The Future Of Shopping In Cities
We’ll buy more on online, but we’ll still want to go shopping
Over a decade ago, when Forum for the Future did ‘Retail Futures’ with Tesco and Unilever, I predicted that shopping would follow two distinct paths: we’d buy an increasing amount online, especially our basics like bog-roll, but at the same time we would witness the growth of “shopping as theatre”, part of a family leisure activity.
In recent weeks, two things confirmed that we are, indeed, on this journey, and pointed to what this future of shopping might mean for the shape and feel of our cities. First, I read that, for the first time in the UK, a retail park had been bought to be repurposed for distribution. Then, I popped into the flagship Microsoft store on Oxford Circus and it was clear that this shop, in Europe’s busiest shopping street, was mostly selling brand and experience.
Shops To Sheds
The retail park, in Edmonton, North London, was purchased for more than £50m and will be converted from shops into warehouses.
This attests the growing power of online shopping. In UK retail, one pound in five was spent online last year. Our high streets are suffering; shopping centres are being sold off.
The fact that more of us are buying online not only means giant sheds are sprouting-up near motorways, but also that there is increasing demand for logistics facilities on the edge of town, closer to where people live and work.
And that’s where retail parks come in. As more shoppers sit at home to spend, more shopping malls will be transformed into distribution hubs. They often have good edge-of town positions and enjoy good road access. In some, the sheds that housed shops can be repurposed as warehouses. And these retail parks are currently available at an attractive price.
Two years ago I wrote that it was a sign of things to come for cities and retail when former Uber CEO Travis Kalanick announced that his next company, City Storage Systems, would be taking distressed real estate assets — like abandoned strip malls, parking lots or factories — and turning them into spaces suited for new industries, such as food delivery or online retail. His subsidiary company Cloud Kitchen now offers purpose-built, offsite, ‘ghost kitchens’ to prepare food. Increasingly, delivery companies like JustEat and Deliveroo may not pick up from your friendly neighbourhood eatery, but from an edge-of-town shed where a variety of cuisines are cooked for online-only restaurants.
An On-Demand World
Consumers’ growing desire to press a button — or speak a command — and have a product or service come swiftly to them may not only impact restaurants. Amazon Fresh is challenging food stores with same-day delivery of groceries. Other survivors on the shopping street — like nail bars and hairdressers — may also increasingly go mobile and on-demand.
The growth of this online-led distribution infrastructure is clearly attractive to investors, (Blackstone has been hoovering-up last mile logistics properties for the past couple of years), but what will it do to the vibrancy and communal life of our cities? Going shopping and eating out have been such a fundamental part of our urban fabric, it scares me that they might be replaced by distribution depots and delivery drones.
Shopping As Theatre
The good news is that, alongside the online revolution we are seeing savvy retailers offering shopping as theatre. When I wandered round the Microsoft Store on Oxford Circus, it was clear that they were selling experience as much as product. This prime piece of retail (more than 4 million people visit Oxford Street each week) contained a large Gaming Lounge, with the latest chairs, pods and kit, as well as meeting rooms and event spaces. On the opposite corner of Oxford Circus, Nike Town has no products on the ground floor, and offers individual running advice, athlete talks, and a running club.
Travel outside central London to a thriving shopping centre, and as well as much better food choices, pop-up shops, and children’s play areas, you’ll likely find climbing walls, indoor golf and bowling alleys. People still want to be entertained, excited, and surprised, and to do this together with others.
More of our lives will certainly go virtual, but I think there’s something deep in our human experience — the hunter-gatherer scouting for a prize or the farmer coming to town on market day — that means that we will still want to go shopping. Shops will remain an important, if smaller, part of the city.
(Full disclosure, I sit on the Board of The Crown Estate, which owns shopping centres around England and is landlord to shops in London’s West End, including Microsoft. The views in this article are my own).
