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Recession retail: Can the High Street survive hard times?

Updated Tuesday 23rd June 2009

Retail champion Mary Portas shares her views on the prospects for the High Street during a dark economic time.

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My name is Mary Portas and I've worked in the retail industry for 23 years.

How has the recession changed high street shoppers' habits?

Well I think the recession has really affected the way a consumer spends. I think the consumer’s really starting to think about where they spend their money. We came out of a really high consumption 10-15 years, where consumers were buying what they wanted, at a price they wanted, at any time they wanted.

So now, in order for consumers to really start to spend again, great retailers are looking at service at their core, and we’ve lost service culture over the last 15 years because selling has been so fast; we’ve come out of a fast selling period and we’re going into what is a slow selling period, which effectively means that we are buying less. In some cases we're buying less but actually paying a premium and making things last longer. So it's a very different balance. If you think about the shopping habits we've gone from very fast and disposable into a slower, more meaningful type of spending.

Why do people still shop on the high street?

The internet offers really good value, accessibility and imparts knowledge to a consumer. What it doesn't do is that personal interaction. And we are humans after all, and humans love personal interaction, and when you see it as its best is when you go shopping in markets, where there’s this buzz and this energy of people coming together.

So great retailers will seduce by that, and by great service and environment where there's an experience. You don't have a shopping experience when you’re sitting at home on your computer, you do have a shopping experience when you turn up to a shop.

I think people like Apple are a great case in hand; people can buy that from the internet but they choose to go and play in an Apple store, and actually to learn something.

How can small retail entrepreneurs compete with strong brands?

Well I think now is the time for the small retail entrepreneurs. Strong branded multiples have become a little bit bland, and consumers want something that actually connects with them much more on a personal level.

And, in the rocky world that we’re living at the moment, also people want things that they can trust, and people that they can trust, and they actually start to shop on a smaller basis and local. They find the world rocky and a bit shaky so they want to have things that are local and that they can trust. So there is a huge opportunity for small independents to deliver that to consumers. And also to deliver a slight touch of individuality.

What's happening in retail is people are no longer buying status brands but rather they're buying status stories, and so a little retailer who maybe makes his own homemade cheese or designs his own bag, has a great story associated with it much better than the big major brand that is more of a status symbol.

How does all that's going on in the high street affect customer choice?

I think the customer actually has greater choice. The customer is king here because the customer actually is starting to really dig deep and find really good offers, and actually going out through the internet, through the high street, searching out and becoming much more searching and inquisitive in their shopping habits, and actually discovering that there is choice.

We've come out of a time where people and quite mediocre retailers were able to grow and end up on our high streets. Now it's about the people who can really deliver, the retailers who can really deliver choice, service and experience to consumers.

So actually, I think the customer has greater choice, because also in a recession what does happen is new people come on into the market because there are opportunities to get things at a better price, and start businesses at a better price, and especially with the rents going down because landlords can’t get the prices that they were getting beforehand.

What skills do different retailers need in today's environment?

I think the skills that retailers and managers need in today's environment is skills that understand what it is that the consumers need, and what it is that motivates consumers, and that really has to have a real understanding of human habits. And sometimes people find that very difficult, they think that's all got to be research-based, it's not, it's actually looking at the retailing high street, looking at the communities, looking at what it is that are inspiring people to shop, and there is a cultural shift and they need to tap into that.

This is really understanding humans and their shopping habits and how they live their lives, I think is the most important thing. Retailing tomorrow is no longer about I'm going to buy it for this price and sell it at this price and let's look at how the margins are. That to a certain extent and the value into the market, but retailing tomorrow is going to be really connecting with individuals and their lives and having meaning to their lives.

So a real big dollop in social awareness wouldn’t go amiss with lots of retailers.

Will the retailers who survive this economic downturn face a cultural shopping renaissance or will it soon be business as usual?

I think we will have business as usual, but business as usual in a different way. Business will come back, we will get through this but there will be a change, there will be a shift in consumers' buying habits, and retailers will have to respond to that. And I think we're going to see people that will trade up and trade down, you can no longer box people how they buy, you can't box me as a designer buyer, you can't box me as a value buyer, you can't box me as a high street buyer because I’m going to be all of those. And I'm going to choose and I'm going to pick, so I think we'll see a different high street. We’ll see a mix on our high street, I think we'll see a more interesting retailing high street. It will be business as usual in the future but it will have changed.

That's just my opinion, but what do you think? Join the debate with the Open University.

 

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