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Kait Borsay

Hello, and welcome to “Transforming retail”, a brand-new podcast series from EY teams for leaders in the retail industry around the world. I’m Kait Borsay, and at a time when consumer habits are changing fast, we’ll be looking at how retailers can evolve quickly to stay relevant. Our focus this time is on London’s retail value proposition. We’re joined by a panel of professional guests: Thomas Harms is the EY Global Retail Leader. Hello to you, Thomas.

Thomas Harms

Hello, Kait.

Borsay

Jon Copestake is the EY Global Consumer Senior Analyst. Hello, Jon.

Jon Copestake

Hello, everyone.

Borsay

Nicole Srock. Stanley is the CEO of the Dan Pearlman Group, the strategic creative agency combining branding, retail and leisure expertise. Hello, Nicole.

Nicole Srock. Stanley 

Hi, Kait.

Borsay

And Ian Johnston is the Founder at Quinine, helping retail leaders re-imagine the role of physical retail. Hi, Ian.

Ian Johnston

Hi, Kait.

Borsay

Now, you’ve all just been pounding the streets of London looking for examples of leading practice and innovative new trends in physical retail. We’ll get your observations in a moment. Thomas, first of all, which locations did the four of you cover? And are there any blisters on your feet?

Harms

So I’ll start with last, with the latter, yes there are, and it reminds me that working in retail is really a tough job, standing all day on your feet, running around. So I made a number of miles. So we visited four locations, Knightsbridge, Oxford Street, Coal Drops Yard and Westfield Mall.

Borsay

Great. Well, we’ll find out exactly what happened in a few moments time. We’ve got a ‘Best of What You Saw’ quick fire round later on for you as well. First of all though Jon, what’s the theme do you think for London’s retail scene at the moment and how do the different locations reflect that?

Copestake

So it’s interesting that London is an age-old historic retail location, and people have been able to shop there for generations and for hundreds of years. But what we saw is that there is also a lot of new innovation coming out in London. So what we want to do is select these locations so that we can look at some of the newer locations such as Westfields and Coal Drops Yard, and also look at some of the older locations such as Knightsbridge and Oxford Street, to see how some trends were persisting, some of our value propositions were persisting, but what new ones were coming as well.

Borsay

Well let’s go round the table to find out where each of you visited and hear your impressions specifically on that area. Nicole, let’s start with you.

Srock. Stanley 

Well, I went to Hammersmith because I’m really interested in seeing how retail shopping malls and especially the surrounding of the cities react and interact with each other. So I went to see the IKEA concept where IKEA bought a whole shopping center and redid it and it has a very interesting approach because it’s kind of scruffy made and it opens up to the neighborhood and invites everybody to actually have a communal space. And the core tenant is IKEA itself. And they set up a new concept, it's Atelier 100 where they give young London-based designers the chance to exhibit themselves.

So it is really interesting how everything is interwoven and that they give the concept a lot of air to breathe, and it’s not so finished. And this makes it really interesting and lively, I think.

Borsay

Ian, let’s come to you. The same question really, where did you visit? What was your impression of the area?

Johnston

So we started at Harrods in Knightsbridge, and walked down Brompton Road and turned toward Sloane Square and walked down Sloane Street. And so quite an area of traditional luxury markets. And I was inspired by many of the things I saw. The sort of confidence and individuality of some of those brands was truly inspiring. The ability to present new offerings and new formats and new types of engagements was really inspiring, especially as it adapted towards the community around that area, which I didn’t really expect. I expected it to be more of a global proposition, but actually it had a tremendous London focus and feel.

Borsay

Great. Thomas what about you?

Harms

Well, I’ve been to Coal Drops Yard and I expected a very commercial place, but actually it was a place for curiosity: very clean, very neighbourhood-like stores, all very individual, high engagement. So I was really amazed and it was a place where I like to stay and if I could, I could have stayed longer.

Borsay

Jon, what about you?

Copestake

So I went to Oxford Street and Regent Street, which is almost the diametric opposite of what Thomas visited because here obviously there’s a lot of flagships, it's such a lot of retail tourism and it’s also an area in transition. So I mentioned old being new. At the moment it seems to be going through that transition. There’s lot of store closures, a lot of big flagships closed and a lot of short-term stores popping up. I don’t know how many candy stores and vape shops I saw. But at the same time, you can see a lot of innovative practices and old practices successfully persisting there and that’s a really exciting fact that the old is still coming through in terms of really, really being core to your value proposition.

Borsay

Nicole, I know you’re passionate about the future of cities and bringing people back to the High Street. What innovative ideas caught your attention specifically in Hammersmith?

Srock. Stanley 

Hammersmith is such a good example because they actually used a lot of tools that can normally be used in place making. So they introduced kind of furniture to the outside that combined seating and planting, and sprinkled it around the whole shopping center. And they actually opened the shopping center to the back where there is housing, a social housing project and built a communal place and introducing and bringing the people into the mall as a living room to the whole community around.

