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Opinion: Physical retail can thrive in the digital age says Miles Dunnett of Grosvenor Fund Management

The internet is a fantastic way to shop.  It’s quick, easy and purchases can be delivered.  Yet the quality of experience that online shopping delivers is limited, and unreliable, and it is the antithesis of this we focus on at Liverpool ONE.  We recognise that visitors want to do more than shop.  They want a day out, an opportunity to socialise with friends, to be entertained and to experience something new.

Whisper it quietly: there is much more to shopping than shops.

Entertainment is a key way for built environments to differentiate from online and, as a result, to meaningfully engage with consumers to build loyalty.  From day one, we have brought flash mobs, catwalks, open-air music performances and cookery demonstrations to visitors.  There have been ice rinks and Christmas Coca-Cola lorry drive-bys, reading trees and pianos, and evening as well as daytime events.

We have also listened to our customers and responded by carefully curating the tenant mix to make sure there is a good variety of restaurants and leisure facilities to complement the stores.   This includes the 14-screen Odeon cinema, and has seen us increase our food and beverage offer by 50% since Liverpool ONE opened in 2008.

Obviously, a mix of leading retailers will always be important and our pro-active asset management approach, which clusters together businesses that feed off each other to create clearly defined districts, has proven popular with retailers and customers alike. In the last 12 months alone more than new 20 brands have opened in Liverpool ONE, many making their regional debut.  Brands now include Harvey Nichols’ Beauty Bazaar, where customers can get their hair, nails and make-up done before a night out, Michael Kors, Hugo Boss and Reiss.

Another growing trend is for retailers to be aligned with owners, as they work all possible channels as one.  We see this in practice in Liverpool as retailers pull the fulfilment of online purchases back into their physical stores.  Operationally, this offers clear economic benefits, but the retailer is also back in control of the consumer experience and, perhaps most importantly, creates the opportunity for staff to “upsell”.  Several of our operators contend that for every £1 collected at a click & collect counter, the customer spends another £1 in the store on the same visit. We see this continuing to grow.

For owners, the same principle can apply; bringing shoppers into your scheme by embracing click & collect can lead to upselling in the adjacent coffee shop, visiting accessory retailers to complete the look, or simply increasing turnover in the car park.

This approach has enabled Liverpool ONE to thrive in spite of the rise in popularity of online shopping.  We have grown Liverpool ONE’s catchment by 73% since opening, and 98% of our visitors are likely or very likely to return, and to recommend us to friends and family.

Our strategy is to do more of the same.  We will continue to adapt to make sure we are delivering what our customers want, confident that, by encouraging more people to visit Liverpool ONE, Liverpool, our occupiers and our investors will benefit too.

Miles Dunnett is director of Portfolio Management at Grosvenor Fund Management, owner of Liverpool ONE