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What is the Future for the Welsh High Street?

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As part of our ongoing series of weekly features we asked our expert panel and contributor network;

What is the Future for the Welsh High Street?

With news surrounding store closures and businesses going to administration, many believe that the death of the high street is looming.

The Welsh high street faces three major pressures: the weakness of the consumer in the face of high inflation and lower wages; the rise and rise of ecommerce and online buying; and the changing consumer preferences toward ‘experiences’ rather than ‘things’.

How can Wales turn this change into opportunity? What does the future high street look like in Wales? Is there a regional solution or should we have a national approach?

Our panel’s thoughts can be found below, but if you would like to contribute to this feature, or any of our future features, please contact [email protected]

Welsh Retail Consortium

Sara Jones | Head of Policy

Retail is a dynamic and diverse industry and as Wales’s largest private sector employer is a driving force in our economy but we are going through an unprecedented period of change and this is no more evident than on our high streets.

It has long been recognised that the business rates system is not fit for purpose, acting as barrier to investment from new entrants to the industry and discouraging the reinvention of our high streets at a time when they are struggling to adapt to the new challenges they face from customers shopping in different ways. The WRC has called for a two year freeze in business rates until the 2021 revaluation to relieve the burden of this unfair tax and take some of the cost pressure off retailers while allowing time for a dialogue between government and industry to develop a proposal for a modern business taxation system, fit for commerce in the 21st century.

Operationally, the industry is making changes – we have too much retail space. In the future there will be fewer shops and their role will be different, more engaging, more based on experience. Online will continue to grow but seeing online and stores as two separate channels will become increasingly irrelevant. This will deliver better service and experiences for customers and enable new emerging brands and entrepreneurs to grow. And the role for technology and innovation will expand exponentially.   Better digital connectivity with shoppers will be part of the solution for Welsh high streets, with ‘click and collect’ playing a key role to driving footfall into stores.

The future is bright but we must create the opportunities to ensure it’s not Armageddon retail but re-invention retail.

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Charity Retail Association

Mark Chapman | Communications and Digital Manager

There are around 550 charity shops in Wales and despite the current challenging trading conditions, we believe they and our other trading partners on the high street can thrive. Despite lower prices for some goods, the internet struggles to offer the same “feel good” retail experience for someone buying in a high street store; we argue one way of drawing in footfall is to create a diverse in-store offering.

One example is that some of our members have branched out into superstores, which are larger units that include a café and/or community hub. Again, these are areas the internet cannot encroach on. Local councils can also enter in partnership with charities and businesses to ensure there are good reasons to visit the centre of their towns and villages.

Charity shops rely on the local population for incoming goods and custom; all retail units in Wales can harness this localism to increase their trading prospects.

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Business Doctors

Graham L Morgan | Managing Director

In more or less every Town and City in Wales the High Street has come under pressure and a number of factors have been identified that has contributed to the number of empty units in particular. In many ways the spread of the ‘nationals’ over the last 20 years resulted in every High Street being more or less the same with nothing to differentiate them or indeed create a niche attraction. Across Wales Towns like Narberth, Cowbridge and Monmouth have done something different with a higher proportion of independent stores that create something different. In many cases this reflects ‘local’ leadership as a common ingredient.

Finding a new identity is the first step to rejuvenating the High Street and the work of Business Improvement Districts (BIDS) can assist this journey. The population is predicted to grow over the next decade and hence there will be more demand to partly offset on line sales activity. That said having a High Street Shop Window and also a Digital presence would allow family businesses the best of both worlds where the products they sell allow for both mechanisms of distribution.

There is still much work that needs to be done to address unreasonable rent and business rates in certain locations and in many instances return units on the fringes back to residential accommodation rather than empty shop units. I still believe there is a strong future for High Streets in Towns that have a clear plan in place as to what they want to stand for!

