online shoppers who now account for 15 per cent of retail trade.

Almost half of consumers online want retailers to deliver genuine omni-channel retail experiences over the next five years, a study commissioned by personalisation provider Peerius, has found.

When asked how they would like the retail experience to change over the next five years, 46% of respondents said they “would like retail to combine the best elements of online and in-store to create a single, consistent experience no matter how I shop”. By contrast, just 10% want the in-store experience to be more like the experience of buying online, and 14% want buying online to be more like the in-store experience.

The rise of online retailing has been difficult for many independent stores with capital and cash flow implications for setting up an online outlet and, once established, in driving online traffic. Yet with an increasing number of us spending our cash online, there is little to be gained by fighting against the internet. Instead, retailers need to evolve with technological advances – creating online marketplaces driven by geographic destinations is an obvious step forward, delivering online sales and in-store footfall through effective showcasing.

We are living in the ‘digital decade’. High Streets need to be part of the conversations we are having on social media and therefore must have an online presence.

For our High Streets to flourish, towns as a whole need to embrace e-commerce and m-commerce.

For the future of the UK’s retail landscapes, it is likely that the number of shops will continue to fall – retailers can reach their consumers through the internet and smart phones meaning fewer sites are needed. The more commoditised products will drop out of the High Street retail portfolio. This does not necessarily need to signal the death of the High Street - rather its transformation.

Amount Brits spend online (in billions)

87 78

68

For consumers, the question around online versus a store is largely irrelevant. Whether we are buying a book or a t-shirt, via a shop or a website, the end product is the same. Both shopping on the High Street and hopping online have their own advantages and disadvantages.

Yet those retailers that have a presence across all channels will be those in a much better position to compete over the coming years.

58.8 50.2

24 IMRG Capgemini, eRetail Sales Index, 2008 - 2012 18

2012

2011

2013 (predicted)

Source: IMRG statistics 24

2010

2009

2008

43.8

The online ‘problem’

“ E-commerce and out-of-town retail parks are a threat to the UK High Street only if High Street retailers, town centre and Business Improvement District (BID) managers sit back and do not respond with their own updated offering;

• Sales on the internet are expected to double over the next decade • Britain is the biggest online shopping nation in the developed world, spending £68.2 billion on the internet last year

i t is essential that town and city centres move down the road towards adopting a multi-channel marketing approach, one which connects and integrates e-commerce, social media, web/mobile applications and mobile commerce.

• More than a fifth of mobile internet users have purchased goods or services using their phone • By 2016, 90% of people will have a smart phone compare to 40% today

T he customer journey of today is one that will embrace multiple channels and touch-points; in order to meet their customer expectations, town centres must learn to use all available channels.”

Guy Douglas Digital High Street programme manager Association of Town & City Management

19

The online ‘problem’

Local retailers have fallen behind

UK Retail mcommerce sales, 2011-2017 (in billions) 17.24

While local retailers are a big part of what makes our High Streets so special, they need to learn from their larger counterparts when it comes to technology.

15.06

Despite wanting to shop in bricks and mortar stores – especially boutique and independent shops – consumers are being put off because they simply can’t find them as they have no mobile or online presence, suggests a survey25. 10% say that a lack of mobile/online presence is putting them off as they can’t research key store and product information on-the-go, according to research from app Udozi.

12.16 9.46 6.61 3.85

As research constantly reminds us, UK shopping communities are increasingly moving online. Mobile shopping is already riding the crest of a wave having risen 55% compared with a year ago and even this will seem insignificant compared to the rises predicted over future years.

The good news is that the train is yet to leave the station with many retail sectors yet to see real consumer migration into online purchasing.

Music

55%

Books

35%

Electrical

28%

Housewares

9%

Clothing

7%

DIY

5%

Furniture

4%

Food

3%

Source: http://www.emarketer.com/Article/ Mcommerce-Takes-15-of-UK-Retail-Ecommerce-Sales/100998426

Source: CBRE 2012

25 Survey of 2105 people in the UK conducted

by YouGov for Udozi, May 2013 20

2017

2016

2015

2014

2013

2012

2011

1.34

The online ‘problem’

There are many opportunities to be had including reaching a wide range of consumers who have limited access and allowing consumers to experience the unique shopping experience of a store.

person. And they can do this knowing that they are helping local businesses thrive, not just survive.

“Loaye, who owns a toy shop in Wells, was looking to set up his own website a couple of years ago. Developers wanted two or three thousand pounds for a simple site, but he also found that he needed to invest in search engine and online marketing.

Online need not be inaccessible for independents The costs of going online are a big worry for many independents but there are now various portals that provide a way for shopkeepers to distribute their goods online. By pooling resources and working together cross-channel, like MyHigh.St and Rakuten’s Play.com are doing independent retailers can benefit from the access that being online provides.

