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High streets should be social hubs in the face of online growth: Portas report

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High streets must be about more than shopping if they are to prosper in the face of competition including online shopping, celebrity retail expert Mary Portas said today as she launched her much-anticipated review of their future. Instead, they should become a ‘social hub’ for shopping, learning and socialising.

Portas’ report comes at a time when high streets are currently on course to take less than 40% of UK retail spending by 2014, according to government figures also released today. They are losing out to factors including the fast growth of online shopping, said Portas, and there has been a failure to redefine what they should be about at a time when shopping is changing.

Mary Portas said: “Our high streets can be lively, dynamic, exciting and social places that give a sense of belonging and trust to a community. Something which, as the recent riots clearly demonstrated, has been eroded and in some instances eradicated. I fundamentally believe that once we invest in and create social capital in the heart of our communities, the economic capital will follow.”

Speaking to the BBC, she said: “Whereas the high street was always just about shopping, that shopping has shifted into new areas. We’ve got the internet, we’ve got these super out of town malls, hypermarkets, supermarkets but what we haven’t done is defined what the high street is, we’ve let it go.”

Portas’ suggestions to combat a high street decline that has seen town centre vacancy rates double in the last two years were commissioned by the Prime Minster and Deputy Prime Minister in May.

Her 30 recommendations include getting town centres running like businesses, with town teams to manage high streets, and revisiting basics such as business rates, affordable car parking and the removal of red tape in order to allow retail businesses to flourish.

A strong ‘town centre first’ approach should also level the playing field by encouraging large retailers to show their support for the high street, while landlords should have disincentives to discourage them leaving properties empty, and the community should have a greater say in the running of the high street.

Portas said: “I hope that my recommendations can be a catalyst for change but high streets must be ready to experiment, try new things, take risks and become destinations again.

“Local authorities, landlords, retailers and the public need to work together to really animate the spaces they occupy; re-imagined as destinations for retail, socialising, culture, health, wellbeing, creativity and learning.”

The recommendations were published alongside new Government research, Understanding High Street Performance, which showed that while some high streets continue to thrive, a third are degenerating or failing. By 2014 less than 40% of retail spending will be on the high street, the report showed, adding that over the last decade out-of-town retail floorspace has risen by 30% while in town has shrunk by 14%.

Prime Minister David Cameron said: “The High Street should be at the very heart of every community, bringing people together, providing essential services and creating jobs and investment; so it is vital that we do all that we can to ensure they thrive.

“I am delighted that Mary Portas has produced such a clear vision on how we can create vibrant and diverse town centres and breathe life back into our high streets.

“The Government will now review Mary’s recommendations and we will publish our response next spring.”

The Portas report drew swift response from the ecommerce and multichannel industry, with accounts of how online could be a part of, rather than competition to, the high street.

Anton Gething, co-founder and product director at social commerce specialists nToklo, said: “I agree that the high street business model is outdated, but there is not a ‘one size fits all’ solution for all retailers to succeed in the multichannel commerce ecosystem we exist in today. The advent of online retailing, whether on the Internet, mobile or through social media, has opened a huge market for many retailers. However, there still exists a disconnect between the brick and mortar stores and the online world, which has yet to be successfully bridged.

“It is not as simple as finding a way for physical retail outlets to exist, but about better integration of all the customer engagement channels. While there is much discussion of the death of the high street in recent years, ultimately, people want to touch and see things and this is borne out by the growth of Apple’s retail outlets across the UK, for example. This Christmas has also seen eBay trial a physical store in central London and arguably most interesting is the House of Fraser store in Aberdeen that that has no products, simply free coffee and assistants with iPads. There are still tough times ahead for many town centres across the UK and how the nut is cracked is not quite clear, but better integration between online and offline is a must if retailers are to succeed.”

Cindy Etsell, head of retail at analytics experts SAS UK said: “With many retailers such as Tesco, John Lewis and Ted Baker introducing wi-fi in-store in recent months, the potential for the internet as a tool to improve the customer experience should be acknowledged. With the advent of online shopping, consumers want to be able to shop quickly and conveniently without having to wait in queues or find that products are no longer in stock.

“By using online as both a channel for engagement and a way for consumers to research products in-store, retailers can drive footfall and target customers with relevant promotions, updates and discounts that can be redeemed in-store. Social networking platforms and mobile are also playing an increasingly important role and, used alongside online and in-store, can build brand awareness and loyalty.”

She said customer data could also be used by retailers to great effect, helping them gain a deeper insight into their customers and how they prefer to buy. “Putting valuable customer data to work has the potential could breathe new life into the British high street,” she said, “enabling retailers to make better use of online and mobile. With more retailers gathering huge amounts of data on their customers, it’s important that they use it for a competitive advantage of this big data and turn it into knowledge and action. This will indicate to retailers where they need to invest, how to streamline processes and re-invent the high street.”

Maureen Hinton of Verdict Research said the impact of online shopping meant there was an oversupply of retail space on the high street.

“As the report suggests, the future town centre will not have to be just about retail but the needs of the local community. Already we are witnessing a return to local shopping. The expansion of click & collect, (in particular Collect + whereby we can collect parcels from local stores rather than wait in for a delivery or go to the Post Office), plus the high costs of driving, are encouraging shoppers to stay local. Furthermore the ageing population, with falling pensions and less mobility, will want local services and stores.

“Just as a retailer looks for demand opportunities from consumers, so should local high streets.”

Chris Simpson, chief marketing officer at Kelkoo, said the report could be a catalyst to rescue crumbling high streets. He added: “The report suggests far-reaching and complex solutions so each of them will take time to introduce and could be costly. If they are implemented effectively, it will create a compelling retail environment for shoppers but it will not fix consumers’ reluctance to spend in such an uncertain economic climate. Also, we cannot ignore the fact that many consumers use both the internet and the High Street to find the best deal, so to really help retailers this must be factored in to the study.”

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