Minutes on 01/05/19 for The Future of High Streets and Online Shopping
AGENDA FOR THE APPG FOR TEXTILES AND FASHION ON RETAIL:
THE FUTURE OF HIGH STREETS AND ONLINE SHOPPING
CHAIR
DR LISA CAMERON MP
Speakers:
PROF WILL JENNINGS – WJ
BEV MALIK – BM
FRANCES CARD – FC
ANNE ALEXANDRA – AA
CHARLOTTE TAYLOR-PHILLIP -CTP
Tamara introduces herself and informs meeting that Lisa is running 10 mins late and introduces first speaker – Professor Will Jennings
Professor Will Jennings – Political and Social Scientist from CENTRE OF TOWNS
WJ explains what he does and gives fast intensive slide show starting with:
What Centre of Towns does as a non partisan organisation providing research and analysis for our towns
Growing political divide is different between small towns and cities
Looks at geographical location, economic geography and huge progress of cities with side effects and consequences
Data driven by social and economic issues and by place and people (ie identity, heritage, community
Identity is key issue feeling represented or not eg. Bolton – small ex-industrial town
Typography of villages small medium towns and cities is very different.
Divided into 6 Characteristics:
Ex-industrial towns
Coastal towns
New towns
Market towns
University towns
Statistics and graphs from slide show core cities dominate
Asks:
Why care?
What are the challenges?
What can be done?
More slides with statistics show – changing patterns of employment most significant is:
Medium towns seen biggest drop in manufacturing
Large towns seen biggest growth in retail
Large Med and Small towns seen big drop in manufacturing very recently not just consequence of Thatcher
Store closures in towns has provided acute issue: e.g. M&S 92% closures in towns (35 of 37) and banks 50% closures (353 out of 700) 186 of 200 Post Offices closing in large towns
Growing divide – Cities – generally young diverse creative and liberal creating different type of consumer with more Labour voters, more university graduates, less likely to own their own home, socially liberally and relaxed about social change. On the other hand Towns – are conservative, less diverse, need more care for ageing population, hence less footfall in shops, less likely to attend university and tend to be uneasy about issues like immigration and socially more conservative in their views
Old age dependency Graph – since 1981 big divergence of core cities that have younger population to towns where population is older. The exception to this is University Towns. Market towns have seen the biggest increase in ageing population
Skills and Education Graph – More Graduates in cities than villages therefore work force very different according to place. Transport much better in University towns than Ex-Industrial towns e.g. Oldham ( ex-industrial) has 37% with no qualifications compared with Brighton (University) has much higher qualified population with 39% of population being educated to graduate level
London has a big pull on graduates to come and work in the capital. It employs 22% of new graduates and 38% of those with !st or 2:1 degrees
London’s older population are moving out to the home counties or commuter belt
Broadband connection and download speeds slower outside big cities
Deprivation in Ex industrial cities is the worst for income, employment, health, education and skills
Big rise in Foreign direct investment in core cities but not in towns
Citizens perception – Towns less well off core cities better off
Dynamics driving trends:
Aggregate Economics
Infrastructure – Better connectivity
Higher Education – Exodus of young graduates
Internal migration – Poor health, unemployment, bad housing
What can be done?