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Barclays

Karen Thomas | Head of Corporate Banking

High streets are an important part of society, providing opportunities for people to get together and support their communities but as with all businesses they need to evolve, be creative and reflect the demand and preferred delivery channel of the consumer.

With the increasing presence of online operators it’s vital that the Welsh High st provides something different to draw people in and create a different, enhanced shopping experience. Just selling units won’t cut it when I can probably get it cheaper without ever leaving the house. Added value is key, can I obtain expertise and advice from the retailer, and actually enjoy the overall shopping experience, potentially incorporating lunch with friends, or other social benefits as an incentive to visit the high street

Whilst flexible opening hours and variety of shops are important, factors such as parking, public transport and an evolving business rate system are becoming increasingly important. Successful retailers of the future will also need to focus more on collaboration to ensure their high st provides an environment , not just a shop front, to encourage footfall.

Whilst the High St provides challenges for retailers the recent increase in struggling household names such as BHS, Mothercare and House of Fraser have forced many shoppers to rethink their own shopping habits. Should they spend more of their scarce time supporting local communities? Many will not want to appear complicit in forcing long established names away from the high st or even further …..into history.

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Yomdel.com

Andy Soloman | CEO and Growth Expert

Technology can offer a vast number of opportunities for Welsh business and we’ve already seen improvements, but by further embracing the online shift, they can improve their profitability.

Looking forward, the future of high street retail will need to provide a more sensory offering where consumers are given an experience, not just a product. By doing so and using their physical assets as an extension of their online brand, they can gain an edge over other online-only retailers.

They will also need to plan for an increase in resource requirements such as a greater number of enquiries or a larger turnover of stock. The online sector can provide these third-party resources to enable growth with things like managed, online chat services, off-site storage or an existing platform to sell – all of which takes the pressure off staff in store.

This changing face of retail is something we’ve seen nationally and while there should be an overarching strategy, it must be tailored to regional markets. High street retailers know their area best and this gives them another advantage over online-only vendors when forming an integrated digital strategy.

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NearMeNow (Your Digital High Street App)

Victoria Mann | CEO

Tech has penetrated almost every aspect of our lives but we are yet to find a solution to our declining high streets. Bricks and mortar businesses are shoe-horning their digital needs into existing solutions not fit-for-purpose.

If a bricks and mortar business invests in and builds a stand-alone website, that’s exactly what the outcome would be – ‘standing-alone’.

Social Media platforms are often the chosen solution. However, they are ineffective for businesses that wish to advertise dynamically as opportunities become available, with critical posts being lost in the sheer volume of newsfeed noise and paid-for advertising giving an unfair advantage to bigger businesses who already dominate the shopping environment.

Collectively, small businesses are a force to be reckoned with. A nationwide, high street to high street approach would harness their collective efforts and level the playing field to compete with larger high street chains and e-commerce.

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Visa

Sundeep Kaur | Head of UK & Ireland Merchant Services

High streets across Wales are making huge strides in transforming themselves to offer a range of different experiences for locals and visitors alike.

In particular, we’ve seen that those high streets that create unique experiences for customers are bringing benefits to local businesses, driving footfall and increasing spending on the high street. Holywell, shortlisted for this year’s Great British High Street Awards, is a perfect example of how holding themed events, such as the town’s Holy-Wellbeing Day and Holywell Information Day, can increase community engagement.

We’ve also seen that Welsh high streets are becoming increasingly digitally-savvy. From the installation of free Wifi hotspots to the development of town information apps and embracing of digital payments, we’ve seen several examples in Wales where technology is helping to revitalise high streets and reconnect surrounding communities with local businesses.

Our research shows that consumers demand a great deal from their high streets, and it’s those demonstrating adaptability, resilience and creativity that are reaping the rewards.

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Alistair WardellGrant Thornton UK LLP

Alistair Wardell | Practice Lead, Cardiff

Today’s struggling high street brands could possibly learn from their neighbours.

