24-hour retail: from day to night?

Oxford Street is one of the busiest prime retail streets in the world. With around 13,560 pedestrians per hour, London leads the way in mass-market retail footfall, surpassing Munich, Madrid, Frankfurt and Paris, writes Nick Robinson, UK retail research, BNP Paribas Real Estate. Looking at the luxury sector, Regent Street comes in at third place, a step behind Paris’ Avenue des Champs-Élysées and Barcelona’s Passeig da Gracia, but with a solid footfall of 9,252 pedestrians per hour.  The figures reinforce London’s status as a top European and international shopping destination, with its unrivalled retail offering in the West End and beyond. Since the Brexit vote, tourists have flocked to take advantage of the currency discount, particularly for luxury goods, and with London boasting 19.06m overnight visitors (according to the Mastercard Destination Cities Index, 2017), it’s no wonder that retailers continue to commit to space in central London in order to grab a slice of the international tourist spend. The Capital’s capital: London’s night-time economy reaps rewards This was exemplified earlier in 2018 by a number of recent deals involving both luxury retailers such as Alexander McQueen at 27 Old Bond Street, and mid-market retailers such as Microsoft at 253-259 Regent Street. Can the high street survive? However, recent events have shown that even London’s high footfall and international appeal does not leave the capital wholly insulated from turbulence in the broader retail market, with Q2 showing poor results posted by several retailers along with high profile administrations and CVAs. While House of Fraser’s flagship on Oxford Street has now been saved from closure following its CVA, the question mark surrounding its future could be an omen of further consolidation in the wider sector, as retailers question central London’s strategic importance as an international retail gateway in the face of sky high rents and business rates liabilities. Furthermore, with the currency discount likely to dissipate in the medium to long term, how does London retail stay relevant on a global stage? Landlords will need to become more creative going forwards, seeking out innovative solutions to rejuvenate potentially unviable retail property. The winners will be those who can take on a role of curator, looking at how and when space is used, and offering retailers an environment in which they can generate maximum value. With online shopping offering the flexibility for late-night browsing that many physical stores don’t, and with research showing that online traffic only tends to decline after 11pm, are after dark opening hours the magic ingredient needed to lure customers back to physical stores? High street: Armageddon or opportunity? In fact, it’s an age-old solution to a modern problem – Regent Street was the first street in Britain to pioneer late-night shopping in 1850, when retailers agreed to keep doors open until 7pm to satisfy the needs of demanding consumers. Changing behaviours But it’s not just about shifting more product. As modern urban-dwellers find themselves becoming more time poor, self-demanding and workaholic, it’s inevitable that our social behaviour will continue to change, with the night-time providing an essential extension to our time – and the retail sector must keep pace. For landlords, it’s about curating the right retail experience at the right time of day to capitalise on these social habits. Topshop’s Oxford Street flagship describes itself as a “one-of-a-kind shopping experience” with a beauty bar, in-store café and even virtual reality experiences. London lures global luxury and tech It’s an approach that has been proven to boost sales for many retailers during the daytime, so the potential for twilight hours is clear – an in-store disco? Live music? Wine-tasting? The GQ “Style Night” shopping event on Carnaby Street is a successful example of luring consumers out later in the evening, offering a 20% discount on retail and leisure in more than 100 outlets between 5 and 9pm. However, retailers must be able to offset the increased costs of longer opening hours, such as utilities and wages, with a boost in revenue that such events could provide. Is keeping the lights on longer always the right solution? This must be assessed on a case-by-case basis – if the area has the footfall and an established night-time economy, then later hours may be a profitable strategy for some retailers. If not, then keeping the lights on for longer may not be viable. Additionally, the type of retailer is a key consideration when looking at longer opening hours. The night store concept is one that lends itself to lifestyle brands such as Topshop, Nike and Apple, all of which have widespread and “instagrammable’”appeal, but the concept must be tailored to the night-time demographic. While the current retail turbulence may not be affecting London to the same extent as other areas of the UK, the Capital is not completely immune from the retail downturn. Experiential retail and the night-time economy will both be key for London retailers to stay relevant. However, the experience must match the consumer in order to grow sales. When physical property is used innovatively, both spatially and at the right time of day or night, the landlord, the occupier and the consumer can all win.   Main pic: Jeff Blackler/REX/Shutterstock