EY hosted London First’s kick-off discussion on what London should be doing to support the long-term future of retail. EY Partner and panellist Julie Carlyle reflects on the discussion.
UK retailers are clearly under pressure. Structural changes throughout the industry require them to run parallel omni-channel operations, invest in integrated systems and fight for new talent. Similarly, the political and economic impacts on currency, labour costs and disposable incomes mean retailers must be constant innovators if they want to maintain their share of the consumer wallet. Together, increased overheads and cautious spending are tightening the margin vice on retailers.
London retail is no exception to this trend. Yet, it faces the added complications of fighting for its share of the global retail market and share of geographical space.
Far from honing in on technicalities, panellists and the audience dissected the wider concept of retail as an essential service. Whether groceries, food & beverage, online vs. physical stores or delivery solutions, it is obvious that making retail options convenient, innovative and accessible impacts quality of life. It’s important to get retail right if we want to ensure a liveable, vibrant city for Londoners.
After polling members on the key issues, what came out on top?
The retail and housing development relationship – There is a clear symbiosis between the two; retail anchors great places to live and housing brings customers closer. How does London strategically plan to ensure the right balance?
Infrastructure, infrastructure, infrastructure – Retailers want to be where consumers find convenience. Where infrastructure investment leads, footfall and sustainable environments follow.
Physical retail is not doomed – Nobody present predicted the slowdown of the high street. But the function of the shop floor and its relationship with online might change. It’s telling that dominant online retailers are acquiring physical space while some traditional bricks and mortar retailers have decided to stay offline. So how do we keep planning flexible enough to adapt to potential demands?
Change is nowhere near finished – We’re only just seeing the beginning of services like pick-up points and automated delivery – retailers are still finding their feet with regards to use of customer data and intelligent retail. Should there be broader discussion of issues like the balance between data-driven, personalised experience and online privacy? How do we drive forward the right tech infrastructure to keep pace with Londoners’ expectations as consumers?
The B-word – Brexit’s effects, particularly on currency and workforce, have the potential to severely disrupt the industry. Members agreed that they should continue to make the case for stability on behalf of Londoners working in the sector and London residents’ already hard-pressed wallets.
How could London retailers weather the storm? By investing in innovation, focusing on operational efficiency and developing agile and resilient business models. Retailers must also look to generate sustainable, long-term value from their intangible assets, such as brand equity, across all channels. This will mean thinking outside traditional models and the constraints of tangible physical and financial capital.
London should do its part by planning and allowing for the kind of flexibility that will help the sector create a liveable, workable, adaptable city for all.
I look forward to seeing the outcome of future workshops as London First explore how to scale up existing local best-practice, as well as recommendations on interventions or policy change that could be promoted via the London Plan or London First’s Skills Commission.