GUEST ANALYSIS Why are NotOnTheHighStreet now on the high street?

Internet retailer NotOnTheHighStreet.com built its reputation on offering surprising, original and exclusive product ideas that (as the name suggests) were not easily found in traditional bricks-and-mortar retailers.

As it approaches its 10th anniversary and £100m annual sales, what are we to make of the news that it has now opened its first physical store – a pop-up in East London’s trendy Spitalfields Market?

At first sight this is surprising, given the bleak story of the UK’s retail scene in recent years. Not only did high street footfall decline by 3.9% in March, continuing an almost unbroken run of two years of monthly decline, but shop prices are also in long-term decline, having dropped every month for fewer than 36 months straight. Fewer shoppers and falling prices – a double whammy that goes some way to explain the number of vacant shopfronts and company profit warnings.

So why should a leading ecommerce brand choose to invest in a physical outlet, just as leading commentators are suggesting the tough retail market is about to get even worse?

The answer lies in those unique aspects of the real life shopping experience that the internet can never match. If shopping were nothing more than a mission to make a purchase, then of course it’s very hard to withstand the attraction of internet shopping with its twin benefits of convenience and price.

But of course successful retailers are so much more than just a venue for transactions. Says who? None other than NotOnTheHighStreet’s creative product director Sally Bendelow: “Customers love the ease of discovering products online but also crave tactile, sensory experiences”. In a recent interview, Bendelow highlighted how the pop-up outlet would create “immersive, physical and exclusive experiences that consumers can actively participate in”.

This same logic seems to have been recognised by other successful digital retailers who have announced plans to create a physical presence, such as Amazon and its Chinese equivalent, Alibaba.

To my mind, the fact that a brand so avowedly digital-first like NotOnTheHighStreet has chosen to invest in a physical retail outlet holds more significance for mainstream high street retailers struggling to thrive in today’s tough market than it does for other ecommerce brands contemplating a move into bricks and mortar. It shows that there really is a ‘special sauce’ in traditional retail, one that creates a special customer experience that cannot be replicated online. What’s the recipe for that special sauce? Three ‘P’s.

The first of those ‘P’s is physical space. Great retailers at every level (from Burberry to Tiger) use it to create a sense of occasion – surprise, curiosity, drama, glamour, whatever – where the merchandise is an indispensable part of the story.

The second P is people. They embody the brand experience in every single encounter with a customer. Their knowledge and attitude define the quality of that experience.

And the third P is purpose, or brand purpose to be more precise. Great retailers – and great brands in general – have a clear reason to exist, beyond merely generating profits. A clear brand purpose signals the brand’s motives to customers and employees alike. For prospective customers it frames expectations of the experience they’ll receive; and for employees it cues up the kind of service that shoppers will expect from them.

Retailers with a clear purpose are subject to the same market challenges as everyone else, but they have stacked the cards in their favour because both their customers and staff already understand what the experience is meant to be. Think of US discount retailer Target’s pursuit of ‘cheap chic’, ethical UK toy store The Entertainer which gives 10% of its profits to charity and will never open on a Sunday, or London used car supermarket CarGiant which offers an alternative to the fragmented dealership market: these are brands that know what they’re for.

If I were a high street retailer I would ask myself what is my brand’s purpose and how this can be brought to life in the customer experience. That’s where the special sauce works its wonders. At Naked we believe a brand’s purpose can generally be found in one of three domains: changing its sector for the better (like CarGiant), changing the customer’s life for the better (like Target) or making a difference in the wider world (like The Entertainer). Wherever it’s found, a clear purpose acts like a North Star for the business: a common understanding that both staff and customers share.

On NotOnTheHighStreet.com it says “we want to make it easy for you to be original”. That feels like a clear purpose, and it has served the brand well in its first ten years in cyberspace. But how telling it is that its pursuit of originality has finally led it to opening a physical store, where they can use the special sauce of retail to create original and unique experiences for each and every customer.

Surely this is a lesson to every bricks-and-mortar retailer who’s worried about the threat of online shopping: when NotOnTheHighStreet want to be on the high street, it proves just how special the shopping experience can be for brands with a clear purpose.

Will Collin is founding partner, Naked Communications.