A leg-up for retailers of the future
Published: 30 June, 2011
How is the RMU market evolving to face the future? asks Martin Macwhinnie
When starting a retail business, particularly with limited prior experience in retailing, the first port of call is often an RMU. The RMU format allows a business to trial its operation with a relatively minimal rental commitment in a prime retailing location, taking full advantage of the high footfall generated by a critical mass of well-known retail names. The arrangement also permits a new business to adapt its operation easily– leaving options open to develop while in its infancy without having to fork out for costly refits or changes of stock associated with a full-size retail unit.
I have seen time and again which operators utilise their position to their advantage. RMUs are, by their very nature, dependent on their visual appeal; shoppers stop on the basis of something catching their eye. On RMUs, the opportunity to catch consumer attention is so great because of their pivotal position on the mall itself – they benefit from window shopping without the windows, and this lack of divide gives RMUs an even stronger trading advantage, particularly for impulse purchases for products that retail for £30 or less.
For many start-ups, RMUs provide the first step on the retail ladder, and therefore the key consideration for landlords is that some of these businesses will have plenty more steps to take. A recent example is Define Eyebrows, a beauty retailer based in an on-mall location at Waterside Shopping Centre in Lincoln, Capital & Regional’s latest joint venture acquisition with Karoo.
The business owner, Becky McConnell wanted to expand her offer to provide vibrating fitness machines, so we worked with her to learn about her plan for the business in order to agree a flexible lease arrangement that would allow her to trial a shop unit. She is now trading the Vibe10 business successfully and explains: “[The new team is] very focussed on building relationships and I’m very hopeful that we will have a great future together.”
In this climate of economic uncertainty, where some retailers have struggled to adapt to the ever more demanding consumer, it is imperative the door remains open to the next generation of entrepreneurs with strong retail operations and unique offers. The trick is in keeping things flexible; we attended a business start-up exhibition in the middle of the economic downturn to raise awareness of the opportunity RMUs present and a number of people voiced their concerns about taking time off work to give their retail ambitions a shot. Off the back of this, we revised our offer to allow operators to test the RMUs on a day rate and, in so doing, tapped into a new market of people keen to turn hobbies into businesses.
This is at the heart of the “Retail Factor”, the competition that Capital & Regional runs across The Mall Fund of community shopping centres. The competition seeks entrants from across the country and offers them the chance to trial their retail business dreams on an RMU, regardless of previous experience.
At each of The Mall’s 11 centres, the entrant with the strongest potential is awarded two months free trading, as well as retail training and support to help get their business off the ground. It’s a win-win situation for Capital & Regional, which devised the competition four years ago and has been evaluating and developing it according to the market year-on-year.
Over this period, the competition has allowed increasing numbers of applicants to try their hand at retail and many have stayed on. With localism and community at the heart of the agenda in 2011, the competition this year is even more locally focused and has been well received by both start-up businesses and the wider retail industry.
So what is the future for RMUs? The retail industry as a whole is having something of a shake-up and as a result I would suggest the role of the RMU is as important as ever – to allow new concepts to get off the ground and to filter out the retailers of the future and help them grow. Successful and welcoming shopping environments maintain a balance of space and rental structures for retailers at every stage of evolution; whether that’s a long-standing high street name or a start-up operator. And the challenge for landlords is to continue raising awareness of the RMU opportunity with budding entrepreneurs to maintain a vibrant and varied mix in their malls.
• Martin Macwhinnie is retail operations manager at Capital & Regional