Improved transport and connectivity
Training and Education to reduce skills gap
Housing – to reflect ageing population
Environmental – take the opportunities afforded by the countryside close to many towns
Cultural Capital – to make towns more attractive places to live especially for the young
Lower cost business rates to make towns more attractive to investors
Investment in business (eg FDI) to catalyse the economy, leading to inflow of work force and more spending
Fix the skills gap – more local training schemes and more graduates to return to towns after university
Devolution model – one that reflects real demand for more control from people in towns and not focus on just core cities
WJ Suggests visiting website for further information:
13.52
Lisa arrives and stresses how important this is and wants slides passed on as we need regeneration and support to the Retail Sector
Thanks Tamara for pulling it together for the most popular and hardworking APPG
Lisa introduces Bev
Bev Malik – Fashion Retail Expert at Fashion Roundtable
BM reads her script – Introduces what she does and has always worked in retail. Her observations are:
Increased shift in brands going direct to consumer
State of retail – weathering retail armageddon
KPMG – Score only 77 historical low 76
In 2018 2400 stores closed
Bricks and mortar are down
Fashion biggest losers 104 units down followed by Pubs 99 down
Causes:
Fashion – Brexit uncertainty and confidence
British brands suffered bad PR
Staffing supply chain
Consumer concerns – ageing population
Fashion is not a necessity it’s a desire
Online challenges it is not cookie cutter model
Rapid delivery from online
Hard to Omin retail
Smaller Bricks and Mortar businesses are suffering more and being left behind
CEO of larger stores are not picking up on service
Visiting M&S in Marble Arch for her father – they no longer have full size range anymore because they steer customers to buy online for sizes unavailable in store. Older customers are not online shoppers so are being left behind and service is lost
Product and consumer are badly matched. They are not listening to the customer
Risk aversion happens
Consumer transparency is a pleasure demarker
Leeds students buying very differently from London
Brexit is soother of woe
Shop in sale Black Friday mid season not before
Luxury market is too reliant on ME and Asia – all eggs are in one basket and not future proof. It is vital but masks income from other sources
Super Brands and Super winners make up just 20 e.g. LVMH and NIKE at the top but little or no backing for new or smaller players
To evolve:
B&M (Bricks & Mortar) shops need to provide shopping through pleasure
Selfridges greatest store providing – theatre innovation inspiration experience
Consumer desire – Listen to consumer – story of thought
LVMH – Creating Boutique Hotels for Experience
Engage with customers
Coffee shops doing well because they are engaging
Collaboration – seeds today are not harvested today
Wholesalers looking at retail to give healthier margin and closer contact with customers
Awareness innovation and Engagement
Lisa introduces Frances:
Frances Card – Advisor to Fashion Roundtable former COO to Matches
FC
Going to disagree a bit with Bev as I am more positive – I love it
Lucky place is online
Reversal of online to B&M (Bricks &Mortar) even Amazon going B&M
Big Change but positive
Sustainability – Block Chain ( bit confused)
We have evoled in our Industry
How? – When we had mail order that was difficult creating a different market place because of logistics etc.
In 2000 the internet arrived – not work so well because of the crash
Online tried to replicate B&M but it didn’t work.
Brilliant Sale person has a vocation – they are retails best asset but paid mini wage but know what customer wants how much they will spend and can offer alternative choice etc. This is not possible online – How do I buy for internet? B&M and online same but v different
Moving business into online for Matches HN and Liberty we were able to access the world
Lots of issues interacting with customer online
How do we use PR? photography?
