Martyn Evans shows how digital disruption can pump new life into fading high streets
I’ve been thinking a lot about retail lately. At Dartington we have a small collection of 25 shops, developed over the last 70 years around an old farmstead. Our rural mall employs 75 people from the local area and is an important focus for tourism. We’ve under-invested in recent years and relied too much on “what sells” in times when trading has been tough. When you add this to the changes in the way shoppers want to use bricks-and-mortar outlets, we have a retail business very much in need of a refocus.
And we’re not alone. For a number of years, the death of the high street generally has been widely predicted. The growth of out-of-town shopping centres and supermarkets was supposed to have done for town centres, with shopping online finishing the whole lot off. But Saturday mornings in Exeter, an important regional shopping hub, are busy with shoppers who, it seems, don’t want to let go of the experience of shopping in a city centre. The answer, of course, has to be how those city centres stay relevant and offer customers something different and more attractive than bland malls and a computer screen – diversity, delight and constant change.
This presents a challenge to the property industry. A typical retail landlord is not in the business of risk. They want a nice long lease, with as few break clauses as possible and a good covenant from their tenant. That means a tried-and-tested business. But if the tried-and-tested businesses are the ones that are failing, what then?
The problem, as in many areas where disruptive change is waiting just around the corner, is that market infrastructure is not serving the needs of business innovation and the customers that are looking for it. Ross Bailey, the 26-year-old founder of the digital platform Appear Here, recognised this when he founded it in 2012 to provide an online dating service for retail landlords and retailers looking for short-term space to test new ideas. He could see that the cost of agreeing a temporary lease and the time it took were huge barriers to empty shops being filled. The landlords couldn’t be bothered with the faff and the tenants couldn’t afford it. His online platform significantly simplified the process and now the company operates in London, Paris and New York, launching 300 stores a month in London alone. Interestingly, Bailey says that landlords who take the risk of a series of temporary tenants can achieve a significantly higher yield on their property and with 160,000 brands currently registered on their platform competing for 6,000 retail spaces across the three cities, that risk seems low.
And it isn’t just the legals they’re sorting out. This month Appear Here has announced a collaboration with architect Richard Found to launch a range of fixtures and furniture that retailers can rent by the week to fit out their temporary stores, making retail experimentation even more accessible.
Inevitably, Appear Here’s business model will stretch. Providing a simple legal mechanism to make pop-up retail easier has expanded to other services that de-risk the opportunity – like the furniture – and now the company is being asked to use its knowledge of innovative retail to change places. TfL has given over all the retail in Old Street Underground Station to Appear Here to curate as a constantly changing, experimental mall that is attracting both start-ups and established retailers trying out new concepts. What’s going to happen to all those House of Fraser stores due to close? Are landlords really going to find a replacement department store to take on the lease or could this be an opportunity to create a new kind of department store – one with a constantly changing offer?
It’s this kind of disruptive innovation that’s going to save town-centre shopping. “The death of the high street is grossly exaggerated. It dies when it’s homogenous and uninteresting,” said Bailey in a recent FT article. He’s right.