Now could be the ideal time for online-only retailers to open bricks and mortar stores in the UK, according to the Managing Director of a successful global internet business.
Kieron Smith, boss of the online bookseller The Book Depository, says the current market conditions suggest an increasing number of web-only retailers could soon make this move.
“It could be a good time to experiment,” he told Retail Gazette.
“In some areas rents are the lowest they have been for years and short-term leases are readily available - many companies could take advantage of the pop-up shop model.”
These are the views of a retail boss whose profitable company saw year-on-year sales increase 70 per cent to £60 million in the first half of its current financial year, however, and the general industry consensus is that rising commercial rents are actually playing a major role in the downfall of many retailers.
Local Data Company research indicates that the number of empty commercial units has been growing in recent years, with its latest annual Shop Vacancy Report showing that town centre vacancy rates in Great Britain increased from 12 to 14.5 per cent between 2009 at the end of 2010.
But from next month landlords will no longer receive rate relief from empty properties, and they will be keen to let out their premises rather than pay out extra costs for sites that remain unused.
At a time the government and business groups are trying to work out the best way forward for the British high street, Smith’s suggestions seems a plausible way of filling many of the empty units currently blighting town centres across the UK.
“If online fashion house Asos.com was to say it is opening 50 pop-up shops next Christmas I don’t think people would be surprised,” he continued.
“Its model can easily be extended on to the high street, although a more long-term set-up is questionable considering the current uncertainty surrounding the economy.”
There have been rumours about Asos and e-tail giant Amazon establishing a bricks and mortar presence in the past, but it is still a relatively untapped area for pure-play internet retailers.
According to Smith, the Bookdepository itself has often toyed with the idea since forming in 2004 but is yet to try the format.
The question is why would online retailers want to take the risk of opening high street premises when so many companies are finding it difficult to survive?
Smith, who started his career as a graduate trainee at WHSmith before forging a career in online retail with companies such as Game Group and Waterstone’s, said early experience on the shop floor was vital to his development as a successful e-tailer.
“It gives you direct contact with the customer and an understanding of what they want, which can be fed back online,” he remarked.
“Sometimes it can be difficult to get this engagement via the web.”