Big Interview: Retailers need to stop “just selling stuff”

Westfield shopping centre in Stratford opened with a unique component – a brewery attached to a craft beer bar – as there was recognition by the developer that shoppers wanted a richer mall experience than simply buying more things.

The decision to add a brewpub was quietly influenced by the thinking of Howard Saunders, founder of 22nd&5th, who spoke to Essential Retail ahead of his presentation at RBTE 2018: “Westfield included a brewery and the Great Eastern Market [food hall] because they are fundamental to people. We need food, beer and wine. Craft beer at the time was still undiscovered.”

By adding these experiences Westfield offered something more enticing to people and it is this thinking that Saunders believes lots of retailers are still struggling to deal with: “I’ve been telling retailers for 15 years that they need to have things like food halls [in-stores] but they have been sclerotic, almost frozen, and this has led to failures like Toys R Us and Maplin who just sold stuff.”

Digital centre of the universe

The key driver of this change, according to Saunders, is the smartphone. “We were handed this slab of black glass and it told us we were at the centre of the universe and that everything would come to us. Now we can have any product at the swipe of a thumb. This has raised the question of what is the world of retail for when we have access to stuff through the smartphone?” he asks.

"I’ve been telling retailers for 15 years that they need to have things like food halls [in-stores] but they have been sclerotic, almost frozen, and this has led to failures like Toys R Us and Maplin who just sold stuff"

One route some retailers are taking is to remove friction from the in-store shopping experience but Saunders has concerns that this is “absolutely the wrong thing to do”. “Retailers should add friction. Eliminating friction is stupid. Instead of things like facial recognition, tell us stories, drag us in and seduce us. This has nothing to do with friction. Retailers need to have brand playgrounds where the brands have fun,” he adds. 

He suggests there is a “gravitational pull to gadgets” to fix retailers’ challenges. “Things like artificial intelligence and the Internet of Things with a male tinge are seen as [the answer to] rebooting things. But the answer is the opposite. Just be nice, and have welcoming spaces, it’s about hospitality,” says Saunders.

Creating brand spaces

He cites Nike and Apple stores as examples of having gone beyond simply selling things because pretty much everybody in these stores will own products by those brands: “They are creating brand spaces where people return to the mother-ship.”

This move to more engaging physical spaces – including the likes of pop-ups, crazy physical environments, and collaborations with celebrities - should be embraced by retailers because the reality for the incumbents is that Saunders forecasts there will be some “stunning” brands emerge that have beautiful spaces.

Such has been the seismic shift kick-started by the smartphone that he says retail is forever changed and companies have to accept it is a different world and that they have to acknowledge and adapt their businesses to this new scenario.

“City centres in the future will be bustling with new and interesting things. It’s not going to be back to normal in five years’ time and retailers have to get used to this,” he warns.

But ahead of town centres being rejuvenated Saunders says many cityscapes will follow the template created by Brooklyn in New York City. Following the crash of 2007 he says Manhattan was hit badly but just over the river in Brooklyn it was seen as an opportunity to create a centre of artisan businesses based on a slower, more caring economic model.

This creation of what he describes as “micro towns” on the edge of towns is a phenomenon that Saunders expects to be widely replicated across the UK, which will be home to the types of retailers that have to be physically experienced and cannot simply be accessed via smartphone.