Retail, Coffee and Work


Last year the METISfiles reported on the demise of retail shops in city centers. With consumer e-commerce  growth reaching 17% in 2016, and total consumer commerce growing 1.7%  traditional commerce is up the creeks. It is not that 1.7% growth in consumer commerce is low, on the contrary, it is a healthy number compared to the 2009 – 2014 period when negative growth was normal. It is just that the tenfold growth of consumer e-commerce points out that the traditional retail business model is past its sell-by date


In our previous retail blogs we also alluded to the changing role of city center and high street outlets: from transaction centers to influencer spaces. The big question is whether this new influencer role will pay off for retail. A high street or city center location (still) comes at a premium square meter price. No doubt more loyalty programs, customer tracking and IoT technologies will be developed to get a grip on actual conversion rates to justify the cost of expansive influencer space. Some stores will not go down that road and leave the city centers. But those same centers are still too good to pass on and as consumer spending is growing, hospitality, leisure and entertainment activities are filling up the empty city center and high street spots. Research by Locatus seems to support this trend claiming that coffee shops, lunchrooms and restaurants replace former stores. Less shops and more hospitality outlets not only underlines growing consumer spending but also a consumer behavioral change. Driven by Millennials coffee, breakfast, lunch and dinner are increasingly consumed outside the traditional work or home environment.


It is not that the new generation of workers drink more coffee, they just don’t empty their mugs at their desk, if they have one, or in hallways. Instead they go out, order an Americano and start tapping away on their laptop or vigorously swipe their mobile or talk with coworkers or business relations. While traditional stores need to rethink their reason for existence and offset their high city center rents the same goes for office based companies. As digital transformation creates  more information based work they need to evaluate their real estate costs. Flexible work places and flex offices can be a solution but not without side effects and not for every work type.

It is too early to tell whether labor productivity will keep up with the emerging digital worker who effortlessly seems to blur work and play along their own time-space continuum. In the mean time the hospitality sector should capitalize on the current opportunities and become a preferred workplace for the information worker.