An Agile Retail Case Study – Beleaf London
Updated: Sep 14, 2020
Two weeks ago, right in the middle of the coronavirus pandemic, we opened Beleaf Chiswick, our second CBD speciality store working with Canadian producer, MPX International. Yes – we opened a shop. A physical, real one. Given all the challenging news around high streets at the moment, that might seem a little counter intuitive.
But we didn’t – and we certainly don’t now!
Now, we all know the retail climate is a tough one, but in the last few months we’ve been researching and thinking hard about how brands and retailers who are agile enough, and brave enough to experiment and try something new, can capitalise on the ‘right now’ as a real opportunity.
This retail experience represents a great example of how an agile experiment can be super successful. Since opening a week ago, we’ve seen traffic – both instore and online, sales, impressions on social channels and PR hits - in excess of anything we achieved in 6 months of retailing the same brand from a central London location before the virus hit.
We think we know why.
This experience store is really an experiment in how to be an agile retailer; and we’re testing 3 key ideas here:
The first experiment we’ve undertaken is to test the value of localism. As we’re probably all experiencing, people are travelling less – for work, for shopping, for holidays, for social interaction. And we’ve started to see the opportunity for brands and retailers to think about reaching consumers in non-traditional, dare I say “less glamorous” places. So, our new store isn’t in a big shopping centre, or an Oxford Street-style destination. We’re in an urban village location on the outskirts of London, highly residential, with customers around us who both want to support their local community and shop local, and neither want, nor expect to travel far.
The initial results have been extraordinary – not only have we seen very comparable customer numbers to trading in more high profile shopping locations, but the commercials are worlds apart – you can imagine the comparative difference in rent, service charge, utilities, insurances and so on and so on.
KPMG’s recent consumer study identified a 25% change in consumer stated desire to shop local, identifying it as the most likely change customers expected to make permanent post pandemic.
We think localism is a great opportunity for customer acquisition and redefining the commercials of physical retail – and the results here have been very exciting reinforcement of that so far.
The second experiment we’re undertaking here is one around just how agile physical retail can be. One of the biggest challenges for brands thinking about their direct retail channels is commitment; leases of 10 years or more with upward rent and rate reviews, high staff commitment costs, big CAPEX spends for builds and centralised teams, and so on.
At the same time, the process for retailing is really cumbersome, with projects often taking six months or more to get off the ground.
We challenge that view.
In a digitised, disruptive world, it just cannot be the way to “do” physical retail.
For this experience store, we signed a lease for the space on a Monday afternoon at 4pm, and we opened the doors for trade on the Thursday.
We’re interested in constructing modular, agile retail experiences that turn the retail project plan on its head – how quickly can we source locations, agree terms, and open for trade?
In the same vein, we’re experimenting with how much data we can collect, analyse and adapt to in real-time – what are customers saying about the store environment, how is our VM working, which prices and promotions strategies are the most effective, how do our staff feel. We’re able to make changes and adaptations on a daily basis to get the maximum benefit from trading here.
This, we think, is the key way to allow brands and retailers to react with maximum speed – and commercial security – to opportunities as they open up, or to pivot if things need adjusting.
Online and Offline
Finally – we’re experimenting with what it takes to be truly omnichannel. I do not mean that from a brand’s perspective – we’re not interested in having a shiny website, or a chat bot, or WhatsApp shopping, for the sake of it. We are interested in finding out what a consumer really cares about and tailoring the journey to their wants and needs.
This retail experience exists because we’re a complex product; we’re helping people understand a relatively new sector, often exploring complex needs with them, and providing support and advice. We also do know that our physical experiences convert customers incredibly well – over 80% of people that walk through our doors buy something from us, compared to less than 2% of customers who discover us online.
What we’re trying to understand here is what the path to omni-channel purchasing is; we know that in the future, customers who understand the product and brand may well buy online from us, and we need solutions that make that a simple, efficient and seamless experience.
What we can learn from our physical experience is how long, how many touch points that journey might take; where we need to provide in-person services to some people, and where the physicality of retailing sits within our overall channel strategy, for example in helping support new product launches, seasonal changes or driving awareness in specific areas.
We’re a little too early to have expected to see significant repeat customs on our digital platforms yet, so we’ll have to update you on that in the coming weeks!
So Far, So Great!
In summary, so far we’ve already proven that activating a physical retail environment can be super-agile, and we’re on the road to demonstrating the same agility has real value in adapting and improving retailing in real time.
We’re also seeing some really exciting evidence that the increase in both localism and digitisation are offering really commercial and awareness-driving opportunities for forward thinking brands.