Midlands Insider Retail Breakfast
It’s been hailed Super September, when Birmingham’s retail offering takes off as Resorts World Birmingham, Arena Central and the revamped Mailbox open within weeks of each other. But can Birmingham take full advantage of the opportunity to attract more visitors, people and investment?
What is the perception of Birmingham as a retail destination?
Birmingham is recognised as a retail destination nationally and internationally. Retail is the biggest part of our visitor economy, and we’ve been successful in attracting international visitors, those from this country and inward investment – Birmingham saw the highest migration from London last year partly because of our retail offering and the quality of life. But it would be wrong to say that Birmingham hasn’t suffered from reputational issues, which have left a legacy to this day and sometimes affect our economic growth. We’ve been working with businesses to overcome this: they sometimes find it difficult to pass on the positive message to others, largely in the South, but that is changing and our positivity is growing and becoming successful.
This city has great potential, but it has issues as a brand. I was at breakfast in London talking about filling the gap in the luxury product market in Birmingham when a man from a major retailer said “good luck with that.” When we started the upgrade of the Mailbox we knew we had our work cut out in pitching it, but we underestimated how hard it would be to get the brands interested in Birmingham. I’m happy to say that’s changing, thanks to all the positive media that’s been coming out of Birmingham over the past 12-18 months. But it has a long way to go: Birmingham is not as high as it should be in the rankings. In contrast, London embraces places like Edinburgh and particularly Manchester which is known for its creative industries.
There’s a growing weight of opinion in favour of Birmingham: it’s relatively embryonic, but it’s growing because the investment market is responding to it. The world has responded to places outside London because they realise the capitals big opportunities are being reduced. Asian and North American investors like the UK model. They like Birmingham, Edinburgh and Glasgow because they see big cities with opportunities.
Birmingham is lacking the more independent boutique offer. We need to create that offer and bring it together with the destination retailers. We then need to link the larger scale destinations together.
Are the developments happening in the city going to create opportunities for independent retailers?
There’s a retail revolution happening. It’s really what Birmingham needs, but we need authenticity too. Areas such as Custard Factory, where small and medium sized businesses and start-ups do have a small offer, are excellent. Part of the reason that Birmingham was voted one of the top 10 places to go in the world was because of its diverse shopping offer. We have the highest number of overseas visitors and highest growth rate of any UK area, including London. Shopping is a vital part of how we sell the city. Diversity is really important, but if we didn’t have luxury brands we wouldn’t be attracting as many overseas visitors. Developments such as Mailbox will mean more interest from China. We also want to target India, which has one of the largest project growth rates for high net worth individuals but you must have the luxury stores to attract them.
Any successful city will thrive on that balance between international and national brands, and independent smaller businesses. If you get the right quality tenant on the ground floor of a development you are going to attract the best tenants, best staff and a good quality environment. In Chicago it’s not about how tall the buildings are or what’s on the upper floors: it’s about getting the ground floor right; those boutique independents sitting alongside well known brands.
We want a mix of unique and independent brands in the Mailbox scheme. Harvey Nichols is going to attract brands to the Mailbox and the city. But let us see what happens and digest that.
Building a beautiful wall around your development and saying “this is heaven” doesn’t work. It’s all about connectivity and transport. So Grand Central will only have a handful of parking spaces relative to its size because customers to John Lewis and other stores will come by train not just by car.
How much does the nature of retail have to change?
Retail is undergoing a radical transformation, with click and collect (where customer order goods from a stores website and collect them from a local branch) becoming increasingly what people want. More than 55 per cent of retail purchases are influenced by a digital device at some point along the way. Far too many people are worried about the threat of the internet and not excited enough about the opportunities physical retail destinations have.
Retail is being seen as part of a larger leisure offering. If you make a place interesting, and the overall experience good, people will come, and stay. That’s what Hammerson will be doing in Bullring. They want to increase customers’ stay from an average of 1 hour 20 minutes dwell time to 1 hour 30 minutes. They will do that by offering leisure activities, such as restaurants. Smart phone technology and social media has a role to play in this. Click and collect is here and will evolve. Investors have to appreciate that retail changes very quickly and they have to respond to what customers want.
People come to Birmingham for shopping, food, and culture and entertainment. Visitors don’t just do one thing, they do a variety of all these. The more we can do to adapt our shopping destinations to align with those needs the better, because they will attract more visitors.
As a nation of shop keepers we are good at responding to the market. In the 1850’s we have the elevator, which took retail to the first and second floors. Then came cars in 1970’s and 1980’s, which was all about parking and accessibility. Now we have the online technology, which is taking retail into new areas. It’s no longer about creating large units and expecting one retailer to fill that, but getting a number of different retailers to work together.
How can retail help attract people to live and work in Birmingham?
Worldwide, Birmingham is being seen as an opportunity. In terms of property investment opportunities globally, Birmingham is sixth. I am not from Birmingham, but what I am seeing is pretty powerful.
Online retailers ASOS was looking at various places around the country for its back office function and selected Birmingham because of the price point and the talent in the city’s digital field. Birmingham is becoming increasingly important when it comes to businesses wanting to grow, but the city is not yet always on the top of people’s lists. The success we have had in the past 18 months is helping us get into that position. HSBC for instance, wanted to know all aspects of the quality of life in the city before it made its announcement of facing the head office of its retail operation in Birmingham.
It’s not just about the offer in terms of retail, but leisure too. It’s also just not about quality of work space or the job offer. It’s also about transport. It’s also about lunch, meeting people after work: that whole social thing. It’s just not about attracting people, it’s about keeping people here.