A Change of Heart - Challenge & Opportunity in Provincial Retail

APRIL / MAY 2016

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A CHANGE OF HEART

FEATURE

Over the past year, a concerning number of provincial towns have reported a proliferation of vacant shops. Elly Strang takes a look at retail in heartland New Zealand and what can be done

to stop the haemorrhaging of consumer spending.

RT743 16-25 Provincal Retail 3.indd 16 7/04/16 3:26 pm

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As late as 1959, only 54 percent of New Zealand households had access to a fridge. People would shop on a ‘need to buy’ basis, frequenting the local

butcher, greengrocer and corner dairy at their town centre. Fast forward 57 years to 2016, and times have changed.

Not only do most households have a fridge, but they also have access to the internet, where everything can be bought online – including meat, surprisingly.

There’s less reason to leave the house, and even less inclination to pop down to the local shops.

This development is just one factor affecting retailers in New Zealand’s provincial towns.

DEATH BY A THOUSAND CUTSIt would be difficult to pinpoint just one reason why some retailers in provincial towns are struggling.

Instead, the current climate has been shaped by various factors, including spending attrition, poor town planning and dwindling rural population numbers.

Chris Wilkinson, managing director of consultancy First Retail, says things changed for provincial towns in the 1990s and early 2000s when ‘big-box’ stores moved in.

Over this period, Kmart expanded across New Zealand, The Warehouse began scaling up to larger outlets and in 2004, Mitre 10 opened its first Mega store in Hastings.

As the big-box retailers settled into cheaper, larger sites on the fringes of towns, consumers started to bypass the high streets and spend their money at one-stop shops.

Lloyd Budd, director of commercial, retail and operations for real estate company Bayleys says town planners succumbed to pressure to let bulk retailers move away from town centres.

“Doing so erodes the vibrancy of cafes, smaller retailers and the business community in these centres to such a degree we are now seeing some places lose their heart completely.”

Raymond Jujnovich, manager of Jujnovich Gifts and Souvenirs in Kaitaia, a town whose population has declined steadily over the years to just under 5000, says big-box stores positioned away from the main street have eroded spending at independent retailers.

“Foot traffic has always been a problem for Kaitaia – when a big Warehouse comes into town and they put a new shop in place, that’s 20 shops in one [for customers]. They get tunnel vision.”

The next blow was the rise of online shopping. Wilkinson says time-poor consumers are

increasingly splitting their purchasing between online sites and bricks and mortar stores.

They do their research beforehand and work out what will save them time before heading out to shop, he says.

“People’s lifestyles are changing. There’s a lot more of what we call ‘purposeful’ shopping, which means the retailers that have strong online presence surface much higher in consumers’ search and prioritisation.

“People are sitting at home or at the office in these provincial areas doing their searching validation online, which helps them decide where to go.”

Figures released by research company Roy Morgan in December show the number of Kiwis shopping online rose to 49 percent - or 1.8 million people - in the year ending June 2015.

This had increased from 39 percent in 2011.One reason for this is that those in the

regions live a long drive away from the town centre, so having something shipped straight to their door is more convenient.

Wilkinson believes convenience is a higher priority than price for many consumers.

“It’s that certainty and assurance which is driving people towards these big boxes and online.”

Recent developments in property and dairying haven’t helped lessen the load for retailers.

Spending in the regions has been dampened by slashed dairy payouts, and the outlook for 2016 isn’t promising. Fonterra’s forecasted payout for milk solids was cut by 25 cents a kilo in March, guaranteeing a lean winter ahead for farmers.

Infometrics senior economist Benje Patterson says although this has been a big dampener to areas reliant on dairying, there are few places in New Zealand that count on dairying and nothing else.

“Most places do still have a few strings to their bow. What we’ve seen is other areas have been picking up and filling that void left by low dairy prices, like extremely high tourist flows.”

Bayleys’ Budd agrees. He says what’s happening in dairy isn’t reflected in the whole sector, with sheep and beef farming, as well as some sectors of the horticulture industry doing okay.

“I’m not saying the provinces are doing well, but there are no train wrecks or mass closures on the main street.”

Still, Patterson says some regions are struggling, particularly if they are off the tourist trail and not getting any economic spin-off from the Auckland boom.

These places include the Buller district on the South Island’s West Coast, which is in real trouble due to mining layoffs, he says.