“This was his eureka moment. Looking down the High Street he realised that retail success is about sharing - as customers select their destination and then browse many of the shops. As a local retailer there wasn’t a platform that took the High Street community online, but he believed that he could build one and give every retailer the tools to embrace digital technology, not fear it.

A shop focused model

“Our service is open now to all independent retailers who want to get online without cost or risk. We’re creating groups of retailers identifiable by their local High Street.

Whilst many smaller shopkeepers and entrepreneurs remain wary of going online, local governments need to encourage an online presence.

“We are talking to independent retailers, retailer networks and retailer action groups such as bira to bring shopkeepers into the family. At the same time we are also talking to bodies responsible for High Streets and town centres. We have no bidding process and could take any town online, today.

MyHigh.St’s shop focused model empowers High Streets and outlets to build their businesses online, and showcase their unique offerings, rather than delivering a digitised product vending machine which doesn’t allow consumers to enjoy the shopping experience of a High Street. In doing so, High Streets and their residing bricks and mortar outlets are promoted as destinations and hubs to be supported, whilst driving business growth through many touch points with customers.

“We are about levelling the playing field and empowering the tens of thousands of retailers on our High Streets to shape their own destiny. We don’t need funding and we ask for no cash up front. It is a new way of thinking and one that harnesses, rather than hides, from the power of e-commerce and that is why we are also working with the experts at Rakuten’s Play.com.

According to Tim Lewis, Co-founder of MyHigh.St: “MyHigh.St is the UK’s first shopping website designed solely for independent local High Street shops. Its mission is to get money flowing back into struggling shopkeepers’ tills.

“In 2000 49% of all shopping was done on High Streets, last year it was 42%. MyHigh.St is the missing link between High Street and retailer and consumer. We give local retailers the digital tools the chains and supermarkets already have.

“For the first time, shoppers can visit their local High Street whatever the weather, any time of the day or night via PC, tablet or mobile. They can enjoy the personal, friendly and knowledgeable service that characterises Britain’s 245,000 independent retailers online.

“Mary Portas said the traditional High Street was dead — she called for a revolution to rescue local stores. MyHigh.St is that revolution.”

“They can browse and buy the same carefully selected products they would if they popped to the shops in

26 EMarketer.com, mCommerce Takes 15 of UK Retail eCommerce Sales, 20 June 2013 21

The online ‘problem’

“I have seen more customers come into my shop since being online” Grace Haskins opened Bramble and Wild in Frome, in Somerset, in July 2011, and has always struggled with competition from large online retailers.

“Competition from online sellers is always fierce – being a florist especially, with big companies looming over us on Google,” she says.

Yet despite the competition Bramble and Wild has flourished.

Grace’s solution was to capitalise on the opportunities presented by the internet and to sign up to MyHigh.St. “I have my own website but this is a static site. It links through to MyHigh.St to enable my customers to buy within the marketplace and allows my products to be delivered nationally.”

For Grace, making it easier for customers to view her flowers and place orders has made a real impact.

“The site has also driven customers in store and I have had wedding bookings through the site which is fantastic,” she says. “One customer came in with the website on their mobile phone screen, and showed me the bouquet that they wanted and had seen online.”

“I am seizing the opportunities online” Marcus Hickling, owner of Artyfax, jewellery and gift shop in Cromer, Norfolk, has risen to the challenges currently facing independent retailers.

With more and more people shopping online, he decided to take his products online, using sites such as Amazon and MyHigh.St, as well as Twitter and Facebook to boost his business.

“Every independent retailer is asking the same question: how can I get my products noticed online? We have invested heavily in photographic, computer and video equipment to enable us to show ourselves and our products off in the best possible light online,” he says.

“I have also decided to exploit YouTube to demonstrate our products.”

Asked whether he is optimistic about the future of British High Streets, he says: “I believe in the short-term we will see a lot of empty shops. Longer term, however, I think that websites such as MyHigh.St will encourage shoppers to leave their homes and seek out the High Street experience again. The old saying springs to mind: you don’t know what you’ve got until it’s gone.”

22

The online ‘problem’

23

The High Street of the future

His Royal Highness Prince George of Cambridge turns 18 years old on 22 July 2031. What sort of High Street will exist then?

“As referenced in the Tom Cruise film ‘Minority Report’, shops will know who you are individually and suggest items as you enter (via phone, which is now your wallet), just as online shopping sites do today based on your previous purchases.

We enlisted the help of Richard Watson, a future gazer, writer, speaker and thinker who helps organisations to think ahead, with a particular focus on strategic foresight.

“Not that it will be a problem for royalty but most things are much more expensive in 2031! When Prince George comes to pay for anything, there will no longer be cash registers to pay at. Payments will be automated via RFID or similar and digital cash in your iPhone 20. Coins (which by which point would have featured his grandfather, King Charles) will no longer exits – and neither will cheques.

Richard is the founder of What’s Next, a trends report offering commentary on trends in society, business, science & technology, government and the environment.

