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The Role of Retailing in the Modern
Scottish Economy
Professor Leigh Sparks,
Institute for Retail Studies,
University of Stirling
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The Role of Retailing in the Modern
Scottish Economy: Structure
• Retailing in Scotland
• Drivers for Change
• Blended Retailing
• The Recession is Over
(Not)
• Retailing in the Modern
Scottish Economy
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Retailing is Proportionately More
Important in Scotland
• Retailing in Scotland:
– c24K shops
– Sales of c£25bn
– Employs c240,000
people
– GVA 15% of Scottish
economy
– 43m sq ft space
Source: British Retail Consortium
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The Scottish Consumers
• Locals• Tastes and products
• Rhythms of life
• Trading and shopping times
• Visitors• Perceptions of Scotland, its
land and its products -
castles, festivals, whiskies,
jewellery
• Expectations of Scotland
and Scottish retailing
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Drivers for Change
• Political Structure and
Trends
– Scottish Parliament and SNP
Government
– Scottish Planning Policy: town
centres and retailing
– Town Centre Regeneration
Fund and BIDS
– “Supermarket tax” and
“Health” Levy
– Taking on the Scottish Evils of
Tobacco and Alcohol
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Economic Structure and Trends
Source: Scottish Retail Sales Monitor
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Economic Structure and Trends:
Credit Crunch
Source: Scottish Retail Sales Monitor
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Drivers for Change
• Socio-cultural and
lifestyle aspirations
– attitudes and beliefs
– work and leisure
– public/private balance
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Drivers for Change
• Demographic structures
and trends
– Households increase
– Population predicted to
rise
– Ageing population
– In-migration important
(reversing long-term
trend)
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Drivers for Change
• Product and process
innovation
– Digital revolution
– Business transformation
– Blended channels
– Social media
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Drivers for Change
• Environmental changes and
trends
– Become carbon neutral
– Send no waste to landfill
– Extend sustainable sourcing
– Help improve the lives of
people in our supply chain
– Help customers and
employees live a healthier
life-style
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The Blended Retail Revolution
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Quick History of the Internet
Year Launch
1990 WWW invented
1995 Amazon.com
1996 Dell.com
1997 First m-commerce (SMS)
1998 Google; PayPal
2000 Tesco.com; Asos
2001 Wikipedia; Blogs
2003 MySpace
2004 The Facebook
2005 YouTube
2006 Twitter
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Dimensions of UK Internet
Shopping
• Verdict 2010 £21.5bn sales which
is 6.8% of retail market
• £35bn pa by 2014 (Verdict);
£68bn in 2011 (IMRG)
• Year on year 16% increase in 2011
(IMRG)
• 2000 to 2010 IMRG index up
5,772%
• 31mn online shoppers in UK
• 2009 Christmas Day £132m,
Boxing Day £281mn (IMRG)
• 1 bn parcels shipped from online
sales in UK in a year
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BRC-Google Online Retail Monitor
(Year on Year Change)
Note: Mobile is now c20% of total
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Social Media
• Consumer co-creation
• Communities
• Consumers we trust and
respect
• Insider involvement
• Immediacy
• Enhanced customer
service
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Marks and Spencer: “We Boobed”
• £2 extra for larger bra
sizes
• “Busts for Justice”
Facebook group
• 13,000 members in less
than a week
• Media pick-up
campaign
• Policy reversed
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The Blended Retail Revolution
• Has changed:
– How we shop
– How we think about
shopping
– How we tell others
about shopping and
retailing
– How retailers sell
– Retail operations and
practices
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The Recession is Over (Not)
• Structural Issue
– Population in wrong
place, of wrong type and
with less money
– Dereliction, blight and
arrested decay
– Tipping point for
locations and what is in
them
– Cost pressures piling on,
short and medium term
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Change in Multiple Stores, Top 500
Town Centres, 2011
Source: Local Data Company
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The Recession is Over (Not) –
Asda’s Income Tracker (UK)
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Asda Income Tracker
Region/Country Q1 2010 Q1 2012 % change
Northern Ireland £98 £83 -15%
Scotland £157 £144 -8%
UK £160 £145 -9%
London £287 £266 -8%
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Changing Landscape - Retail Think
Tank
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Let’s Pause …
• Long run change in what we think retail is about
(agents of social cohesion and change or agents of
social harm?)
• Long and medium run change in retail operations
and practices (how many shops do we need?
where?)
• New channels and issues about blending (collection
and returns for example)
• The worst (rec)(depr)ession we’ve ever seen (and it
could go on a decade longer in Scotland)
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Retailing in the Modern Scottish
Economy
• Strategic Objectives of
the Scottish
Government
– Wealthier and Fairer
– Healthier
– Safer and Stronger
– Smarter
– Greener
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Retailing in the Modern Scottish
Economy
Objectives Retail Issues
Wealthier and Fairer Vitality of places and wide social access to retail spaces,
across Scotland
Healthier Retailers as agency of change
Safer and Stronger The need to develop communities and places
Smarter The role of retailing in providing education and careers
Greener Reducing the social and public impact of retail activites
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Retailing in the Modern Scottish
Economy
• New versus Old Space –
how do we get a balance?
• Towns and High Streets and
the Modern Consumer –
what do we want from a
town centre?
• Entrepreneurial Activity and
Diversity – need to enable
local development,
especially in places away
from “destinations”
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• www.irs.stir.ac.uk
• www.stirlingretail.com
• 01786 467384
Contact Points