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Chris WilkinsonManaging director of consultancy First Retail.


18 FEATURE

APRIL / MAY 2016

Taking a closer look at provincial New Zealand

WHANGANUIThe retailer: Tracy Hawker, who owns women’s fashion boutique Fifty Five and gift store Country Lane Originals says her businesses are doing well, but she knows of retailers hurting at the moment. “We have a number of empty stores in the CBD but we also have a rejuvenation programme being implemented where empty space is provided to artists to ensure the main retail area remains vibrant.”

The expert: First Retail’s Wilkinson says Whanganui feels like it’s “under siege”. “We’ve had lots of retailers contact us from Whanganui wanting help.” He says the MainStreet Wanganui organisation has had some success, but it may need extra resources from the council as retail is changing so rapidly and it hasn’t been able to cope as well.

The council: Chris Heywood from Whanganui & Partners says there

are empty shops in the CBD, but not a reduction in retail trade. He says town centre vacancies have increased mainly due to changing in retail spending patterns and the way people do their shopping. He says there’s a revitalisation project underway to help improve the CBD, as well as another initiative to have pop-up art shops in empty stores until landlords find a permanent tenant.

LEVINThe retailer: A store owner who wished to remain anonymous says town stakeholders were trying to make the town centre more attractive by adding stone walls and gardens into areas. They wanted to see their city being promoted more to residents of large cities like Wellington as a great place to move to or visit.

The expert: One of the challenges is many towns like Levin have economic development advisers that

don’t necessarily understand retail, Wilkinson says. “Levin’s an area that has so much potential, but there’s a bypass coming that will take traffic away from the town centre in the next five to six years, so Levin needs to be really strategic and leverage some of its gems, like Swazi or RJ’s licorice.” He says Levin also needs to find some personality and the “essence” of its town.

The economist: Infometrics’ Patterson says Levin’s economy has been growing at a moderate rate, about in line with the broader New Zealand economy.

WESTPORTThe retailer: Westport has been hit hard by mine closures, but the local council has been very supportive, says Westport retailer and founder of Shop West Coast, Rachelle Hicks. In particular, the council is pushing the Government to fund a 56km road linking Westport

with Nelson via the northern part of the West Coast and the Kahurangi National Park. “This is so important for us in Westport as at the moment we only capture approximately 11 percent of the tourism market on the entire West Coast.” Hicks says the new road would create many opportunities for Westport and the small towns north of it. “I want this positive energy that we have to continue and I want it to be a catalyst to improve business here.”

The expert: The redundancies in Westport are a setback for the town, Wilkinson says, but it has a vision and the retailers there are passionate to make it work, so there are definitely solutions. Its biggest challenges are its remoteness and small population base, he says. “What we would look to achieve in Westport is probably New Zealand’s most customer centric retail community.”

Two retailers NZRetail Magazine spoke to in Westport, Buller, said many people who have lost their jobs have left the area and that’s impacting on foot traffic.

Another recent issue that’s surfaced is the seismic strengthening requirements for older buildings.

Following Christchurch’s devastating earthquakes in 2010 and 2011, the Government amended its policy for earthquake-prone buildings in 2013 and again in 2015.

The amendments ruled that strengthening or demolishing of earthquake-prone buildings needed to be carried out within 15 years in high-risk areas.

Towns such as Gisborne, Blenheim, Napier and Hastings are among the areas considered to be high-risk zones for earthquakes.

But earthquake strengthening is expensive, and Wilkinson says rather than fork out large sums to bring fragile buildings up to scratch, some businesses have simply abandoned them, affecting the look and feel of town centres.

In other towns, building owners have stopped investing, causing dilapidation.

This, combined with flattening or declining populations, is creating a challenging environment for provincial retailers to operate in.

SCRATCHING THE SURFACESome experts believe a common mistake being made in provincial towns is focusing too much on appearance. The look and feel of a town is undoubtedly an important factor when it comes

WhanganuiBy Michal Klajban (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

LevinBy User: Bgabel at wikivoyage shared, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=22686129


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The economist: A sharp downtown in mining in the area has meant the Buller district is facing a recession, Patterson says. However, he says businesses further down the West Coast that have been exposed to tourism have seen an uplift in activity.

