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Physical shops have a bright future but must adapt to change says Brent Cross boss

Physical stores remain immensely important to the retail sector but retailers must embrace change more quickly than ever to ensure success, Brent Cross general manager Tom Nathan has told a London conference audience.

The boss of the London shopping centre, which is owned by Hammerson, was speaking at the AGM of the Shop and Display Equipment Association this week, in a session titled Is Shopping in Shops Dead? Nathan told delegates that, with technological and social developments, the pace of change in how people shop has never been faster. But he cautioned against panic that online retailers will continue to steal market share indefinitely.

“When I started work with a part time job at Clarks Shoes… 12 per cent of footwear was sold through printed catalogues. Now, probably 18 per cent is sold online… which means that around 80 per cent is still sold through shops,” says Nathan.

He adds that further change in the way people shop is inevitable, with current trends including a rapid migration to mobile technology, but that change has always happened. “That’s life, get used to it. There will always be new things coming though,” he says.

Changing shopping habits already mean that fewer stores are required for many retailers that want to reach the bulk of the UK population. Nathan suggests that a chain could achieve national reach by having stores in 80 key locations, compared to having perhaps 500 smaller stores in the past.

But the says that does not make physical stores any less relevant, it simply means that retailers and shoppers have adopted different strategies. And he points to innovative retailers, such as the Inditex group, that reinvigorate retail with smart omnichannel performance, to show how shoppers can benefit from these changes.

Nathan says that physical locations which remain relevant to their communities will continue to thrive, citing Richmond High Street and Burnt Oak High Street – two busy London thoroughfares with massively different demographic mixes – as providing good evidence of this. But there will be a change – as there always has been – in the type of offer that is required, he says.

And he predicts that regional UK shopping centres will increasingly look and behave like those in London and the South East. But he cautions that secondary towns and cities with an oversupply of retail space or an unclear focus – such as Stoke on Trent – will need to adapt and find new uses for surplus stores.

Echoing themes raised at last month’s Retail Design Expo, Nathan says that mixed use spaces are increasingly important to the future of retail destinations. Restaurants, cinemas and attractions are seen as essential to spaces such as Brent Cross, he says. Recent promotions such as the creation of urban beaches and funfairs have caused substantial increases in visitors and sales. “We could have spent £10m on advertising and not achieved the same impact,” says Nathan.

 A changing tenant mix also helps to keep venues attractive. The opening of Hob Man hairdressers has created the busiest barbershop in the UK, and one where 50 per cent of customers say they wouldn’t have visited the shopping centre if they weren’t planning a haircut. Many stay on to shop or eat, adds Nathan, reinforcing his belief that customers want and need social interaction.

“Is the shop dead? No way,” concluded Nathan.

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