In-store leisure: dispensable add-on or a bold leap forward?
Walk into any department store in the North West these days and you’re just as likely to find a coffee shop as you are men’s suits or the women’s perfume section. Move Commercial investigates whether this increasing clamour for in-store leisure is a dispensable add-on or the way forward for high street retailers coming under ever-increasing pressure from mobile and online shopping.
Words by Lawrence Saunders
High streets and shopping parks have long understood the need to offer customers a fully rounded leisure experience.
Restaurants and cinemas are as commonplace in most retail parks as clothes shops and toy stores, but in recent years it appears things have shifted up a gear with more high street retailers incorporating a leisure offering directly into their previously one dimensional stores.
This leisure-led retail trend made headlines earlier this year when House of Fraser (HoF) appointed a new chief executive who boasted zero retail experience.
Despite his apparent lack of trade savvy, HoF was adamant Alex Williamson, who has spent the last nine years at Goodwood – the group behind the Goodwood Revival and Festival of Speed – was the right person to lead the “transformation of the business”.
Williamson’s hiring is central to HoF’s plans to turn its shops into “lifestyle-led experiences” by adding restaurants, cafés and more beauty services.
Another well-established high street name which looks to be following suit in focusing more on its leisure offering is Debenhams.
The department store group revealed plans aimed at boosting its appeal as a ‘destination’ shop.
“Debenhams in Manchester has got a coffee shop right on the ground floor window line. In that past that would have been prime retail space.”
The changes are part of chief executive Sergio Bucher’s £1 billion ‘Debenhams Redesigned’ strategy, which it’s hoped will revive the almost 250-year-old company’s flagging fortunes.
Bucher has stated he believes the future lies in the idea of ‘social shopping’, which perceives shopping as a “fun and sociable activity” with friends and family.
Meanwhile clothes chain New Look, which in June reported a drop in full year profits and sales, recently announced it’s to launch a new 24,000 sq ft flagship store in London featuring a hair salon and make-up bar – a model which could be rolled out nationally if successful.
The firm’s chief executive, Anders Kristiansen, says the move is in response to a “shift towards more experience-led purchases” from consumers.
Tempting customers to spend more time in-store with the draw of coffee shops and the like is nothing new. However it certainly seems like the pace of change has gathered momentum in recent times.
“All of these [shops] are competing for people’s money and, to a certain extent, a lot of them are saying ‘we’ve got to have it because everyone else has got it’,” says John Pal, senior lecturer in retailing at Manchester Business School.
“The Debenhams in Manchester, for example, has got a coffee shop right on the ground floor window line. In the past that would have been prime retail space but now they’re using that space for something else because they want to get people to spend a lot of time in the shop.
“Similarly if you take a company like W.H. Smith, what it has done is taken out product which doesn’t give it a lot of margin and replaced it with a coffee shop, a concession or a post office.
“It’s undoubtedly the case [that the trend will continue]. Retailers are going to use their stores as showrooms.”
Pal admits he found HoF’s choice of chief executive “very unusual”, mainly because in the past, retailers have chosen from one of their own.
Similarly the appointment of Richard Solomons, chief executive of InterContinental Hotels Group, as a non-executive director at Marks and Spencer, alongside Tesco’s hiring earlier this year of Unilever’s Alessandra Bellini as its new chief customers officer, are further signs that retailers are thinking a little differently when it comes to recruitment.
“The common theme amongst “ these appointments is that they know customers – they’re consumer marketers,” adds Pal.
“What they’re looking at is how consumers are spending their time, spending their money and where they are doing it, and thinking ‘what can we do to make [visiting the store] a better experience?’”
One way many major high street retailers have been attempting to make a store visit a ‘better experience’ has been through the seemingly omnipresent coffee concession.
“Coffee culture of the UK has come more in line with Europe and America,” says Jonathan Owen, commercial director at SK Real Estate.
“People will specifically go to a location for that specific type of coffee so increasingly retailers are drawing customers in off the back of their food offer – not just to the store.
“Retailers know that their customers eat, drink and enjoy coffee so they’re just capitalising on that and giving them what they want in-store.”
It’s not just large high street retailers which are looking to offer broader experiences for their customers. Smaller traders have also been following the trend.
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In Liverpool, on the busy shopping thoroughfare Bold Street, several independent retailers have been making some leisure-inspired additions, including REX: The Concept Store, which until earlier this year, had been offering independent retailers a space to sell their wares in the former HMV unit.
One of these traders had been local roastery and coffee shop 92 Degrees Coffee, which had its own popular concession at the front of the store.
REX closed in January with plans to open in a new unit in the near future, but this isn’t the only example of retailer’s diversifying their offering on Bold Street.
Long-standing casual fashion outlet Resurrection recently put forward plans to open a café on its first floor, complimenting its existing hair salon.
According to proposals submitted to Liverpool City Council, the owners want to utilise a small area of the shop to serve teas, coffees, juices, alongside prepared food such as sandwiches, soups and cakes.
It appears the penchant for in-store leisure choices is here to stay.
Or as Owen puts it: “The internet is eating in to the retailing industry when it comes to ordering books, clothes, records etc. but you can’t really do that with a hot cup of coffee, can you?”
“Retailers know that their customers eat, drink and enjoy coffee so they’re capitalising on that and giving them what they want in-store.”