In the 2008 recession Starbucks, after years of expansions and new openings, were facing lost revenues and store closures, until Henry Schultz returned as CEO and fought hard to rebuild the company’s financial strength and reinstate the firm’s core community ethos and values, paramount to its original success. Maybe retailers could consider the key strategies and actions detailed in Schultz’s book, “Onward”, as a means to survive these turbulent times and possibly return the high street to its former glory of profitability and iconic shopping status.

It might be easy to think that cut-price fashion is the sole reason behind Primark bucking the trend and opening new stores. The business, however, is also capitalizing on its social media activity to stay connected with its market and with 6m instagram followers it is clear these loyal supporters are part of the store’s success. Reports from Digiday highlight how the firm’s social team scroll through the hashtag #Primark or #Primania to pick up trends on how its audience is using the platform. Then, it co-opts these trends itself.

Alternatively, on the other end of the scale, Burberry, used an innovative campaign to resurrect falling sales – combining its historical story and heritage, engaging with current and loyal users and appealing to a new, younger market. The delivery of this campaign was through digital media and you can see the full case study here. The importance of the Burberry story for this article is how the company ignored its competitors’ activities and instead looked to learn from other exemplary brands and mirror what they were doing in the digital space. These three examples indicate how it is possible to overcome challenges through planning, focus, innovation, dynamism and attention to detail.

For those of us old enough to remember the origination of the high street concept it would be fitting to see retailers learning from each other, adopting successful tactics and helping to reestablish our high streets in their rightful place on the retail stage.

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UK Leisure Living

Gareth Jones | MD of UK Leisure Living based in St Asaph

The death of the high street has been looming since the internet was born. However I believe business owners need to adapt and change to survive. Small businesses have always been nimble and open to adjust to change quickly. This is what makes them perfect to weather the storm.

However they need to change now! We live in a world of social media and all these free tools should be used. Create a reason to come to your store that they can’t get online. Dysons new stores allow you to choose the bits to spill on a carpet and then demonstrate how good their device is. This Creates an experience you can’t buy online. What experience could your shop bring? Embrace these changing times and create the footfall to your front door. Don’t rely on others, it’s time for you to create your audience.

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FSB

Ben Francis | Wales Policy Chair

Our high streets in Wales are changing.

High street businesses are affected by a myriad of issues including business rates, parking and online retailing to name but a few.

FSB’s upcoming project will see us starting a conversation up and down Wales about how we can ensure the viability of our high streets in the long-term. This must be a conversation that we have with businesses, consumers, local authorities and many others in order to ensure that we all have a stake in the future of our high streets.

Our research will focus on how businesses can exploit digital and technological innovations in order to benefit their business, as well as how communities, policy makers and stakeholders can work together to support our thriving and dynamic high streets into the future.

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Superfast Business Wales

Paul Gadd | Business Advisor

E-commerce is changing the way Welsh business trades.

Although businesses in Wales have been adopting e-commerce since 2000 the up-take has been relatively low. Over the last few years we’ve seen the decline of the high streets not only in Wales, but throughout the UK whilst online sales have achieved a steady year on year growth. In 2015 the UK was rated as the third largest e-commerce market in the world and last year alone online sales exceeded £488 billion. Can Welsh businesses afford to miss out?

The thing to bear in mind is that selling online doesn’t mean developing an expensive website. There are many online platforms that people trust and buy from daily, many of which you can sell from as a business. Some of these include: Amazon, ETSY, eBay, Gumtree, Google Shopping, and Facebook marketplace to name but a few. There are also several platforms that will allow you to set up a small online shop to test products such as: Shopify, EKM, and Big commerce.

As well as complimenting your existing business, selling online will not only extend your current UK market place, but could also help you establish a new overseas market. So, it’s certainly worth Welsh businesses investigating selling online if they haven’t already, so they don’t get left behind.

If you’re an SME headquartered in Wales you may be eligible to access free digital technology support for your business. Visit the Superfast Business Wales website to find out more and sign-up.