It was great evolution – only windows available online
No need to open B&M today – No need for security guards on the door for instance so reduces costs
We made lots of mistake
Tamara interjects and reminds FC only couple minutes left
FC – Let online have its own personality – social media has released the online market
Tricky thing – relationship with stock because how do you buy for it to be delivery in 50mins
Skill set for retail has evolved – Customers in Uni towns with degrees are more intricate
Need to create separation between Online and B&M – average order traffic and conversion
‘Maisy’ – build data bases so we can see what they were buying – they were equity metrics have changed
Returns – how do we not get returns – online can see what comes back
Out of 19 online purchases 17 come back
How do we reduce and manage returns
The Future:
Farfetch – online store
FDI (stock control)
Lisa adds that she has been invited by the APPG for Block Chain. This is so good to attend because she does not knows herself what it is. She also mentions:
Innovative – recycling clothes bin in Houses of Parliament
Going to Copenhagen
Going to V&A
There is great interest in this
Lisa introduces:
Anne Alexandre RSM Manager British Retail Consortium
AA – It is good to look at real retailers – uses slides and graphs for presentation
KPMG is Sales monitor – we give back information of what is sold
3 things influence this: Environment Digital Policy for Retail
Shows graphs that focus on last 3yrs
Brexit – £ has dropped
Low real wage last year had negative growth just clawed back to 1% growth this year
Inflation on food seen big increase but declined after last year
Non food slowing down – constraint on food spending means less to spend on non food
In last 2yrs food took lion share
Clothing and footwear in last 2 yrs growth is flat
Challenging environment since 2016 – Negative growth and only growth from online overall
26% growth online in last 10yrs but might not continue at that rate – there is more to stores than B&M and online
Shift from Store to Online has seen big growth but there is stagnation
Fashion has decelerated especially for stores and continuing
Fulfilment has boomed from stores to online
Warehousing is 24% higher
Online on non food is going down – GDPR to do things a bit differently being one factor – Online has its own problems
Clothing Sales over year Christmas and Black Friday and June both online and store are same
Revenue 3% Wages10% Business Rate 8% means more costs
CVA cutting costs going to lenders – BRC 9%
Retail bears the heavy burden of business taxes
Effects:
Brexit – concerns how import export taxes and tariffs will change
Business Rates – sometimes free will it continue
Employment – better training for jobs etc
Lisa – We have put written questions forward in parliament for policy for those interested in this APPG. We did learn about CVAs and business rates and changes. We need to make Fashion from Fashion and Retail a priority.
Lisa introduces –
Charlotte Taylor-Phillip Senior Public Affairs Adviser at the Federation for Small Businesses
CTP – Introduces herself and explains role and function of FSB and how it represents its 170,000 members
In last 20yrs seen irreversible change. The arrival of Amazon and other online services provides a new competitor of which we have not seen before. The retail sector and small businesses will never be the same
Issues like rising business rates and soaring employment costs are out of control of small businesses
British Retail Consortium (BRC) analysis estimates 9000 less jobs in retail by 2025 with women taking the brunt of these losses
Add Brexit to the domestic picture with its continued uncertainty lowers small business confidence
FSB is neutral re Brexit however a No deal could seriously damage small businesses and we therefore supporting a transition period, whatever happens
5th of businesses trade overseas, overwhelmingly with EU and will need to adapt to new procedures etc after Brexit
1 in 5 small businesses employs someone from the EU – settlement system is complicated as I have just been through it with my husband
Administration burdens will stop small businesses trading overseas (1 in 10 said so) and turn down opportunities to trade in new market because of lack of access to skilled workers to grow business
Uncertainty continues and concerned by reports that larger businesses are passing on risks to smaller businesses through their supply chains
UK Shared Prosperity Fund provides regional funding and support to business – this is all on Hold until we leave EU
Small Business Confidence Index provided worrying results:
Confidence is at lowest level since Index began 9ys ago
9 in 10 small businesses are not planning to take on new staff
Exports are at record low
Positives:
Click and collect is growing and increases footfall
Independent retailer is increasing particularly in outlet services
Consumer needs are changing and so too town centres which gives new opportunity for small business to take advantage
75% small local retailers had no online presence – this is opportunity for them to access global markets
FSB has worked with Government to reform Business Rates that are complicated bureaucratic and restrictive e.g. Relief is provided for small business on first site but then has heavy business rates to pay on a second site when a business grows – this does not encourage small businesses to grow
Lack of free parking and local infrastructure is big issue for small business 65% of small business view their van or car as crucial for their business
Lack of access to cash machines and banks has negative impact on consumer and businesses
Looking to protect Post Office network and build banking services into this network
Be positive there is no quick fix and it needs joint effort from central and local government. Small business community is resilient and confident that we will see new businesses starting and existing ones growing despite the many issues that they face.
Lisa – Query raised about finish time 3pm not 3.30pm. Please do email with question and will put it forward – Tamara will share data via Fashion Roundtable
Lisa – we talk cars every other day in parliament but Fashion is key industry
Close 14:55 and we all fled the room as a stampede for the next meeting flooded in Lol!
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