KAITAIAThe retailer: Raymond Jujnovich, manager of Jujnovich Gifts and Souvenirs in Kaitaia says the boom in Auckland is largely not impacting on rural New Zealand and the town is suffering because of it. Foot traffic is low, there’s no longer a Vodafone or Spark shop in the town, and the local bus company sold out, so tourists that used to come to the town to catch a bus to Cape Reinga now catch one from the Bay of Islands.

The expert: Wilkinson says smaller places like Kaitaia have had some real challenges, as it’s hard to get the critical mass of people needed to keep the town afloat.

The economist: Patterson says although individual retailers in

Kaitaia may be struggling, across the Far North district as a whole, general economic activity has picked up reasonably strongly. Numbers from Marketview show in the year to December 2015, retail spending was up 3.4 percent from a year earlier.

BLENHEIMThe retailer: Tim Thomas of Thomas’s Department Store says

while the number of vacant shops has increased, Paymark statistics for spending in Marlborough are very encouraging. “The last six months’ trading has been very positive; we’ve really seen an improvement. We’re seeing a lot more tourists coming into the region, domestic and international, off the back of the wine industry getting back on its feet and doing

really well.” He says the last five years have been tough and there have been casualties, especially with independent stores, but the future is looking promising.

The expert: “You’ve got some very proactive retailers who want things to happen but there’s a lethargy amongst a number of them,” Wilkinson says. The Business Improvement District structure the town’s employing may not be able to move as quickly to the changing pace of retail, he says.

The property expert: Bayleys’ Budd says Blenheim is suffering from poor town planning, as a bulk retail park has been built by the airport and on the outskirts of town. As a result, the city centre’s business has been impacted.

The economist: Patterson says the Marlborough district has had some good growth as of late, and people there are very optimistic about their wine sector at the moment. “It’s also benefited form the uplift in international visitors to New Zealand and we’ve seen that come through in the regional tourism indicators.”

to spending - a desolate, abandoned-looking main street can send travellers and potential investors scarpering, while locals travel out of town to spend their dollars.

But Karen Remetis, principal of Waikato-based strategic planning company Town Centre Development Group, says it’s important not to get caught up in the superficial.

Though people might not consciously realise it, the town centre is a reflection of the economic health of the wider area, she says.

What happens often is the focus for improving a small town is the urban design, when really, this won’t have much of an effect on the foot traffic.

“When a town is struggling and people put in new footpaths and beautify it, it’s going to make it look good but not going to fundamentally change how the town is going to thrive,” Remetis says. “Sure, those things are important, but for me they’re not the most important. The most important to me is how are we going to get this economy to work?”

Another commonly-used strategy for tackling high streets suffering from too many unattractive vacant shop fronts is to hold art exhibitions within the empty stores.

First Retail’s Wilkinson is critical of such strategies, calling it “embalming”. “It’s embalming a body rather than resuscitating the patient.”

Remetis says when it comes to a town branding itself, it should be around what’s local, what’s real and what’s important.

WestportBy Prankster - Own work, CC0, https://commons.wikimedia.org/w/index.php?curid=22434820

BlenheimBy CHCBOY (Own work) [CC BY-SA 4.0

(http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

KaitaiaBy Phillip Capper from Wellington, New Zealand [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons


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APRIL / MAY 2016

FEATURE

Provincial retailers share the biggest issues they 're facing

"Gst/offshore buying. Farmers fluctuating income. Competition from bigger stores/nearby cities. Locally the population has a high average age, many rely on super and benefits. Requires careful stock control to ensure it meets local ‘conditions’. Need right attitude in staff to encourage local shopping."

"Not enough income in the local area. Too many beneficiaries and retired people. Online shopping undercutting retailers."

"The Warehouse, Supermarkets, Mitre 10 etc diversifying by selling specialty products."

"Big-box retail, online shopping, staff – sick leave, pay rises etc, business costs. Reducing employment causing population to move away and other retailers diversifying to increase their product range

overlapping with areas I specialise in. A bit is also the loss to the internet and the larger towns, this has always happened and will continue. We have retained the customers that require the service and backup."

