A viewing tour with clients in the Oxford Street area last week made us realise the changing world of retail. Once a hub of activity for retailers, who would fight over position along the street, this area now seems a secondary location full of gift shops and tourist memorabilia. Yes, the chain brands continue to have a presence, but there is a notable difference in the number of major retailers and their locations along the street.
This is mainly led by a huge change in consumer retail behaviour over the past five years. Whilst the standard UK high street is struggling with rising rents and business rates, FashTech and the online market has been going through a period of rapid growth.
The ease of an online transaction is encouraging more people than ever to purchase their clothes and accessories from a website. There is more choice and more competitive pricing than the traditional in-store experience. In addition, the reduction in delivery times and a simple returns procedure makes shopping online easier than it ever has been.
The retailers themselves also see huge benefits and now openly encourage online activity. This provides them with the ability to target their chosen audience much more easily. Personal information such as body size, age and gender as well as less obvious factors such as location, interests (and even the weather) are easily tracked via mobile apps and allow the shopping experience to become much more bespoke to the specific customer.
The development of an online presence has also led to fashion companies increasing their recruitment within the tech sector. Website developers and experts are in high demand throughout the industry. They now make up a significant part of the workforce at most FashTech companies. The large tech teams required to run a top website, on top of the fashion related staff, means larger requirements for offices and also more warehousing space to store their goods. Where retail landlords may be struggling, those who invest in office and warehousing are certainly reaping the benefits of a growth in online sales.
This in itself has led to FashTech companies becoming major players in the commercial property market in the UK. High-end online retailers such as Matchesfashion.com (who we recently moved to The Shard) and Yoox (Net-A-Porter) are testament to the growth of this sector in the property market. In addition, the likes of ASOS continue to grow as demand for their online presence continues.
Another giant in the ecommerce world, Amazon, have also recently moved into a new studio in the fashion district of Shoreditch to launch their new concept ‘Amazon Fashion’. They will join fashion moguls Oasis, Christian Louboutin and River Island who also have their head offices in the area.
The growth in Fashtech has not only been seen in London. In Manchester, companies such Boohoo.com, Pretty Little Thing, Shelikes and Missguided are all based in the North West, creating a core FashTech powerhouse in the North of England.
As the FashTech industry continues to enter into new realms including 3D printed fashion, clothing recognition technology and apps that can measure your body size from a single photograph, it’s hard to predict where the industry will go to next. As companies continue to invent new ways to shop online and improve the services they offer to their clients, we forecast that the FashTech sector will become a major force in the London and wider UK property market. Watch this space.
Take a look at our interactive market rent guide to see how office prices in the Oxford Street area compare with elsewhere in London.
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