Town Centre Futures 2020
Read the full Town Centre Futures 2020 whitepaper.
The UK’s town centre in 2020: a retail relic or high street hotspot?
Report urges towns to embrace technology and put changing consumer needs first
Experian has published a new report entitled Town Centre Futures 2020, which sets out how the UK’s town centres will have changed by the end of the decade and what town centres, high streets and retailers need to do to survive and thrive.
Though facing tough challenges Experian’s report stresses that the UK’s town centres can survive and thrive beyond 2020, provided they understand and cater to the distinct needs of their local communities, while embracing technology to boost the high street experience.
The report identified key factors that will leave a permanent mark on 1,200 UK town centres by 2020.
The rise of savvy senior shoppers
UK consumers are getting older and becoming increasingly savvy shoppers. In five years time Experian predicts there will be half a million fewer teenagers and young adults in the UK and in ten years time, three million more people in the UK over the age of 70.
Between 2012 and 2020, 79 per cent of UK town centres will experience at least a ten per cent growth in their 50+ population. This ageing population will increase the need for town centres to offer facilities such as good access, health services and public conveniences, as well as a focus on face to face service and opportunities for socialising and leisure activities.
Some regions will have much higher proportions of older consumer than others. Town centres in the East Midlands, the East, the South East and the South West will have the highest growth in their 50+ populations:
- 51 per cent of town centres in the East Midlands will have a high proportion of older consumers especially Sleaford, Grantham and Swadlincote
- 46 per cent of town centres in the East, particularly Thetford, Braintree and Huntingdon, will have a high proportion of older consumers
- In the South East 37 per cent of town centres will have high proportions of older people, particularly Basingstoke, Ashford and Aylesbury.
- In the South West 37 per cent of town centres will have a high proportion of older people notably Chippenham, Bideford and Frome
New price conscious consumer groups will emerge by 2020
Meanwhile, three new major consumer groups will emerge and heavily influence the town centre’s health - Daily Challenges (the ‘squashed bottom’) Tough Vintage (struggling elders) and Family Values (hard working older families on restricted budgets) - with reduced disposable incomes will emerge, permanently changing buying behaviours across the country and creating thriftier and more price conscious shoppers:
- Daily Challenges – the so-called “squashed bottom”, is made up of hard pressed singles and families prevalent in the North West, particularly Blackburn, Salford and Runcorn, the North East, specifically Hartlepool, Darlington and Stockton on Tees and in Bradford, Harehills in Leeds and Halifax in Yorkshire. With low incomes and poor employment opportunities they are looking for value and are avid technology users for price comparison, voucher hunting and socialising.
- Tough Vintage - made up of struggling elderly singles and couples in Wales - Merthyr Tydfil, Treorchy, and Abertillery, in Motherwell, Irvine, Coatbridge in Scotland and the North East, particularly Peterlee, South Shields, Gateshead, who must all stretch their limited resources to get by. Often in poor health, they have little disposable income, relying on State support and value a sense of community. In retail terms they look for service and local places to shop.
- Family Value – mid to lower income, hard working older families make up the “squeezed middle”. They are restricted by tight budgets but living to give their children the best they can. Found primarily in Wales(Llanelli, Pontypool and Cwmbran), East Midlands (Worksop, Mansfield and Alfreton) and the North West (Workington, Barrow-in-Furness and Hindley) these families are hard working with modest incomes. Being price conscious also makes them internet savvy and they use technology for purchasing price comparison and socialising. They look for a retail experience – a safe and attractive place to shop.
However, some consumer groups have emerged positively from the recession, including:
- Retiring in Style – affluent, prudent pensioners enjoying a comfortable, tranquil retirement – found in the South West, Wales and the East of England
- Top Table – the country’s most affluent families and older couples, including wealthy professionals enjoying their business and leisure interests – primarily in the South East, East and London.
The Internet. Friend or foe?
- By 2020, technology will play an increasingly pivotal role in the success of town centres. While the trend for searching the Internet for the best bargains will continue so that between 2011 and 2015, the proportion of all online retail based spending internet will increase from 8.9 per cent to 12.1 per cent, m-commerce and Click and Collect schemes offer opportunities for innovation for retailers.
- The increase in technology/social media will impact everywhere, but the East Midlands (63%), the East (49%), the North West (38%) and Yorkshire and the Humber (38%) will all have the greatest proportion of online shoppers by 2018. In many cases, these shoppers are from hard-pressed and rural consumer groups that are looking for both the choice and value that online offers.
- Online shopping will be highest amongst ‘middle England’ groups, n the East Midlands and the East, and lower among urban singles and poor groups in major cities and urban London.
- Overall, by 2018, more than half of the population in at least 500 towns will have become frequent online shoppers. This will mean more retailers will need to adopt Click and Collect and town centres marketing themselves as convenient hubs for picking up products, for instance through high street lockers and embracing m-commerce and social media to develop their online presence, offering real-time vouchers and loyalty apps.
James Miller, lead consultant, Retail & Property at Experian, said:
“The Portas Review put the spotlight on the historical reasons for the decline of town centres, but there’s been little or no attention paid to potential drivers of future change. The trends we’ve highlighted will change the complexion of the high street forever. By 2020, the UK will be a very different place with a shift in shopper make up and a far greater role for technology.”
“The UK’s high streets and town centres have a careful balancing act to play. How they tackle these major drivers of change will be crucial. They must fulfil the modern need for convenience and value of those with increasingly limited resources and incomes, but not to the detriment of quality and service, sought by older and more affluent consumers. At the same time they need to embrace technology to enrich the shopping experience by combining online shopping with the often more convenient option of collecting goods in the town centre.”
The report is part of Experian’s Town Centre Futures project, a research initiative drawing Experian’s own extensive retail and economics data and insights. Experian’s new Town Centre Future reports have been designed for Town Centre Managers, retailers and other parties with an interest in what the future may hold for over 1,200 town centres. These reports draw upon Experian’s wealth of data about people and places, and provide a snapshot of what centres look like today, but also what they may look like in the future. They offer critical insight to help develop action plans tailored to the unique challenges and opportunities presented by specific town centres.