"The large numbers of families the are leaving our town of Westport with the downturn in mining and the closure of Holcim Cement in June. Even worse than that families are splitting up as the husband goes away to work and mum and kids stay behind in the house that has too big a mortgage to leave and with a lot of properties for sale and rent they have no option. This means foot traffic on the street is halved and times are so stressed there is no money to spare anyway. The centralisation of government departments and large companies takes a lot away from provincial towns. Provincial retailers become

more isolated from the vibe of cities, this could be an advantage if we make it one as small, independent stores have culture and vibe of their own which could be promoted more."

"Towns that are within two hours drive from a larger town/city have to actively promote themselves to capture the local shoppers without them jumping in their cars and going to the city to do their shopping. There can also be a feeling of isolation for retailers in smaller towns and this can have a big effect on the message they put across in their business.

"It can be really tough when large chain stores e.g. The Warehouse move into smaller towns as how do the small guys compete with their marketing and low prices? Just not enough people on the street really, sometimes you can do your best marketing and have fabulous product but if there are hardly any people walking past your door there is not much chance of making those much needed sales."

She says often, what the town chooses to focus on marketing-wise doesn’t have any substance underneath.

“It’s no use having a big carrot or a big banana, there’s got to be something that is relevant. Even if it’s the sheer beauty of the town, an original town, that’s what visitors and tourists want.”

STOPPING THE EROSIONThe experts say there is no one-size-fits-all solution, as every town has different strengths and weaknesses to the next.

Instead, they say it’s vital that regional towns and cities have an action plan that’s put together by an outside facilitator who has no qualms about calling it like they see it.

“It’s like saying you’ve got to go to the dentist – basically, it’s got to be done,” Remetis says.

Wilkinson says a retail-specific strategy should be tailored specifically to the town, so all of the factors at play are captured within it.

“Where councils go wrong is when they try to pick off one thing, like parking. That’s the only one part of the equation.”

He says the key opportunities and risks need to be addressed, then a plan needs to be made about how to develop resilience and achieve growth.

Towns getting the retail mix right is also important, says Tim Thomas, co-owner of Blenheim-based Thomas’s Department Store.

“We’re seeing new stores that open generally are chain stores. It’s important to get the mix of independents as well as chains. As soon as you get more chain stores, the variety for shoppers starts to wane.”

Wilkinson says some councils might say there’s nothing they can do about the retail mix, but the reality is they can have an input.

“You can’t dictate the mix, but you can be a key influencer in how a town evolves - but it relies on you understanding what consumers want.”

Bayleys’ Budd says in terms of the mix, bulk retail shouldn’t be allowed to be positioned on the outskirts of towns, as this drives foot traffic out of the centre.

“Instead, position these big-box retailers on corners behind the heart of a centre so they can support and feed the heart.

“Some of the best examples of towns doing this well are Cambridge and Kerikeri.”

If a business is really struggling to cope with these changes, Remetis says they should accept they need an exit strategy.

“With the changes of where New Zealand is going, some businesses do need to say, ‘We have done well for 20 years but we accept the town and the economy is changing now and we need to look at doing something else.’”

ADAPTING TO CHANGEWider town solutions aside, there are several ways provincial retailers can encourage more foot traffic to their stores.

Thomas says his store has survived 103 years in retail because it has adapted to change.

“Sometimes what can happen with retail stores in the regions is they don’t change their product offerings and they don’t look at adding new things to the business, which is something we’ve always done.”

In November, it opened a in-store café to make itself more of a destination for shoppers.

“What it’s done is helped to draw people into the store and is another means to engaging with customers,” Thomas says. “You might come into a clothing store once a season to buy a shirt, but you’ll come in every day to buy a coffee.”

Another way to draw customers back into the store is through a customer loyalty programme.

It’s no use having a big carrot or a big banana,

there’s got to be something that is relevant.

Even if it’s the sheer beauty of the town, an

original town, that’s what visitors and tourists want.

Karen Remetis


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Chanelle Purser, owner of Gore-based clothing store Carvin Streetwear, says when she noticed customers weren’t shopping locally as often, she created a programme that offered customers great perks for spending their dollars with her store.

The programme also created a channel for her to connect with customers on, where she could ask “Is this what you’re after?”

It worked, and Purser stays customer-focused and constantly asks for feedback on stock.

It also helps to pay attention to the economic climate of the town, she says, which is something customers may not be so open about.

When things became tougher locally because of the dairy payouts, Purser began looking for clothing labels at different price points and found a mid-range that would suit people’s pockets better.