He is co-founder of Futures House Europe (a scenario planning specialist) and is the author of the bestselling book Future Files (sixteen worldwide editions).

“Giant screens, holographic displays, augmented reality and even aroma pods will make the distinction between real shops and gaming fuzzy and blur the distinction between what’s ‘real’ and what isn’t. Gamification will also make many mundane shopping tasks into forms of entertainment. Nike Fuel (a points system earned by doing activity) might arguably be a foretaste in the area of health. Think, for example, of healthy eating games.

Richard has worked with, amongst others, IKEA, London Business School, McDonald’s, Virgin and Westfield.

Of the High Street of 2031, Richard Watson said: “The High Street of the future will be different from the High Street of 2013 – but rest assured, there will be a High Street in the future.

“No matter when Prince George wants to go shopping, there will be 24/7 availability of everything. There will also be fantastic service or none at all. High end retailers such as luxury fashion brands will put a focus on fantastic service while self-checks outs will replace service entirely at the more every-day type stores.

“When baby Prince George comes of age in 2031, if he fancies a walk down his local Kensington High Street for a spot of shopping, it will be a very different experience from what the street offers today.

“First, there will be a general shift from products to experiences and technology will help fuel the shift. Shops will become more like brand showrooms – in some instances showing physical products that are only available online.

“The High Street will become far more niche and premium with more focus on local shopping and local products.

And inevitably, shop doors will be much wider to accommodate XXXL obese people and mobility scooters.

“And on his 18th birthday, Prince George will surely want to celebrate with a pint. Brits love a drink, and that is one thing that will remain true”.

“Robots in shops will be there to give information and security (this already exists in Japan and won’t be long until robots are seen everywhere from Kensington to Kidderminster). There will also be a shift away from retail’s focus with youth towards seniors. The range of products and the way the products are displayed and packaged will resonate more with a senior audience. SAGA will own a chain of supermarkets.

Street The Hig h ture of the fu

24

Conclusion

Across the UK, the High Street is the familiar thread running through our counties, villages, suburbs and cities. From Wells to Altrincham, we are sure of the presence of the High Street. It’s there to go to for a coffee, to get our nails done, to get a gift for a loved one or our cars fixed. Whilst work needs to be done to ensure they are sustainable, our High Streets are a vital part of our community and should be encouraged to remain as such.

Far from being its greatest threat, we see the internet and the tools of the online world as being integral to the future of the High Street, and the future of independent retailers, helping them to build great brands and great businesses.

Retailing is changing and those shop owners and retail communities who are unable or unwilling to combine the best of the traditional High Street offer with the opportunities that the internet provides will be those that struggle most.

However, those retail entrepreneurs that are able to maximise their use of an online and real world offer, will be those who survive...and thrive over the next decade.

25

Appendix

ICM interviewed a random sample of 2,003 adults across Britain online between 18th and 19th September 2013.

hich two or three of the following are the most 4. W important factors to you when deciding which shop to shop in?

Here are the questions and answers in full:

• Competitive prices: 79% • Convenience: 51% • Having a large range of products: 47% • Good customer service: 44% •B eing able to find items that cannot be found in national chain stores: 16% • Receiving expert advice: 9% • Being owned by local people: 6% • The store being an independent seller: 5%

1. H ere are some things that other people have said about High Street chain stores. Which do you think apply?

• They all offer similar things: 49% • There is a lack of originality in the things they sell: 44% • The staff are often unfriendly: 33% • There is often overcrowding on the shop floor: 32% • Queues for the changing rooms are often too long: 23%

5. W hat do you look for when choosing which High Street to shop on?

2. T here have been allegations in the media over the last few months that some large companies have avoided paying some corporation tax. Have these stories made you more or less likely to shop at small, independent stores on your local High Street?

• More likely: 29% • Neither more or less likely: 53% • Less likely: 6%

• A mix of independent and chain stores: 59% • Good restaurants and coffee shops: 36% •A High Street that is well known, e.g. for fashion, shops, vintage, sports, furniture: 31% • S ervices being available (e.g. hairdresser, bank, shoe repair): 30% • A social place where I can meet with friends: 20%

3. Do you agree with the following statements?

6. Are you proud of your local high street?

• There is not enough choice on the High Street: 56% agree • We trust what high street chains say too much: 45% agree • I shop out of chains out of habit: 37% agree • I think chain stores are an important feature of every High Street: 56% • I don’t think the High Street has a future: 32% • I think the High Street has a future: 33% • I am scared of losing my local High Street: 43% • T he best High Streets are leisure destinations, not just shopping locations: 44%

• Yes: 34% • No: 50% • Don’t know: 15% 7. W hich, if any, of the following are important to you about where you live?

• A sense of community: 54% • Good local businesses: 46% • Good schools: 45% • A thriving High Street: 39% • A strong sense of identity: 30%

26

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Contact MyHigh.St 6 High Street Wells Somerset BA5 2SG Email: hello@myhigh.st Tel: 01749 676767

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