Video: Yorkshire Post Business Breakfast on retail

THERE will always be a consumer desire for bricks and mortar stores despite the increasing popularity of Internet shopping, according to three retail leaders speaking at the Yorkshire Post Business Club.

The first speaker was Gerald Jennings, one of the key figures behind Land Securities’ £350m Trinity Leeds development.

Mr Jennings said there has been talk about 20 per cent of shopping going on line.

Sign up to our Business newsletter

“That number is going to continue to grow,” he told an audience of business leaders. “Will that mean everyone shops on line? Clearly not.

“We have to make stores exciting and interesting places to be because we need to get people away from their monitors and increasingly their mobile phones.”

He said that consumer habits have changed.

“They want and expect high levels of gratification and they want it now. That’s feeding internet sales.

“They want their customer experience to go beyond just the norm.”

He added that this expectation is growing all the time and customers want to be entertained.

With this in mind the group is increasing the percentage of restaurant and leisure space at Trinity Leeds from the normal 10 per cent to around 20 per cent.

Ian Filby, chief executive of sofa retailer DFS, said the internet has transformed the way we shop.

“Five years ago our customers would come to our stores and that was their first experience of what our range was. Now at least 80 per cent of our customers know what our range is because they’ve been on the net first.

“The future of retailing is increasingly going to be about people browsing the net, looking at their iPad, looking at an app, before coming into store.”

When asked what the future is for retail, Mr Filby said: “One of the in phrases is omnichannel. Multichannel is about having lots of different channels. Omnichannel is about making sure they all interact with each other so the customer can move seamlessly between the channels.”

He believes that one impact of the internet is that retailers will want fewer shops.

“A few years ago people would say I’d better have a chain of 300 stores, then they’re starting to say 150. Some people are now saying I can build a chain between my online and maybe only 30 to 40 stores nationally. That’s a big change in only a few years and will have a big impact,” he told the audience.

The second speaker, Andrew Boyes, managing director of department store chain Boyes, said: “People still like to go in to town shopping and it’s a social thing. There’s a social element.”

He said that while the internet is cited as a threat to the high street, he believes people will still prefer to buy the sort of products Boyes sells from stores rather than buying them online.

“A number of retailers have discovered there’s quite a difference between selling online and selling profitably online.

“We’re developing things so we can sell online in a profitable way. For last few years we’ve run an eBay store which has enabled us to experiment with what does and does not sell online.

“It’s quite amazing that some of the lines that are real fliers in the stores won’t sell for us online. Yet some of the most unlikely products really fly out. Last year our eBay store sold many hundreds of crayfish traps – not something you associate with our stores.”

Mr Boyes brought along a wide range of women’s underwear in his lunch box to illustrate just how many different needs his department store has to cater for.

He was helped on stage by Mr Filby, who held the different garments up to an admiring audience.

“Our business is complicated by the fact that different departments have different customer profiles,” said Mr Boyes, demonstrating what he described as “a pair of nice sensible cotton panties”.

“You can see you get plenty of material for your money, they have a good thermal properties and the fabric will absorb a small amount of moisture,” he announced to peals of laughter from the audience.

“There is a definite diversity of customer need to be satisfied,” he said. “The ladies who bought these very different products will all buy the same brand of toothpaste. That’s what makes it interesting, that’s what makes it fun. It isn’t straightforward.”

Mr Boyes said his store chain has traditionally targeted the lower value end of the market - the C2s, Ds and Es – but it is also attracting a lot of customers from the As, Bs and C1s in these recessionary times.

Mr Jennings said that as a result of this economic downturn, we have seen some fundamental changes and we will never get back to where we were.

“We’ve changed forever. We see an increasing number of voids. We wonder who is going to occupy those properties that are now void. Some will never be used as retail premises again.”

In keeping with the recessionary theme, Mr Filby said: “I think it’s very interesting the concept of chic and cheap. It’s ok to be savvy as a shopper.

“My wife is always telling me how much she has saved in her shopping not how much she has spent. In fact she likes spending more if it means she has saved more – an intriguing concept but one that we play with at DFS.”

Mr Filby also talked about DFS’s advertising shift towards the female shopper.

“People in my own organisation told me when I arrived that its 50 per cent male, 50 per cent female for sofa purchasing.

“I don’t know what relationships they’re in. I know I’m vaguely involved in the decision making. So this is typically a market that’s over 90 per cent shopped for, looked for, decided by the woman.

“The market has a very rational approach to talking to customers about the benefits, the price, as opposed to recognising that for women the sofa in the heart of the home is the most emotionally engaging piece of furniture in the house.”