For years retail real estate has been a safe place to invest cash for a long-term, low-risk return. Yet over time more risk has been placed on occupiers, creating a high fixed cost environment that’s hard for businesses to survive in. With such paper-thin margins, retailers have had to achieve scale to be sustainable. The outcome is vanilla high streets with the same retail offer, across all of our high streets and shopping centres.
This was changing before COVID but has accelerated as various national lockdowns laid bare the absurdities of the traditional retail model. Why would you take a shop for a decade, spend a fortune on a fit-out, staff it for seven days a week yet only make money out of it on a Saturday?
The high street is a completely different place on a Monday to a Saturday. Why would you execute such a static and inefficient solution? Worse, why would you perpetuate it again and again, and expect a different, more successful outcome? Until recently the excuse was all about stock. The time and effort used to fill a store made agility difficult. Today, though, it’s obvious that we do not need shops to be distribution channels for ‘stuff’. We can all get anything easily delivered with consummate ease. The key defensive moat of physical retail has been eroded. Online brands can more than compete with offline, without ever having the need for a shop.
Shops are no longer entirely about stuff. Different uses have different peaks across the week. Fashion retail on a Saturday, events in the evenings, wellness and fitness in the mornings, retail banking or food and beverage at lunchtime. A space that facilitates lateral occupancy, so its users can be in physical space at the times that suit whoever its occupier or audience is, is a much healthier way to bring brands to the high street and create a sustainable, long-term solution. Allowing occupiers to book TIME not SPACE is the most agile and efficient use of physical space currently on the market.