So I love that idea. And I love the idea that they had a very open, sometimes really scruffy looking approach to the architecture that says, I’m not finished. We are experimenting and we bring people in, and you can participate in the development of this whole 1970s shopping mall that was clearly desolate before they took it over with the Livat concept. So I thought it was really excited about this concept and the way it mingles with the city and with the communities and tries to be a crystallisation point of the center.

Borsay

Ian, you love the theatre of shopping, that’s no surprise to me. You're sat next to me in a bright cobalt suit, cobalt blue suit at the moment. You have got a keen eye for in-store display, this is what you like to look at. What did you find that’s been really interesting or inspiring?

Johnston

Interestingly enough, we talk about innovation and in some ways, I think a lot of what I saw went back to basics, right. There’s a huge focus around the environment, the materials, the experience you get from being in a place. But what really inspired me was the way that staff activated those spaces. Without the staff themselves I wondered whether you’d have the dynamism you had. Staff really brought the thing to life. The passion they had in the products, and I think we’re all talking about a very similar kind of opportunity where staff and physical spaces make unique experiences, right. They're not canned up, they're personalised, they're customised and really dynamic and that’s what real retail is about.

It has a social element, a social fabric which whether you’re a tourist coming in to see Harrods and you want a bit of London or you live off Brompton Road and that’s your local department store. There was so much community and human qualities there brought to life. And for me, like I said, it’s not a new trick, that’s an old trick. And it seemed really refreshing that it wasn’t filled with digital transformation and QR codes, but actually there’s a social element beyond a level of hospitality of just getting a drink. They really, really opened up the store, opened up themselves, made it personal. And for me that is one of the cornerstones of why you shop. It's a social activity.

Borsay

Thomas and Jon, I'll ask you both the same question. What forward-thinking things and ideas did you see in London’s retail scene that impressed you?

Harms

I think it is the use of the space in itself. It was not just to stock merchandise and make it available to the shopper. It was more about creating an installation of certain products so that you get inspired to want to learn more. And then they shipped it to your home, or they brought it back from the store behind the scene. And all the stores I saw had other purposes. So there were parties, events, cycling, tours. And in one store they even didn’t sell the merchandise by themselves, they rented out the space to brands around cycling to create this inspiration and this pop-up store for 6 months for the cycle, for the helmets, for the accessories.

And then all combined with everything you need as a cyclist. So there were mechanics, there were people making your cycle to your measure. So really customising it. All the journeys of the world around cycling were available on screens, the current performances. You could do a cardio logging cycle. So everything around it was there.

Copestake

Well for me I think it was about as I mentioned, just keeping the old and new themes. So in terms of one of the things that I saw which was inspirational was that notion to store much more as showroom rather than a space in which you’re actually trying to sell stock. So one of the stores I went to had a gaming room, had like 20 or 30 consuls and there were just people playing games in the store. They weren’t selling anything per se, people were just using that to experience the brand and the retailer.

On the other hand though, there was the high touch element where I went to at one luxury store, and was shown around by a member of the sales staff. They show individual customers around. They bring them items. They bring them drinks and refreshments and they show them how to really experience the clothing that they sell. And that was really powerful because it’s low-tech, it's not rocket science it's literally just the ability to actually create a human connection with people and drive that into something that’s much more meaningful.

Borsay

Well, our enlightening conversation continues with a look at what’s not doing so well when it comes to predicting and adapting to consumer’s needs. Plus, we’ll have ‘most interesting product’, ‘best service’ or ‘business model’. That’s all to come.

We’ve already heard some great retail experience examples, but without mentioning any brand names, can you give us your observations of what’s not living up to expectations and why that is? Nicole, let's come to you first.

Srock. Stanley 

Well I’m really interested in everything that has to do with the phygital customer journey, that means combining digital and physical retail. So I was specifically looking out for something like metaverse approaches or gaming approaches, everything that has to do with retail and leisure.

So I was checking for those things and surprisingly enough it is all stand-alones, it hasn’t merged very well yet. So they have on the fourth floor a room dedicated to NFT products or they have like screen showing bubbly worlds where you can enter. But everything is still very clunky and not so consumer friendly. It has no natural flow at the moment. So I would have thought that everything progressed a bit more and it’s not, just because in the physical world you have a door, you have a door in the digital world as well.

So I think we still have to figure out how to merge those worlds seamlessly.

Copestake

I can build on that which is that obviously I went to a couple of fairly high-tech retail value propositions, and it’s really interesting. Everyone has been talking about multichannel and omni-channel and they’ve been talking about blended experience and physical supporting digital, etc., but actually we didn’t see that. I mean it wasn’t something that I saw explicitly in any of the stores. That’s not to say it’s always a bad thing, but it does show that one of the things that a lot of people are talking about in market, it isn’t actually coming to the experience people have in the stores.

