Is retail a drop on the landscape? An Op-Ed by Fiona Carter
The British Retail Consortium recently published figures show a further 0.7% drop, year on year, of tough retail trading.
This continued pressure on our retailers has led to a dramatic change in landscape on our local High Streets. Having lived in the same area of North London all my life, I have witnessed the slow demise of the independent retailer, squeezed out by pernicious rents, online shopping and unreasonable competition from retail chains.
My local high street, which once thrived with small business shops offering a full array of goods and services from builders merchants to greengrocers, has merged into a homogenous strip of mid priced fashion stores, food - chain restaurants, coffee shops and endless charity shops. None of which encourages small creative businesses.
At the other end of the scale in the luxury market, the UK for many years has been dependent on our overseas visitors, the major share coming from the Middle East followed, closely by Asians, Russians, Americans, Europeans and finally domestic customers.
A few years ago Middle Easterners would arrive in Selfridges with their entourages and made sales of tens of thousands, buying several ‘looks’ from popular designers. Now they are spending similar amounts of money but more discerning, happy to buy on the high street as well as in luxury department stores.
What they are looking for are exclusives. At Selfridges we provide them in abundance to capture that market, whether from a watch, phone or dress, this is what luxury is for them.
When brands like Givenchy or Chanel are planning their collections they consider carefully the needs of their global markets, tailoring their collections accordingly. What works in the Middle East will be different from what sells in Asia. Where the middle easterners look for modesty, long sleeves, length and sparkling embellishment, Asians on the other hand have a different aesthetic, buying into accessories and casual sportswear.
Chinese New Year is just round the corner and our young wealthy Asians will be in town looking for the latest luxury trainers, sweatshirts and t-shirts. The fashion brands have recognised this and are on the bandwagon collaborating with sports and music stars alike.
Sports wear is now driving the luxury retail market. Balenciaga’s creative director Demna Gvasalia, originally creator of radical street wear brand Vetements, ran an exclusive trainer with Selfridges taking over their prime site Concept store for 6 weeks to promote it. The luxury market has now opened up to a much younger market.
Every designer has their own trainer now. Stella McCartney has collaborated with tennis star Stan Smith, Virgil Abloh designs for rapper Kanye West’s street brand Off-White, all appealing to the growing luxury millennial market.
To compliment the buying experience luxury stores are looking to how they can entertain their customers. With such a growth in high end street wear, Selfridges have built a permanent fixture skate bowl in their newly developed menswear department, for customer use with in-house professional skateboarder on hand to entertain with flips and grabs when necessary.
It would be refreshing to write this without mention the B-word but we cannot underestimate the impact Brexit this will have on our luxury market.
Talking with Matthew Fletcher, Department Manager at Selfridges Avant Garde, he said,
“Initially, when the Referendum result came out in 2016 the pound dropped and we saw a spike in sales. As we head towards 29th March this no doubt will happen again. What follows is that Europeans will be more likely to shop in UK taking advantage of a weak pound against a strong euro and although our sales will increase the tax that up till now only goes to those outside EU will now go back to EU leaving us with less net profit.”
The fear is that with our inevitable higher prices and tariffs we will not be able to compete with Europe. As a result our luxury customer will be less inclined to come to London and shop in Paris, Rome or other European cities, offering more competitive prices. Relying on exclusives won’t be enough.
Helen Dickinson Chief Executive of BRC told The Retail Gazette, “ We desperately need certainty.” She added: “This really is crunch time and politicians must come together around a workable solution that safeguards consumers from the costs and disruptions of new constraints on the tariff-free and frictionless trade we currently enjoy with partners in the EU”
We are all holding our breath and our hope for the luxury UK market is that our history of quality product and service will see us through.