Urban lifestyle drives retail back to city centres
European retail is not dying, contrary to some reports, but it is evolving to adapt to changing customer demands and a more urban lifestyle, panellists agreed at the Living Retail: Consumer and Retail Trends Driving the Market Investment Briefing, which was held in November at MAPIC 2018.
‘The trend is clear: retail is coming back to the city centre,’ said Jorge Ponce, Director, Broadway Malyan. ‘It reflects a change of lifestyle and the search for a better quality of life, as young people like to live in the centre of town and walk or use public transport instead of driving or commuting.’
As urbanisation takes hold, the winning cities of Europe are the places to invest, said Herman Kok, head of research, Meyer Bergman: ‘We believe in retail but there is a whole constellation of changes happening. We must focus on where growth and volume are, the areas and locations within the big cities where retail is dynamic.’
Mixed-use buildings help this process along, he said: ‘They fit very well with the urban lifestyle , which mingles living, working, socialising, buying and consuming, and it is also in line with where retail is heading, which is experience and convenience. As property owners, having flexible buildings allows us to adapt to market conditions.’
Companies are already adapting to these changes, said Marie Hickey, Director, Commercial Research, Savills: ‘Brands now move into what used to be stores to engage with their customers and offer an experience rather than sell a product.’
What is happening is not a revolution but just a logical evolution of trends that have been around for a long time, she pointed out: ‘There will be fewer stores, but that is nothing new. Fifty years ago in the UK there were twice the number of stores there are now. In Victorian London there were many deliveries a day done by boys on bikes for the convenience of customers.’
Looking at the future, Broadway Malyan has done some research into what retail might look like in 2050, said Ponce: ‘We imagine an immersive internet-based society where technology will allow people to have a lot of free time. The shopping centre will no longer be a building, but a WI-FI area, part of the experience of the city.’
In the here and now, though, even online retailers understand the importance of having a physical presence, as Amazon’s plan to open 3,000 convenience stores shows.
Retail continues to have many dimensions. There are exceptions to the new ‘city centres rule’ mantra: outlets, for example, continue to perform extremely well in Europe.
‘Outlets have been leading the pack but we can never still,’ said Sebastian Sommer, Marketing & Retail Director Europe, NEINVER. ‘We are very picky on brands, we see the outlet not so much as a retail but as a hospitality proposition and we keep investing in refurbishment and in technology.’
Europe is also importing some trends from the US, such as turning shopping centres into leisure destinations that offer entertainment for all the family, with attractions that vary from traditional climbing frames to a high-tech virtual aquarium.
‘We have been creating family destinations for 20 years and we have 20 years of data to back up our choices,’ said Grant Sonju, International Business Development Director, PLAYTIME. ‘We are new to the European market, where there has been underinvestment, but in the last 12 months interest has grown. Having family entertainment benefits everyone, because it increases footfall in the mall.’
Looking beyond Europe, in the Middle East giant shopping centres continue to be successful because they are not just a meeting-place but also provide a refuge from the hot temperatures outside. They are large – 200,000 m2 is normal and Dubai has a 400,000 m2 one – but they are also changing their offer, incorporating more F&B and more leisure activities.
‘The food offering has evolved a lot and we are redesigning one of our food courts to have pop-ups,’ said Shane Eldstrom, CEO, Al Farwaniya Property Developments. ‘Leisure and entertainment are becoming more important. We are building an indoor snow park in Abu Dhabi because people like being transported to a different world.’