Johnston

I’m with Jon 100%. The idea of an omni-channel experience, right, for me the last 10 years has been the background, the infrastructure, it's now to deliver on that promise. What does that mean for the customer? Driving people from online to in-store. Using your store to drive people back online. This cyclical kind of experience, this branded experience, which can be physical and can be digital, we're not there yet. And there are really simple ways to do it. And I don’t understand why, I mean I do understand why and the complexities of where we are in terms of the economics behind it, but there are huge opportunities to really develop that. And it just takes a few retailers to really push that out there, I think.

Harms

Yes, maybe to add that the use of data in all the stores that I have seen has been zero. Part of the receipts that was in baskets that I took, nothing else was collected. So when they talk about their shoppers, their customer which the people I talk to do a lot, saying, who is this person? But they couldn’t, if somebody else would serve you next time, they would not know what you had bought, and I think that’s a missed opportunity.

Copestake

Ian and I have talked about this a lot, but the one thing I noticed very, very starkly this time round, because I've obviously done these tours before in various places, is that the balance between stock and experience needs to change. So at the moment most of the stores that I visited or many of the stores that I visited were very, very high on stock and they are not going to sell all that stock in a day, they can restock. And the experiences, some of which were fantastic, were locked away in a corner somewhere.

So I went to one store where they did some gait running on me. And they sent me a fantastic email which showed my gait analysis and how I can run, which was one of the most brilliant things I've ever seen in terms of running. It made me want to run again. But I had to actually ask an assistant, were in the store it was. They had to show me where it was and run through it with me. And it just showed that actually these fantastic things that these stores have got, they're not necessarily putting them front and centre as much as they could.

Johnston

Can I come back to the data thing. Sorry Jon, to interrupt there. And I would agree with you 100%, there’s more activation from the staff and to introduce people to it and curate the experience. But coming back to the data Thomas, that I felt in some ways retailers that I saw, and they were luxury brands, were more focused on their vision and creating something unique that represented what was authentic to the brand. And so maybe not responding so much to customer needs. And I know that’s the flip side of what you’re talking about, you're talking about data collection and personalisation through that.

But I really felt the vision of these brands at the focus, like let’s create something unique and special for our customers. They shop with us because I’m a certain brand. And that I felt was really brave and they were very confident in doing that. And that was really refreshing. It wasn’t the generic stuff I see everywhere on every high street all over the world, it was unique and special to that location. And I just wondered whether they were actually collecting data and responding to it or listening to their own brand promise?

Borsay

All right, well that leaves something to think about doesn’t it. Now onto the finale that I know you’ve all been waiting for.

To round off the show today we are going to have a quick-fire round. You have each got a maximum of 30 seconds to tell us either the most interesting product, the best service, or business model that you have seen. Thomas, you’re up first, your 30 seconds starts now.

Harms

Yeah, for me most impressive was VIA this cycling company that is renting the space out. So that was really great, inspirational bike place.

Borsay

Jon?

Copestake

For me, it was purely around the luxury store that obviously offers that one-to-one consultation. I was very impressed with the gait analysis and all the high-tech stuff that went there. But for me being able to go into a store and know that somebody knows you, they’ve kept your data, they keep in touch by WhatsApp. They let you know when things are coming into store. They give you all of that personal service. It felt to me like a very, very high-touch and it’s not something that requires particularly a huge tech stack to deliver on. It's just something where actually the staff are the most important thing.

Borsay

Ian?

Johnston

For me, perhaps, the most inspiring experience was the Anya Hindmarch Village just off Sloane Street, which is a collection of stores that the single brand owns. Each of the stores does a unique offering. One of them is about personalisation and embossing. One of them is about recycled product line they had. They actually have a cafe there, and so this kind of flagship which has all been almost deconstructed and put into a street. They had a pop-up there which they change out every couple of months. This time it was stationery brand.

Borsay

[Buzzer] Time is up, I'm afraid, Ian. Narrowly escaped disqualification along with Jon there for going over time. Nicole, my hopes are resting on you, 30 seconds please.

Srock. Stanley 

I thought the new retail as a service concept where you actually, the brands rents space. I like that a lot because they had an amazing device for scanning and then being pushed to the Internet and then you get the best price for the products. And also, very extensive analysis of what kind of product is and what kind of future it has. Because that normally is where the whole customer journey breaks and those kind of concept retailers as service concepts.

Borsay

Alright, we’ll call time on it there. Thank you very much for those answers and I can reveal that 2 of you hit 30 seconds on the nose. You get a special non-existent award, an award in theory. Jon and Nicole, you both hit 30 seconds dead on. Thank you.

It’s been a really fascinating discussion, I'm sure you’ll agree. Thanks very much to our great panel of guests today. Nicole, thank you.

Srock. Stanley

Thank you so much.

Borsay

Ian, thanks to you.

Johnston

Thanks for having me.

Borsay

Jon, thank you.

Copestake

Thank you.

Borsay

And Thomas, thanks to you.

Harms

Pleasure.

Borsay

Thanks for joining us for this episode. Do subscribe to the series so you don’t miss another one. From me Kait Borsay, thanks for listening.
 

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