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| Is the end nigh for window shopping? |
The last blog entry concentrated on vacant shops at the top end of Oxford St. Since then I have read a couple of articles on pricing / currencies / unemployment which lead me to think that possible there is more to it (and needs explaining) for the closure of retail shops that are occurring not only along the upper end of Oxford Street. Just look at the last comments by the David Jones CEO to confirm this. People are shopping differently and don't intend coming back anytime soon. Maybe - they have had enough of being ripped off!! And what does this mean for the Built Environment?
I was reading an article in the Financial Review by Richard Denniss on Thursday 3 May 2012 and it caught my eye for the following reason. Why is that we have a free trade agreement with the USA, yet goods are still more expensive here than there? With online shopping available in the two different countries one must (apparently) have a USA credit card for it to purchase goods on a USA website. Tiffany's and iTunes were the examples the writer gave. It made me think. It does not appear to be a true free trade agreement, because if so the prices would be set as a say 'equaled price' and adjusted as currencies go up and down. (I understand my innocent view in free market is showing my ignorance to the true political pressures that actually go on). Maybe, it is just what the retail sector can get away with, so they do it. Who can blame them.
We have all - enjoyed the ability to shop for goods which we feel we are getting a discount on. Denniss' article goes onto mention that the Australian consumer "have been gouged so deeply, and for so long...."
The article has made we think further about retail and why in the years ahead - why will there be any need for the current level of retail space in our Built Environment? We could really produce a good (anywhere), with zero need to have any 'presence' in other cites or countries, yet enjoying the reach and coverage of the world. Everything can really be done online. Or can it?
One option of the future is company A possibly have a exhibit shop in a key city centre where a high density of people can view their goods in person and then 'hop' online in the current shop and buy or go home and buy later. And though not the 'instant gratification' we all crave for they receive their goods in the mail in a prompt time. This will save many brands from high retail rent and possibly let them compete with on-line competitors.
How are governments dealing with this - some impose high taxes on goods imported into their country. Some such as Argentina as high as the good itself. (try and purchase a iPhone, kindle on line for example) This is done, so it is said to 'protect and build' the industry that are trying to develop or are selling similar items in the said country. This does not go well for the upcoming younger generation who crave for more. Other countries just shrug the shoulders or take action when business representatives try and influence governments on this and note that unemployment will rise if they sit idle.
So should we really bother about it - why care? Why not jump on board? Should we just let the free market iron it all out? Should governments try and get ahead (stay in power) by imposing taxes or manipulating their currencies by printing money?
The current model for re-development of a site includes generally the provision for a 'shop front' on the ground level with residential units above. For how much longer will this model be viable? What are valuers' putting within their feasibility to finances for these developments? It is all well fair to say in 2012 what a rent may be, but what in 2016 when the world has evolved for right or for wrong.
Josh,
ReplyDeleteAs the owner of an old shop (now my residence), I would suggest this is just another evolution that we are going to go through.
Where once strip shopping was the way and each suburb had their own main street with a bank, post office, grocer, butcher, etc, these have now all been centralised into local and larger regional shop shopping centres.
Having recently gone to a large shopping centre, to me they are moving away from the basic retail destination and are becoming more of a social destination.
The centre I visited has a cinema, restaurant precinct, children’s play area, bowling ally and a gym and is more like social meeting place than merely a group of shops placed together.
From the crowd that was there, it was more a place to be seen and hang out than to shop.
Will these large centres disappear due to internet shopping? I would suggest that they may change some of their focus and possibly reduce their profits, but where once the local kids used to hang out at the corner milk bar playing space invaders, now they appear to be hang out at these large centres texting on their phones.
Maybe I am just getting old and reminiscing about the days gone by, but to me it would appear shopping has become more than a case of getting what you need and more of a social activity that will be very hard to replace with an internet based alternative.
Possible in the future the bottom levels of mixed use developments will be retrofitted for residential activities as many corner store were 20 years ago. Is this a problem, I would suggest not as from a built environment perspective, a shop with high ceilings and clear spans can easily be turned into a residential or commercial use.
That’s my two cents worth anyway!