Retail Update: An in-depth look at the power of the pop-up shop, a NY Fashion Week round-up and BRC’s August stats

The Drum reporter Jennifer Faull provides news and insight on the latest developments in retail. Follow Jen on Twitter @jenfaull

This week's retail round-up analysed why pop-up shops are no temporary trend, as the BRC, Tfl and Appear Here discuss some of the innovative retailers shaking up the market. IMRG’s chief operations and policy officer, Andrew McClelland, also advised brands on how to experiment with technology without alienating customers, while James McGregor from Retail Remedy scrutinized the ramifications of House of Fraser sale to Chinese department store chain, Nanjing Cenbest, for £480m.

Finally, The Drum rounds up the best from New York Fashion week; BRC-KMPG’s August Survey results and looks at why forward-thinking retail brands are focusing on personalisation, user generated and shoppable content.

A good time to pop-up?

A recent study from the British Retail Consortium (BRC) estimated pop-up shops add £2.1bn to the British economy and suggested that this figure could increase by over eight percent by 2015. The same month as the results were released, traditional luxury brands like Marc Jacobs, Louis Vuitton and Anya Hindmarch all invested in ‘popping up’, setting up (temporary) shops across London.

In a feature first printed in The Drum’s 3 September magazine issue, the BRC discussed our rapidly changing high-streets and why turning to pop-up shops can be an innovative, and lucrative, proposition.

But setting up shop is not as easy as you might initially think, and helping chief marketing officers through the process (yes – it is a decision more frequently falling into the domain of the CMO) are companies like Appear Here, founded by Ross Bailey.

“In the same way ITV pitches space around the X Factor to all of the media agencies, we can do that physically. It’s giving retailers the opportunity to attach themselves to a moment in time,” said Bailey.

The BRC, Appear Here and Transport for London – one of the landlords on Appear Here’s roster - also delved into why retailers need to be innovative and the current trend of social currency.

IMRG: Think before you experiment

According to IMRG’s chief operations and policy officer Andrew McClelland, retailers have been guilty in the past of jumping on new technologies and ways of connecting with customers without putting enough consideration into whether or not it is actually wanted.

He called for retailers to listen more than has been done in the past as they experiment – especially as many of the trials are based on mobile and smartphones.

“That smartphone is in my pocket, my personal space, and if it’s pinging every five seconds when I’m walking down the high street then it’s not going to be long before I turn it off completely.”

Grocery sector continues to struggle

The BRC-KPMG Sales Monitor this week revealed that August had been another tough month for grocery retailers.

While the clothing and footwear sectors reported the fastest growth rate since December 2011, the food sector suffered its third consecutive month of declining sales, a like-for-like drop of 3.6 per cent.

The figures led David McCorquodale, head of retail at KPMG, to suggest that the battle between the 'big four' supermarkets shows no signs of ending.

It came as no surprise then when both Morrisons and Waitrose reported bleak sales figures for the first half of the year.

Despite an upbeat statement from Sir Ian Gibson, non-executive chairman at Morrisons, the supermarket’s pre-tax profits slumped to £239m for the six months to 3 August from £344m a year earlier.

Morrisons embarked on a £1bn price-cutting strategy earlier this year, a move intended to pit it against discount rivals like Aldi and Lidl.

However, Phil Dorrell, director of retail consultants Retail Remedy said the strategy was “desperate”.

"My worry is that a strategy that revolves around price cutting is a dangerous one. It certainly betrays a lack of imagination, a reversion to retail type. 'I'm cheaper' screams out 'I'm desperate'. And the discounters Aldi and Lidl, who own this terrain, are closing in.

"Dalton Philips will be excused this latest set of numbers but if something drastic doesn't happen between now and early next year, the curtain could well fall."

New York Fashion Week round-up

As New York Fashion Week draws to a close we looked back at the best digital and social offerings from brands like Tommy Hilfiger, Rebecca Minkoff and Michael Kors.

Tommy Hilfiger rolled out a gamut of digital and social activity for its show on Monday (8 September), and leveraged its ‘Social Concierge’ service to draw back the velvet curtain for fans watching at home while Hunter used geo-targeting technology on Twitter to push personalised content to fans.

However, leading the innovation at this year’s Fashion Week was Rebecca Minkoff.

The Rebecca Minkoff clothing collection was enhanced by the use of 3D glasses to bring to life stereoscopic 3D fabric while the accessories collection was filmly focused on the next season of wearable tech, including a gold chain-link notification bracelet and a studded lightning cable bracelet which can charge an iPhone.

House of Fraser - will Chinese buyout signal the brand's UK demise?

The short answer from James McGregor, director Retail Remedy, is we simply don't know yet.

"As with most corporate deals, there are potentially positives and negatives to this week’s sale of House of Fraser to Chinese department store chain, Nanjing Cenbest, for £480m," he wrote in an opinion column for The Drum.

McGregor predicted that the acquisition will see House of Fraser achieve a strong international reach, no doubt in China.

This is also good news for the brands operating within House of Fraser as they "hang onto the coat tails" of the deal.

However, McGregor wondered with the international plans could detract from its precence in the UK. There will also, he predicted, be departures.

"Could this deal spell the beginning of the end for the House of Fraser brand within the UK? House of Fraser could do worse than learn the lesson that Tesco did through its failed US venture: looking abroad can often cause you to lose focus and market share at home. This has cost Tesco dearly and House of Fraser needs to tread carefully," he said.

But one thing McGregor was sure of: Sports Direct founder Mike Ashley will hang on to his 11 per cent stake for as long as possible to get a decent return.

Join us, it's free.

Become a member to get access to:

  • Exclusive Content
  • Daily and specialised newsletters
  • Research and analysis

Join us, it’s free.

Want to read this article and others just like it? All you need to do is become a member of The Drum. Basic membership is quick, free and you will be able to receive daily news updates.