One message that came though loud and clear from this year’s MAPIC was that physical retail space has a very solid future. The binary distinction between the virtual and the real worlds of retail has gone for good. What we’re now seeing successful retailers pursuing is the creative orchestration of both worlds. They are creating environments in which customers can seamlessly move between the two, using the strengths of both to their maximum in order to offer unique experiences, along with the benefits of convenience that consumers demand.
Not surprisingly, physical expansion is at the forefront of many retailers’ strategies as they seek to harness the power of digital and physical convergence for their brands. But in the rush to the new, there is a danger that the needs of legacy assets can be overlooked. One of the panellists at Jones Lang LaSalle’s Redefining Retail Places session at MAPIC highlighted that it was important to make sure that the right decisions about existing stores were taken – and this needed at least as much clarity and focus as planning moves into new territories and markets. Getting legacy portfolios right is fundamental.
Creating or reinventing spaces to successfully integrate the physical and virtual in one joined up experience requires considerable capital investment – and that always means making clear choices. Deciding which assets will benefit from significant new capital investment and those that can be left to tick over or exited is a critically important distinction. And as they seek to take advantage of renewed optimism and a strengthening economy, both in the UK and elsewhere, retailers are having to decide about where to allocate capital. In the process they are having to make some tough decisions about how to spread investment across existing portfolios as well as looking at allocations for physical expansion. The need to delineate between assets and locations that are core to future strategy and those that should be rationalised is essential, in order to focus investment on creating the right kind of customer experience that is going to drive footfall, sales and sustainable growth.
So, there are still difficult decisions to be made. Broadly positive news across a number of key economic indicators is to be welcomed, of course. But there’s no room for complacency or scope to dodge the tough choices that lie ahead. At the same time, however, there’s no question that retailers are feeling more positive about their prospects than they have for some time.