Retail think tank warns on future of department stores

In 2025, consumer values will change, Stores will relocate from the traditional high street department stores will lose influence
By 2025 consumers will prioritise buying products which are sustainable and ethically sourced.
// In 2025 consumers will place “values” above “value” when choosing where to shop. 
// Shops will relocate away from the traditional high street
// The need for department stores will reduce significantly 

A leading retail think tank has issued a warning about the future of department stores and its place on the high street.

The warming was issued in a quarterly report from the KPMG and Ipsos Retail Think Tank (RTT), which also looked at the landscape of shopping in 2025.

RTT members said retailers’ future success would be impacted by their ethics, environmental record and operational transparency.

The report indicated that consumer demand could be replaced by a need for sustainable products which are ethically sourced.

“By 2025, continued scrutiny into supply chains, working conditions and provenance will lift the pressure for retailers to be lowest cost at any cost,” said Martin Hayward, founder of consultancy firm Hayward Strategy and Futures.

Aside from retailer ethics, physical stores in retailer’s portfolios are expected to decrease and then relocate from traditional high streets.

Jonathan De Mello, head of retail consultancy at Harper Dennis Hobbs, said: “Retailers are looking for fewer stores not more – and it is increasingly about being in the right location as opposed to saturating the market with stores.”

The report indicated that retailers would move to transport hubs, out of town shopping centres and remain on key “premium” high streets such as Oxford Street.

The RTT also voiced concerns for the future of department stores.

It said that six years from now, brands will sell directly to consumers leaving department stores out of the process.

They continued saying that brand flagship stores will assume the current role of department stores and personify the brand through experience and complements.

This will leave department stores struggling to compete for the best brands to sell, and consequently competing for customer footfall and sales.

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