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OPINION
The benefits of
buddying up With prime retail locations demanding a premium, there’s a case for toy shops to buddy up with a larger retailer and take advantage of their floorspace and readymade footfall, says John Ryan
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t’s something of a truism that it’s been a tough couple of years. We’ve seen large businesses go to the wall, a sharp drop in GDP (and now, apparently, a pretty steep rise of the same) and a lot of people fearful about what the future holds. And among all this turmoil there have been the retailers. This is the group that has been worried from the moment they were told to shut their doors. As a shop, selling toys or anything else, how do you make money if you’ve been told you can’t open your doors? Well, now you can open them, but the point about the intervening period is that people have got used to remote shopping and when they do head into stores, they expect more. This might seem to point towards better, but fewer, stores - as there will be those for whom home shopping is now the everyday norm and the idea of stepping across the threshold of a physical store is in some ways rather strange… dangerous even. All of which means there are fewer stores overall and landlords may well be looking to capitalise on their best locations. In a somewhat counter-intuitive moment, the closure of a large number of shops across the country may even mean that the best sites are more in demand than ever. ‘Prime is prime’ is the mantra chanted by those in the retail property world, and practically this tends to point to getting the most out of places that are in demand. For retailers this means that while they may wish to be in a particular shopping centre or in the middle of an in-demand high street, they may struggle to afford the rent. Yet having to settle for second best might seem a poor move. So what is to be done? One answer is clustering. If rents in prime locations are on an upward trajectory, the chances are good that those already in such favoured places may opt to take smaller units when the time comes for rents to be reviewed (which does seem to happen with ever-increasing regularity). There is also the question of how much space you actually need to make some kind of retail statement that will chime with shoppers. The answer is: probably less than you currently trade from, and this being the case, there is a certain amount of shop-in-shop action to be had. At this point it’s perhaps worth noting that nothing is fixed in stores. Three examples suffice to show what’s happening. Decathlon, the purveyor of sportswear and equipment from large edge-of-town sheds, has recently opted to open in small spaces within branches of Tesco; while over the past year DIY giant B&Q has been opening shop-in-shops within Asda
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superstores. Now take a moment to consider Next, which is gradually morphing from being a clothing retailer to a quasidepartment store in which everything from Paperchase cards to a cup of Costa coffee are available. On the face of it, you might struggle to understand why anybody on an Asda food shopping mission would take a moment to buy some paint brushes and a few tins of paint. But they do, and there are benefits for both parties. For the host retailer, excess space is quickly (and profitably) used up and where they might have had to spread themselves thinly, such retail husbandry becomes a little less urgent. For the tenant (because that is what the shop-in-shop owner is) there is the benefit of being part of an organisation that has reliable footfall and is in a winning location. The real point, however, is that the whole is a lot bigger than the sum of the parts. By putting several retail brands under one roof, a destination is created of the kind that will attract shoppers who might not normally frequent the players, were they to trade on their own. So what about toy shops? Could they be part of this form of clustering - and would host stores welcome them? Probably, for no better reason than that keeping a big space filled and making it meaningful for the shopper is a challenge, and hope does tend to spring eternal when it comes to new ideas in retail. A toy shop in a hypermarket then? Of course, there is precedent for this, as evidenced by Sainsbury’s store in Selly Oak, Birmingham, which boasted a Chad Valley (owned by the grocer) toy space when it opened in 2018. Now transfer this line of thinking to your toy store and imagine whether it might flourish in an environment of this kind. Or perhaps it might work in Next. The fashion retailer has a large kids’ clothing department and on this reckoning, a toy shop might fit in as part of the mix. In truth, there is almost nothing that wouldn’t sit comfortably alongside something else, and the only caveat is don’t try to gain entry to a big store that already covers what you do, to some extent. Clustering makes sense in the current climate. Do it well and you could find yourself with an arm of your business in a location that it might not have crossed your mind to consider. In theory at least, everybody’s happy. And what’s the worst that could happen? You pull out again. Surely this must be worth a second glance, at least?
By putting several retail brands under one roof, a destination is created of the kind that will attract shoppers who might not normally frequent the players, were they to trade on their own
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John Ryan is Stores Editor of business magazine Retail Week. He has worked for the title for more than a decade covering store design, visual merchandising and what makes things sell in-store. In a previous life, he was a buyer.
