Tenants / Business Owners
Fact: High streets will only survive if the businesses on the high street sell high quality differentiated products that are in demand, with high quality service and an experience that consumers cannot get online.
The days of buying someone else’s generic products from China, putting on the shelves in your store with a massive markup without any attention to the customer experience are over (if for no other reason than you can get that stuff online easier and cheaper).
Likewise, business owners need to be realistic about what their expected earnings will be and stop renting ambitiously outsized premises with rents that go with it. If Debenhams, M&S, Mothercare, Bonmarche, Boots, Arcadia, Oddbins, Better Bathroom, House of Fraser and Mamas & Papas can’t do it, then neither can you.
Small is better, small is sustainable. If your first small business is doing great then don’t expand that store – go find another well placed small store in another town or suburb that can support it and open there. Do not make the mistake of renting large premises with large rents if there is any risk that your earnings are not going to support it.
There are so many opportunities for small businesses and so many ways to improve your business. In addition to rent, this article will only talk about two more.
People have never been unhappier – they’re trapped at home and never venture out. Online shopping exacerbates this. The high street businesses that expand the fastest will be the ones that make coming into their store fun. They will give their customers a reason to come back because they enjoy being there, not because they need something they’re selling.
And the last plea is to think about how your small business can negate some of the benefits of online shopping. Can you offer to home deliver a replacement product if it is the wrong size or there is a fault? Can you craft your request to join your loyalty club so it doesn’t sound spammy? For example instead of saying to customers of a wine shop, ‘do you want to join our wine club?’ Can you say ‘Did you know we can deliver wine to you as fast as one hours notice on Thursday, Friday and Saturday nights or arrange a regular order to be delivered to you each week or fortnight based on the types of wine you like and their price point? You’ll just get a text each week to make sure you want it before we dispatch it. Do you want to try it, people say they love it?’
Is the High Street demise inevitable?
No. But it needs decisive action from the Federal Government to remove barriers and lubricate the rusted processes slowly drowning high streets.
Local governments need to quickly shift gears to be proactive, along with being prepared to make short term parking revenue adjustments in exchange for longer term and more ethical tax revenue.
Landlords need to reframe their thinking of their asset as passive income to something they need to actively intervene to restructure, and it is in the banks best interest to support them to do it.
The foundations for a revitalised and sustainable high street would then have been created.