By Seb Hill, global marketing director at tcc global

It’s no secret that there are struggles on the high-street. Flick to the business pages on any given day and you’re likely to see similar tales of woe involving store closures, job losses and well-known retail brands in severe trouble. In recent weeks alone, we’ve seen M&S announce the closure of 100 stores and Homebase sold for a solitary pound.

At the same time, we’re seeing a rising trend of supermarkets assimilating or partnering with businesses that have entirely different modus operandi. Sainsbury’s and Argos, for instance. It’s an ever increasingly used tactic, but what’s in it for retailers?

A question of space

 Thanks to a stifling combination of increasing online sales and ever-rocketing rents, it has become difficult for retailers to squeeze value from bricks-and-mortar on their own. M&S CEO Steve Rowe has even put the high rate of company voluntary agreements in the sector down to unfair rents.

Partnering presents an efficient solution to these problems. Retailers can use tenant businesses to soak up excess space – that would otherwise be unproductive – give shoppers more reasons to visit and contributing financially to the host store. Meanwhile, the incoming partner can make use of a ready-made premises, often with high footfall.

Piggybacking onto credibility

 Gradually, the days of retailers trying to be “all things to all people” are coming to an end. The closure of Tesco Direct, the chain’s non-food website, is the most recent indicator. It faced a challenge of perception. Tesco is known and loved as a supermarket, so why would customers turn to it for their garden furniture?

Buyouts or partnerships can provide an answer to retailers wanting to explore new fields. Sainsbury’s acquisition of Argos, for example, has given it enhanced credibility and scale in non-food categories, with the ability to order and collect Argos products in a Sainsbury’s store increasing the likelihood of shoppers purchasing both food and non-food items.

 More reasons to visit means more reasons to be loyal

 A fundamental advantage of instore partnerships is that it gives consumers more reasons to visit. They offer shoppers deeper ranges of specialist products – such as in the case of Tesco and Currys – and provide opportunities for genuine customer care—fostering emotional ties.

Some partnerships literally care for the customer—M&S is trailing instore opticians, and Waitrose will provide health checks by Bupa in 17 of its stores. Both are offering reasons to visit beyond a price advantage. This is vital; tcc global’s 2018 global loyalty report has shown that seven in ten shoppers globally want to be rewarded for their loyalty by “more than just another loyalty card”.

Utilising space, contributing financially and gaining credibility are clearly all important reasons for collaboration. Yet perhaps most important of all – especially in ongoing times of retail volatility – is how collaboration brings businesses together to foster new, inventive and emotionally resonant kinds of retail experiences.

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