Retail optimism: new stores + investment = growth 

You might be forgiven for thinking that the high street is on an irreversible course of decline, if the tendency of the (mostly tabloid) press to publish articles that are nothing more than round-ups of store closures is anything to go by. But that’s certainly not the case. Dig a little deeper, and you’ll be reassured all is not lost for retail: there are numerous brands expanding their numbers of physical stores, and investing in their future success by focusing on customer experience. 

What do Chanel, Superdrug and Mango have in common? The answer is that they all have plans to open multiple new stores in the UK in 2024. But unless you’re digging around in the newsiverse, looking at the business pages of the broadsheet platforms or keeping an eye on the specialist retail press, you’re not so likely to be aware of this optimism and proactive drive for growth amongst brands. Far more easily found is a slew of clickbait-style ‘list of store closures’ articles, which bemoan the state of the high street and give the impression that all is doom and gloom. 

Of course, there’s no denying that retail is facing its toughest ever period, with the economic shockwaves created by the pandemic and soaring inflation. However, examples of optimism abound in the retail sector, for those who care to look for them.  

Luxury retail growth opportunities 

In the luxury market, particularly, plenty of brands are identifying opportunities for growth. “I don’t think there is a single market, including the US, which we see as saturated. The US for us is still an under-developed market for luxury if you look at certain [indicators] on wealth,” explained Chanel’s global chief financial office Philippe Blondiaux, in a recent Financial Times article. LVMH brands including Louis Vuitton, Tiffany, Dior and Fendi are also following this trend, with various new openings planned in Europe’s key luxury retail locations, according to Cushman & Wakefield’s recent study on luxury retail – which also highlights similar activity from brand conglomerates Kering and Richemont. 

The topic of growth was also central to discussions at the FT Business of Luxury summit back in May, with associated themes including resilience in the face of uncertainty, brand elevation and ever-evolving consumer expectations, geographical shifts in demand, brand heritage and innovation, and digital-physical integration and sustainability as core values. “Ever more sophisticated consumers simply expect the digital and physical retail experiences to be seamlessly integrated,” explains Aura’s Stephen Todd, Operating Board Director. “They also expect personalised and immersive customer experiences. We see luxury brands are investing heavily in technology and data analytics, to not only meet customer expectations but go above and beyond, to delight and amaze, and drive growth.” 

In-store shopping enjoying a resurgence

Additionally, the popularity of luxury online shopping is waning, as evidenced by the high-profile failures of Matches Fashion and Farfetch, and brands are taking the opportunity to invest in experiential retail, which is proven to be the preference of shoppers in this valuable market segment. Indeed, a Business of Fashion report, in conjunction with Royalmount, found that 68% of luxury shoppers preferred an in-person experience when it comes to customer service. 

It’s not only the luxury end of the market that is showing optimism, either. In a recent message on Greggs’ website, CEO Roisin Currie announced that she is “optimistic and excited about delivering [their] five-year growth plan,” explaining that their growth strategy is indeed working, and that they are seeing strong progress in their target of doubling sales between 2021 and 2026. Meanwhile, it’s been reported that B&M’s new store openings have facilitated a 10% surge in sales, and Lidl has plans to build 12 new stores.  

In the middle ground, Hotel Chocolat is set to open 20 stores over the next 18 months, online fashion brand Sosandar is opening its first physical stores to roll out its new multichannel model, and Crew Clothing announced its intention to open 40 new stores by 2025, focusing on coastal and market towns. Flagship stores for Ikea, Sephora, Frasers, Nike, H&M and Gymshark are also expected by the end of the year. 

Elevating experiences to drive growth

All this just goes to show how much proactive innovation and strategizing is going on in the retail sector; brands that are investing in the future of their physical retail stores are investing in their future customers, and therefore the brand’s future profitability. “It’s quite remarkable just how committed the retail sector is to investing in innovation, to capture market share and achieve customer loyalty, even in a widely acknowledged tricky time for retailers,” says Adam Wilson, Chief Revenue Officer at Aura. “Our recent survey revealed that 50% of brands are planning to open new store locations over the next two years, while 68% are investing in the customer experience in store. Nobody is in denial about footfall and spend challenges, but there’s certainly a view that a proactive, customer-centric strategy can still drive growth.” 

If you’re interested in driving luxury retail forward, and discovering how to optimise the phygital shopping experience for improved footfall and sales, why not join us for our next event, at The Royal Opera House on 9th October 2024? Click here to register your interest. 

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