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Brand Emporiums: When is a retail outlet, not a retail outlet?

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Brand Emporiums: When is a retail outlet, not a retail outlet?

We’ve all heard the news, the high street is failing!

Changing times

Once the bustling heart of a city, now just a generic mismatch of stores, reminiscent of the never-ending corridors in Scooby Doo. Be it Bradford or Southampton, Middlesbrough or Luton, the nation’s high streets have become a continuous procession of Poundland-Bookmakers-Coffee Shop, Poundland-Bookmakers-Coffee Shop.

Even for those of us whose perfect day out does consist of 32 batteries for a pound, the 3.15 at Ascot and a Grande Caramel Macchiato there’s no denying it: the British high street is in trouble. Research carried out by Saatchi & Saatchi found that “one in six shops is currently boarded up, rising to one in four in the centres of Rotherham, Blackpool, Grimsby and Hull. Footfall is declining: down 10% in the last three years. Fully a quarter of the UK’s high streets are failing, with another 11% suffering”.

We could argue that the problem – the root of all this evil -is the internet. With the turn of the millennium and the dot-com boom, major retailers packed up their bags and headed for cyberspace, armed with the promise of lower operating costs, streamlined process management and the opportunity to reach a global customer base. You only have to look at the list of names – most of whom were synonymous with the British high street through the 80s and 90’s - who no longer have an offline presence – Dixons, Virgin and Barratts – to see this in action.

But with all the doom and gloom, could some interesting news from two of the internet revolutionaries signal the revival of, or at least put a greater emphasis on, the British high street?

In February 2012 Google announced plans to open its first physical store at the heart of its European Headquarters in Dublin. This was closely followed by news from Amazon that they intended to trial an offline store close to its headquarters in Seattle. Reports from The Telegraph suggested that “The shop (Amazon store) is being opened in a bid to gauge how profitable a chain of retail stores, in a similar vein to Apple, would be”. That’s certainly no mean feat!

The Apple stores have undoubtedly become the iconoclasts of modern day retail. Their stores make an average of $5,600 per square foot. Their employees are even reported to be worth a staggering $320,000 each. But when you look at the bigger picture and consider the profitability of these stores in relation to the company’s overall revenue it begs the question: how much are these stores actually about selling a product and how much are they about immersing the brand into our day-to-day lives?

It’s not about the sales – well not directly!!

For the 2011 financial year, Apple reported revenue of $108 billion, of which less than 10% ($10.7 billion) came via their retail stores.

Rosie Baker of Marketing Week describes how “the future of stores is not in retail”. Instead outlets will become ’emporiums for brand engagement’. As retailers work towards creating an integrated ‘bricks and clicks’ operation, online brands will appear on the high street as part of a wider marketing strategy.

If you think about it logically there is no way that Amazon could come to the offline marketplace and try to sell their entire product collection under one roof. It’s almost like the real-life version of You Tube’s ‘April fools’ prank where they offered their entire video collection in a 550,000 disc set, delivered by your own personal fleet of shipping trucks at the cost of $3 million. Amazon would need an entire high street to themselves.

Instead, the ‘brand emporium’ acts as a showroom for Amazon’s flagship products and their brand. The physical presence enables them to immerse themselves in the day-to-day lives of their customers. It gives them the opportunity to engage on a personal level and build a direct relationship with each individual. By producing a stimulating, no pressure environment they provide consumers with the chance to discover more about the Amazon product family and have direct experience with the Amazon brand values.

Further to this, the physical store also offers an environment where people can socialise, share and interact. It even provides a meeting place or somewhere you can visit for a little self-indulgence, further strengthening the day-to-day relationship you have with a brand.

Of course, the motive behind all this is that it directs customers to their online operations. This is something which Amazon has tried in the past through its price-checking app, which offers shoppers a 5% discount if they look up the price of an item and make a purchase through their online store. However, the 'Amazon Emporium’ is seen as a much more organic way to drive customers online, building genuine brand loyalty. An excellent example of this is John Lewis, who found that when they open a store, they see a rise in online sales for that area.

It’s necessary to point out that Amazon is only trialling their first physical store and by their own admission it will occupy a smaller, more ’boutique-type’ venue, rather than a giant space like Apple’s super-sized, global stores. It’s also difficult to imagine that should the Amazon store be a success in Seattle they will soon be making their way into Coventry city centre, but the ideology and the brand ethos of these stores can certainly translate to the British high street.

All hail the saviour of the high street!!

Probably the most interesting thing to come out of Saatchi & Saatchi’s study is how Generation ‘Y’ (Britons aged 16-29) feel a strong connection to their local high street. As Campaign explains “while this generation is, without doubt, the digital natives of advertising folklore, they are not overly enamoured by online shopping”. While young people still visit their high street, “it is becoming little more than a transactional relationship. What was once a deeply social experience is being progressively bled dry of its humanity and sense of community”.

By following the example set by Apple and other online retailers, the British high street can be revived. Brands can re-ignite the passion consumers have to see their high street succeed, providing a move away from the ‘identikit’ and faceless store formats parachuted to every high street in the land. Through a greater emphasis on sociability, connecting with consumers on a human and personal level, brands can provide a unique, relaxing and social environment. Sales will be driven by providing consumers with a retail outlet which becomes part of their everyday life and immerses them in the brand's values. In essence, this will bridge the gap between online and offline, enabling them to work together in something approaching perfect harmony.

So say goodbye to Poundland-Bookmakers-Coffee Shop. Say hello to the ‘Brand Emporium’.

Resources:

http://www.tuaw.com/apple-tops-us-most-profitable-retail-chain/
http://www.marketingweek.co.uk/the-future-of-stores-is-not-in-sales
http://www.campaignlive.co.uk/analysis/1116239/