Another way to engage customers is when retailers run an event or campaign that emphasises why their stores are unique and worth shopping at.

Melissa Williams, founder of Kilt clothing, says her label started a month-long event called New Zealand Made March to encourage people to shop locally.

The month encourages people to shop with both Kilt and with other New Zealand made brands.

“We have seen people really get on board with it and get excited about it. If you’ve got the option of China made and New Zealand made and they’re a similar price, most people would pick locally made. It’s keeping people in jobs, and there are a lot of feel good factors about it,” Williams says.

HastingsBy JSvideos.

UNITED WE STAND, DIVIDED WE FALLWhile there’s no silver bullet for the problems facing provincial retailers, a common thread connecting the successful shops is putting an emphasis on community. Small towns will never pull the same crowds as the likes of Wellington, Auckland and Christchurch, but this can be seen as a strength, not a weakness.

The smaller customer base means provincial retailers can get to know the intimate communities they operate within and provide better personali-sation than their urban city counterparts.

Owner of Hasting-based the Little Red Bookshop, Siobhan McCormack, says the less frantic pace of the regions allows retailers to familiarise themselves with their customers more.

“Here in the provinces we have a slower pace and more time, it allows us to interact with our customers, to chat, to get to know them. Locals and visitors alike appreciate that, and they will return, and they do recommend us to others.”

Carvin Streetwear’s Purser says getting out and being a part of the community is the best advertising you can do for your store.

“I think being visibly part of the community helps, especially in rural communities, as people really like seeing that you’re helping their causes, sponsoring things or donating your time.”

This sense of community can be taken to the next level through creating an organisation for retailers in the town to promote themselves to locals. One example of this is Shop West Coast, an initiative on the South Island’s upper West Coast, set up to promote businesses in the area and shopping locally.

Shop West Coast sells loyalty rewards cards to shoppers, who get discounts with member retailers.

Westport retailer Rachelle Hicks, who founded Shop West Coast, says customers love the idea, with over 1000 cards sold so far.

Fostering a sense of community is key to retail surviving in the provinces, she says.

“People who live in small towns enjoy a feeling of belonging. The love the fact that they know shop staff by name and we know and remember them.”

Rather than competing against one another, she says collaboration between retailers is essential for success.


Mapping the money

Auckland is undoubtedly New Zealand’s centre of commerce, but outside the super city, retail sales are more evenly distributed. Here’s New Zealand’s actual retail sales values shown by geographic location, in billions.

TOTAL SOUTH ISLAND

2012 17.42013 18.1

2014 192015 19.7

TOTAL NEW ZEALAND

2012 70.12013 72.8

2014 75.62015 76.3

TOTAL NORTH ISLAND

2012 52.72013 54.7

2014 56.62015 56.6

REST OF SOUTH ISLAND

2012 7.92013 8.1

2014 8.32015 8.3

REST OF NORTH ISLAND

2012 14.22013 14.8

2014 152015 12.3

RAW FIGURES SOURCED FROM STATISTICS NZ. NUMBERS ARE APPROXIMATE.

AUCKLAND

2012 23.82013 25

2014 26.72015 28.8

WAIKATO

2012 7.22013 7.3

2014 7.32015 7.7

WELLINGTON

2012 7.52013 7.6

2014 7.62015 7.8

CANTERBURY

2012 9.52013 10

2014 10.72015 11.4

FEATURE22

APRIL / MAY 2016


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The tourist trap

There may also be an untapped opportunity for smaller towns to bring in some business through domestic and international tourism.

While the dairy industry has waned in the last year, tourism has been hailed by economists as a “bright spot” in the economy.

Tourism unofficially overtook dairy as the number one export earner in New Zealand in 2015, raking in $30 billion a year.

Tourism Industry Association New Zealand (TIA) chief executive Chris Roberts says retail sales play a big part in this figure, with retail spending making up over 40 percent of the $18 billion domestic tourist spend and almost 30 percent of the $12 billion international visitor spend.

As part of its plan to reach a revenue of $41 billion in 2025, the TIA is looking at ways to encourage more “regional dispersal” for travellers.

Roberts says they want to encourage both domestic and international visitors off the beaten track onto lesser known tourism routes, such as provincial towns, because it will help the country cater for more visitors.

“We will have problems going forward if we have visitors go to just a handful of locations and coming at the same time of year.”

