Exile on Main Street
Once upon a time, about twenty years ago, I was a student at the University of Leeds.
In my third and final year, we lived in an area called Woodhouse. At the end of our street was a tiny corner shop, and without going into detail, it sold everything that a student might need or want.
Fast forward half a lifetime to July 5th 2020, and the CEO of the world’s largest corner shop stepped down from the role he had held since 1994.
A few weeks earlier, In his final letter to his shareholders, he discussed the impact that the company he founded has had on the world.
“Customers complete 28% of purchases on Amazon in three minutes or less, and half of all purchases are finished in less than 15 minutes.
Compare that to the typical shopping trip to a physical store – driving, parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Research suggests the typical physical store trip takes about an hour.
If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that’s more than 75 hours a year saved”
Of course, in the US and elsewhere, it’s not known as a corner shop. Instead it’s called a convenience store, because instead of having to visit a chemist, a grocer and a bakery, you can have it all in one place.
Although, you’re still limited by physical restrictions. The wider the choice a convenience store offers, the larger it needs to be. Of course the larger it is, the less convenient it becomes.
So what Jeff did was figure out a way to give customers endless choice, and instead of having to go anywhere, he would hand deliver the items to your home within 24 hours.
And it’s not just Jeff that’s been at it. Previously, a man called Phillip was given a Knighthood. He then went on to become the self appointed King of the High Street. Some time later, he had his lunch eaten by a new breed of entrepreneur.
An entrepreneur who needed no physical stores. Just an online presence and the ability to invest millions of pounds in marketing methods which focussed on social media, influencers and retargeting.
Because the thing that disrupts established industries more than anything else is speed, and physical retail just can’t move as quickly as its online counterpart. It’s not perfect, but it is fast.
And the slow, cumbersome old King is having to adapt. That, or be cast on to the ever increasing pile of things which are no longer suitable for the modern world.
According to research by Savills, the US has twice the amount of per capita shopping centre square footage than the rest of the world, and six times as much as countries in Europe.
As a result of this overdevelopment, more than a third of malls in the USA are expected to have to close.
In the UK, redundant retail space could reach 30 million square meters by 2030. Many department store chains across Europe are struggling, particularly in those countries with the highest internet penetration.
In Hong Kong, on one of the world’s most expensive retail streets, vacancy rates have increased from 2% in 2018, to 15% in 2020.
Of course, like so many other changes, much of this has been hastened by the pandemic.
I have written previously about the 15 minute city, and the way in which the concept is challenging paradigms which have existed for over 100 years.
Namely that people would consider it more desirable to live, work and socialise in separate locations.
Now, areas of London like Kings Cross, White City and Battersea Power Station are creating destinations where people are choosing to play out a large proportion of their lives in single, micro destinations. Places where they have almost immediate access to the best of everything.
It’s not need based, it’s experiential. What’s important is how the mix of retail, leisure, office and home makes you feel. It’s also more environmentally friendly and most importantly, it’s extremely convenient.
Ah, convenience, and its willing other half, comfort. For better or for worse, the twin drivers of so much human innovation.
Things I’ve been inspired by this week
When Charlie Watts sadly passed away about a month ago I was reminded of an incredible documentary I watched late one Saturday evening back in 2010.
Stones in Exile charts the creation of The Rolling Stones 1972 album Exile on Main Street, which as luck would have it, also happened to make a good title for a blog post about the changing face of retail.
In 1972, the Rolling Stones, facing tax and management problems, left the U.S. and rented a villa on the coast of France. They hole up in the house for months recording "Exile on Main Street," their most reviled, then revered album ever