Forward looking Virgin Media to triple store footprint with help of “stores without walls”

Coinciding with plans to expand their cable broadband, phone and TV network to cover 500,000 new homes and businesses across the UK, Virgin Media announce, as part of a three-year development program, plans to triple their number of outlets over next 12 months.

Recession good for “challengers”

Proving that recession creates opportunity for “challenger” brands, Virgin aim to take advantage of cheaper rents and landlord incentives on offer due to a slowing retail sector – market analyst, Experian forecast that retail vacancy could hit 15% by end of 2009. Stores are planned for the likes of London’s West End, Meadowhall in Sheffield, Victoria Centre in Nottingham and Ropewalk Shopping Centre in Nuneaton.

Showcasing the “digital home”

While Virgin Media products are available in 4,000 independents the brand currently have just 27 own-brand stores. Virgin’s aim is to create interactive formats (much like Apple) that will build brand awareness, grab market share and showcase their range of family entertainment products and services for the “digital home”. Managing Director of consumer retail Peter Taddep explains, “This expansion will reinforce Virgin Media’s presence at the heart of communities across the UK and provide a valuable contact point for existing and potential customers.”

Stores without walls?

Most intriguingly, as part of their growth strategy Virgin Media have developed a new retail format for prominent mall locations named “Retail Lite”. Virgin Media describe their formats as a “new retail experience”, and believe that they are “the most advanced customer facing outlets”.

Apparently designed along the lines of a permanent walk through installation, new formats will sell the same range of broadband and mobile phone packages as a traditional store.

Recession should = Innovation

The easy option for brands is to cut back in an economic slow down, instead, Virgin Media are focused on the opportunity. Their approach illustrates the importance of investment in innovation. Virgin Media are banking on improving market share and establishing themselves in the marketplace for when the (temporary) recession ends. They are looking forward, while other retailers are reining back.

Empty high streets create opportunities

This week is the deadline for retailers to pay next quarter rent; reports suggest a new wave of cash starved retailers could be forced to shut their doors as a result.

Increasingly desolate high streets are showing visible signs of decline. Experian’s retail consultancy predicts the number of empty shops across the UK will hit 135,000 by end of 2009 – a record rate of 15% of the total. Of those chains that have closed administrators are only selling off a fraction of their estate, leaving a glut of empty stores.

Opportunities

With landlords under pressure, leasing deals can be done. With room for more negotiation, fledgling retailers or brands with aspirations to trial the high street may decide current market conditions present an opportunity.

Charities are getting in on the act.  “C@ Walk”, a fashion retail brand run by animal charity PDSA recently opened its doors in Northampton. Irrespective of your thoughts on the branding and design, the store – stocked with new not second hand ladies fashion – proves that market conditions suit some.

C@ Walk by PDSA

Pop up

While pop up retailing isn’t new, they are usually premium or exclusive affairs; Tyler Brule’s “Monocle” and “Eco Shop” in Westbourne Grove are recent London examples. Product brands like Pepsi, with “Pepsi Proper” have used pop ups to create brand experiences in LA and New York, forcing people to reassess the brand, due mainly to the brands that they partner with.

Pepsi Proper poster

Executed correctly, pop ups provide the means to create an event and sell on the high street. Brand awareness can be created and loyalty generated without having to invest in full retail fit out, permanent staff and all other operational costs. At the same time brands can bask in the glory of bringing energy back to an increasingly gloomy sector.

All that remains to be seen is whether retail brands and brand owners are flexible enough in thinking to give it a try.