He says towns looking to attract more tourists need to be very clear about their proposition to visitors.

“That may be their natural attractions, it may be their man-made attractions, it may be (and frequently is) an event that is on at a particular time – events are a very big driver of domestic tourism. It can be the retail offering. That’s an area that’s underrepresented in New Zealand – the opportunity for people to travel for a retail experience.”

He recommends that businesses should talk to their local regional tourism organisations to understand who they should promote the region to, as well as what feedback there’s been about services missing in the local market.

“It comes down to simple things like visitors saying they couldn’t get a local restaurant serving meals past eight o’clock.”

However, if tourism is going to grow in a town, areas like infrastructure need to be addressed to accommodate more people, he says.

This includes roads in and out of the town, waste systems and public toilets.

He says a national conversation has begun about what assistance and funding can be provided to places that have a small number of local residents, but high visitor rates.

Overall, he says visitors should be on the minds of retailers, as they make up a big part of their customer base.

“Every retailer should at least be aware that their customers can just as easily be from out of town as they are from down the road.”

“When small businesses stand together, talk to each other and work alongside each other it makes them stronger and gives them a more effective presence.”

The benefits of building a retail community include not only creating strength in numbers, but raising group morale.

First Retail’s Wilkinson says it’s important provincial retailers find and share camaraderie with other business owners.

“At the moment, many store owners feel like the sky’s falling in or it’s groundhog day. But when you’ve got businesses working together or participating in mentorship programmes, where experienced retailers or property owners provide free advice and support, town centres truly come together.”

Perhaps most importantly of all, the social impact of struggling retailers in provincial towns is bigger than the retail industry itself.

No town centre means communities can break down and lose their “heart”, with people no longer having a central hub to interact within.

Retailers shouldn’t shoulder the sole responsibility for this, but they can make their significance to the town well known to local shoppers and town stakeholders.

With this in mind, Remetis says each town and its retailers must figure out how to fight back.

“I know how hard it is, but they must get political and they must get strong. Organisationally, functionally strong.”

Individual percentages may not sum to 100 due to rounding.Product totals exclude GST.

Tourism spend by product

RETAIL SALES 35%

EDUCATION SERVICES 2%PASSENGER TRANSPORT 28%

ACCOMMODATION, AND FOOD AND BEVERAGE SERVING SERVICES 21%

OTHER TOURISM PRODUCTS AND SERVICES 14%

Source: Statistics New Zealand


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Advice to retailers, from retailers

Be unique, really look after your customers and go an extra mile for them to get what they want. There are many successful retailers in most provincial towns and they will all be unique to their community and provide great service. Treat people as you would like to be treated in a similar store.

Kim PittarOWNER OF MUIRS BOOKSHOP IN GISBORNE

Recognise the problem is not going to go away and seek some advice, soon. It’s only to get more of a challenge. I’ve been a part of retail groups for a long time and have found it really hard work trying to get retailers to work together, but just having that outside input to be the catalyst made all the difference.

Tracy HicksGORE MAYOR AND FORMER RETAILER

Make sure you’ve got a unique point of difference to other stores and then stick to your theme. Don’t try and be that store down the road - be the best at your store. And work harder and work smarter. Keep your marketing plan simple and uncomplicated - if we have something we want our customers to know we tell them immediately using SMS, e.g. “Augustines summer range has just arrived in-store at Fifty Five.” We use www.ezitxt.com. It’s brilliant.

Tracy HawkerOWNER OF FIFTY FIVE AND COUNTRY LANE ORIGINALS IN WHANGANUI

In the end, it’s all about creating and fostering a narrative and a history around your business and your town, something that will resonate with people who like to feel, maybe now more than ever, that they are part of something real and tangible.

Siobhan McCormackOWNER OF THE LITTLE RED BOOKSHOP IN HASTINGS

I think if you’re selling something you’re really passionate about and you offer great service, you’ll do really well. We’re passionate about making women feel great about themselves; that’s what fed through to kilties [kilt-wearers] in our boutiques.

Melissa WilliamsKILT FOUNDER

Steps for those that are struggling

1 Find strength in numbers. Band together with other retailers and businesses in the area to create a community where you can share advice and ideas.

2 Create a platform that you can engage with customers on and get feedback on what’s working and what’s not, be it your store’s social media page, a loyalty programme, or an in-store feedback form.

