Not content with beating the British high street, Amazon is joining it. The first of 10 pop-up stores planned by the online shopping giant opened in Manchester on 3 June, providing a home for more than 100 small online businesses.
The “Clicks and Mortar” stores will provide an outlet for online retailers to connect with shoppers, and could provide a shot in the arm for flagging high streets. Around one in eight of the UK’s nearly 600,000 physical retail units are vacant, according to data from analysts the Local Data Company – though that’s down from a recent vacancy high of 13.9 per cent at the start of 2014.
The high number of vacancies is due to a number of reasons including austerity depleting the average shopper’s expendable income, but also a shift in the way we shop. Many of us browse in physical stores, then head home and buy items online for less.
“If we look historically, vacancies have been coming down over the last three years even though online growth has come in the last three years,” says Ronald Nyakairu of the Local Data Company. Still, in 2018, nearly 50,000 stores closed – including major brands such as Toys R Us and House of Fraser.
“It’s a positive move,” says Graham Soult, an independent retail analyst. “If you look at the way online retail and bricks and mortar retail are intersecting, it certainly isn’t unusual for online businesses to want to grow a presence in the physical space. That is a common trend. If Amazon can help enable that, that’s good, but it certainly isn’t to say that kind of thing isn’t happening all over the place already.”
Initially-online retailers such as female fashion shop Missguided have opened physical stores, while quirky retailer Etsy has previously opened a number of pop-up shops in Oxfordshire. Doing so helps build brand loyalty, says Soult. “There is often great merit in having a place where people can see, touch and engage with products, meet the people behind those products, and have that brand touchpoint. That isn’t as easy to create in a really engaging, joyful way online as it is in the real world.”
Nor is Clicks and Mortar Amazon’s first step into offline retail: the company has a plan to open 3,000 Amazon Go grocery stores, fully automated, staffless supermarkets within three years, while it also has a presence in Whole Food stores across the United States and UK. “Amazon has been gently making inroads into the physical space for a while.”
For the firms taking part in Manchester’s pop-up shop trial, it’s a boon. Manchester-based business Swifty Scooters is one of the first to be selected for the Clicks and Mortar trial. The company has been operating since 2011, but having an offline presence is a benefit, says the company’s Lauren Siddall. “When it comes to scooters, a lot of the customers we have want to see what the product is like to ride.” The firm does offer people access to its headquarters in Salford, but that doesn’t benefit from passing custom. “It’s not on the high street so we don’t get footfall as you do in the city centre. There’s an appeal in allowing our brand to expand across different markets.”
Whether the idea will expand further is yet to be seen – and could be dependent on the success of this initial Manchester shop. However, the circumstances that Amazon has currently enabled on the physical high street allow them precisely to engage with this test. “They’re probably able to negotiate better rates than they would three years ago when the high street was healthier,” says Nyakiru. “It’s quite attractive at the moment because there are a lot of empty shops, a lot of supply of space and not much demand. In the past landlords wouldn’t have been interested in a six month lease, they’d have been looking for three or five years.”
Will Amazon, destroyer of the high street, end up being its saviour? Opinion is split. “There are always exciting, new independents coming forward, and if we can help those businesses to succeed a bit more and have some of them grow into their own shops in due course, that’s the way of sustaining the high street,” says Soult. But Nyakairu is more sceptical. “It’s an initial move, but still needs to be taken into the context of a much wider market. If you think about the 50,000 stores that closed last year and the 10 Amazon are adding, it’s a small way of accounting for the loss of shops on the high street.”
This article was originally published by WIRED UK
