Weather. Calendar shifts. Experiential spending. Retailers have many “dog ate my homework” excuses for when trading is less than stellar, but when a late snowstorm* forces you to temporarily shut over half your stores, it’s bound to impact the top line. While it’s important to acknowledge the impact of the Beast from the East, it doesn’t take away from the fact that Debenhams, like many department stores today, is struggling to stay relevant.

Strategically, Debenhams is doing all the right things, but today’s results highlight the scale of the challenges confronting UK department stores. Not only are they facing a perfect storm of rising costs and subdued demand, but the original concept of a department store – one-stop shopping – has become completely eroded by online retail.

Unfortunately for Debenhams, many stores are tethered to long-term leases so there is no quick fix for addressing the shift to online shopping.Twenty-five stores will be reviewed as their leases come up for renewal over the next five years. In an ideal world, they’d be more bullish but with an average lease length of 18 years Debenhams doesn’t have the luxury of simply closing stores overnight. Instead, the focus will be on reinvention and rightsizing – they see potential for at least 30 stores to be downsized, in a similar vein to competitors like M&S and House of Fraser.

But make no mistake – the department store model is under threat. In the past, it made sense for retailers to dedicate 100,000-plus square feet to these ‘palaces of consumption’, aggregating lots of brands under one roof. But today, shoppers have access to millions of products at their fingertips, so the idea that a bricks and mortar retailer can still offer ‘everything under one roof’ becomes laughable. Department stores must reposition themselves to be less about product and more about experience. Winning in retail today means excelling where Amazon cannot.

Under Sergio Bucher (ex-Amazon), Debenhams is trying to do exactly that. They’ve embraced store reinvention, recognising that the department store of the future will be a place not only to buy stuff, but also to eat, discover, play and even work. Partnerships with brands like Swoon and Maisons du Monde create a point of differentiation, while the installation of gyms and beauty bars and potential collaboration with WeWork allow Debenhams to make better use of excess space while simultaneously driving footfall. Store reinvention’s not cheap but it’s better than standing still.

But amidst all this talk of transformation, it’s easy to lose focus on the basics of retail – price, product, service. This is where Debenhams shoppers have arguably been left feeling underwhelmed. Pricing must be sharper and more trustworthy, range must be simplified (though more compelling) and the overall proposition must become more experiential and service-led. Otherwise, they risk a lot of empty treadmills and brow bars.

*Reference to the snow storm occurred in January during which the UK was blanketed in snow for 2 weeks.

Article originally published in April on: https://nbkretail.com


The 4th edition of Paris Retail Week ended on September 12th after three days dedicated to Smart Phygital. Punctuated by conferences and the Paris Retail Awards ceremony, attending retail professionals shared their experiences and viewpoints on future retail trends.

Final report soon available on: www.parisretailweek.com

Save the date for Paris Retail Week’s next show from 24 to 26  September 2019

La 4ème édition de Paris Retail Week s’est achevée le 12 septembre après trois journées dédiées au thème du Smart Phygital. Au rythme de conférences et de la cérémonie des Paris Retail Awards, les professionnels du secteur présents à Paris expo Porte de Versailles ont partagé leurs expériences et échangé sur les tendances du retail.

Communiqué bilan bientôt disponible sur : www.parisretailweek.com

Rendez-vous pour la prochaine édition de Paris Retail Week du 24 au 26 septembre 2019

 

Previous articleStart-ups are shaking up tomorrow’s retail market
Next articleSmart Phygital trends spotted at Paris Retail Week
Natalie Berg is Retail Analyst and Founder of NBK Retail, a consultancy specialising in strategy and future trends. She has more than 15 years’ experience heading up research teams at world-leading analyst firms Planet Retail and Kantar. As one of the Top 30 global retail influencers, Berg has produced research on a number of industry topics including: convergence of physical and digital retail, click & collect, customer loyalty, discount retailing, store of the future and frictionless commerce. She is a regular TV and radio commentator and her views on retail have been published in the FT, Guardian, BBC, The Times, Retail Week, among others. Natalie’s latest book, about Amazon's role in shaping the future of retail, will be published by Kogan Page in 2019.