15 November 2019
How can old-style shopping centres stay relevant?
The retail market is ever-changing and evolving but the construction of a new-build shopping centre is a rare occurrence; available land, the right investment, and a challenging retail market all contribute to make it an unlikely phenomenon.
This puts the onus on existing schemes to make themselves appealing in a contemporary market if they want to keep shoppers visiting rather than spending online. How can outdated retail destinations stay relevant, or become relevant again, in such a fluid and forward-thinking market?
Brand identity is pivotal and should be expressed in every element of the scheme. Clarity around values and objectives should be a priority. What does the scheme represent and what does it want to be for its shoppers? Visitors should be able to identify with a destination’s brand and find common ground that makes it appealing and creates a sense of belonging. This isn’t about the facilities specifically, but more about trying to build a sense of community.
Customer experience is, and must be, at the heart of any retail destination. The term is typically over-used and under-delivered but sometimes it’s the simple things that make a huge difference. Centre management needs to keep some key factors top of mind: a family perspective and, again, a sense of community. Brand values should focus on this so that your desired audience is your focal point and everything you put into place comes together to build the desire to visit. In our digital world, where often speed and convenience trump entertainment or fun, the onsite experience has to be something special to avoid losing shoppers to e-commerce.
Trust in the brand opens opportunities for increased service levels and increased income potential. For example, an on-site creche would be an attractive feature for parents, but trust would be crucial to success.
Customer experience is rooted in service levels, which take the emphasis right back to the landlord/retailer partnership. As the basis of any retail destination, this needs to be strong, especially in the current climate with CVAs and dictation around rent levels.
Better partnerships lead to a more balanced offering, standardised levels of merchandise and customer service, better retention and better advocacy levels. Transparency and the sharing of content are crucial, ideally, landlords should be sharing plans 6 months ahead, to engage tenants and empower them to provide support. All too often, from a marketing perspective, it is a struggle getting offers and participation from retailers. When the foundations of a reciprocal landlord/tenant relationship are in place it benefits all parties and results in a better experience for customers.
Once this is all in place, the facilities and overarching offer of any shopping centre are, of course, vital for success. When it comes to F&B, quality comes into play if you want to stand out, as most centres feature the same predictable brands. This also applies to leisure; we are seeing new leisure activities acting as significant footfall drivers, rather than the traditional cinema and bowling. From climbing to escape rooms, the modern consumer craves experiences and this style of leisure offering creates appeal.
Taking the idea of a varied offering a stage further on, we are increasingly seeing true ‘mixed-use’ schemes where areas are allocated as flexible working space, student housing, or even a medical centre. This is currently more prevalent in Europe and is a clever approach as it not only provides income when a retailer cannot be found, but it also places your catchment on-site, driving immediate footfall on a daily basis, naturally contributing to an uplift in visitation and spend.
The value of pop-ups is increasingly acknowledged and desired by both landlords and consumers. Whilst the US has driven this retail trend more proactively, and reaped the benefits, pop-ups have historically been more of a back-stop in the UK, but this is changing. Pop-ups might not offer the same level of convenience, but if they are carefully selected to complement and enhance the tenant mix rather than just fill a void, then they can add value and contribute to better customer experience.
Too many established schemes are becoming outdated through a lack of foresight and investment. With vision, capital investment and the right team in place, success can be achieved. A great example of this is The Boulevard in Northern Ireland, following its joint venture acquisition by Tristan Capital and Lotus Property in 2016. BWP Group has worked in partnership with Lotus Property to manage the scheme through a £7 million rebranding and relaunch process, which has since seen an influx of new, quality retailers and delivered a 25% YOY increase in turnover, bucking the retail industry’s recent downward trajectory.
Technology is one of the retail industry’s biggest impactors in recent times and shopping centres have to find a way to embrace the expectations of the next generation of shoppers. Screens showing footage from stores and current offers, and vlogger contributions help to bring the perks of online shopping to the bricks & mortar location, making information immediately available to customers. This in-centre, magazine-style footage is already working successfully in China to drive people into stores and to purchase.
Taking a scheme from zero to maximising its market potential requires a clear vision and a hands-on team to build confidence – there’s no room for prima donnas in this market. Whatever you do to regenerate a scheme it should link to, and deliver on, an agreed business plan with ROI metrics and KPIs. Marketing investment should be measurable through sales, footfall and ultimately asset value to deliver absolutely on an owner’s promises. No scheme is irredeemable, you just need the right team, the vision, and the investment!
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