3 See if there’s a retailer, retired or active, who’d be willing to be a mentor.

4 Contact a retail consultancy and ask for advice.

5 Talk to the local council about what options there are; take examples of other New Zealand towns in hand to show there are solutions out there. See our case study on Gore below.

GORE: THE LITTLE TOWN THAT COULDAround 13,000 people live in the town of Gore, nestled right at the at the bottom of the South Island. Famous for its trout fish monument, the town has long serviced the needs of the surrounding rural district and has traditionally had a strong CBD.

However, around two years ago, some troubling signs started appearing. For one, courier vans were doubling in size to accommodate all of the online shopping parcels.

Another warning sign was when Postie+ decided to shut up shop, as did a few other retailers.

Gore Mayor Tracy Hicks says the state of the town centre wasn’t dire by any stretch of the imagination, but it was enough to be a catalyst for change.

“I didn’t want to take the risk of waiting and seeing what would happen. I thought, ‘we need to be doing something here.’”

Hicks’ family has a background in retail, while Hicks himself used to be a manager at The Warehouse.

He says the knowledge he’d gleaned in retail probably made him more aware of the risk of inaction than others.

“Particularly in rural communities, councils have been focused on the traditional basics of operation – very infrastructure focused. Now with trends going the way they’re going, we’ve got to shift and become much more connected to how the community is shaping and we’ve got a role as council in that place-shaping arena.”

Hicks approached retail consultancy First Retail Group and the company put together a proposal to the council.

The council went for it, so First Retail put together an action plan to re-engage the community. Managing director Chris Wilkinson says they realised for many consumers, the town’s retail centre had lost its relevance. They were instead choosing to shop outside of Gore, either online or out of town.


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First Retail developed the GoRetail initiative, which included solutions retailers could quickly run with, as well as some medium and longer-term objectives.

One of the quick strategies was helping retailers realign their shop hours with consumer expectations, as Wilkinson says people’s lifestyles had changed and the hours weren’t mirroring it.

The next step was to spread the word and get the community back on board with shopping locally.

Wilkinson says they went back to consumers through the media and were very humble about it.

“We took on the message of, ‘We’ve been listening to what you said, we’ve made the changes you’ve asked for and we respectfully want your business back again. We want you to make Gore your first choice when it comes to shopping and we’re going to prove that we can deliver’.”

Retailers and the council decided shops were best left closed on Sundays to make the day about sports, families and friends, except in the lead up to Christmas.

Meanwhile, ecommerce company Storbie built an online marketplace, so local retailers could list their products and consumers were able shop locally 24/7, preventing further drift.

Both Hicks and Wilkinson say the community response to GoRetail has been great, with a big uplift in foot traffic and the spirits of business owners.

By most reports, Gore also had a good Christmas in terms of sales.

“We all had a great Christmas compared to what it could’ve been,” Carvin Streetwear owner Chanelle Purser says.

“If we hadn’t been proactive and had GoRetail, I think our Christmas would’ve been really sad.”

Not only have shoppers’ attitudes changed, but so have retailers.

Hicks says the cooperation and team-like mentality between them is unlike anything he’s seen before.

“Traditionally retailers are individual in the way they approach advertising and marketing. Now, there seems to be a major shift to let’s do this as a community of retailers rather than individuals, and that the opposition is not the person next door, but the person on the other side of the world.”

Purser agrees and says there’s more a sense of retailers looking out for one another.

The retail community has meetings about once a month where they share ideas and support one

another, and Purser helps to mentor any business owners that need a hand up.

She says she can’t rave about the GoRetail initiative enough.

“It’s created a really cool buzz about town, even right down to people standing chatting on the street catching up with someone they hadn’t seen in ages. They’d stand chatting on the street for half an hour because usually they would’ve gone to the city and wouldn’t have seen each other.”

“At the end of our day our mayor was the instigator of this and I don’t know if many other rural towns would have a mayor that’s so forward thinking.”

Hicks says there’s a fantastic groups of retailers in Gore who are really keen to develop and grow.

“Retail has changed forever, and we just need to get our heads around what the new dynamic is.”


A Change of Heart - Challenge & Opportunity in Provincial Retail

Retail

Transcript of A Change of Heart - Challenge & Opportunity in Provincial Retail