The future may be different for each person, but in the world of retail there are trends emerging that most, if not all of the market agree upon. Giving the customer an experience is one of the landlord’s and retailer’s main objectives, as is harnessing all the power of the internet. Then there is the crucial food and beverage element, and encouraging dwell time. Noella Pio Kivlehan canvassed the market for their opinions
Lend Lease, the Australian developer behind Bluewater, has carried out its own research, based around shoppers’ habits at the Kent shopping centre. Its research boiled down to 10 key points that in its opinion will shape retail in the UK.
1 Retail
• Shopping is a leisure pursuit;
• which also makes it a social activity;
• consequently, consumers expect to experience something they cannot get online;
• interaction and theatre are key;
• shopping isn’t purely functional. For a large number of consumers around the world, “going shopping” is a leisure activity: a way of relaxing, a source of entertainment or a chance to meet up with friends and share experiences;
• when consumers go shopping in person, they increasingly expect to feel or experience something that they can’t get online: particularly the ability to test and feel things, or learning how to use products.
• Combining products with service and knowledge produces a value-added and memorable experience.
2 Personalisation
• Consumers increasingly want products and processes that are bespoke for them;
• personal shoppers are one example, but brands are going further;
• Personalised services are no longer special, they are expected.
3 Community
• Brands are becoming much more sensitive to their place in their local communities;
• this often leads to links with local charities and good causes.
• But, in a world where every brand is doing “community”, those that do so with real consideration, and who talk about it appropriately, will differentiate themselves.
4 Experience
• Retail destinations cannot create differentiation based on price;
• they must concentrate, therefore, on providing added-value to their consumers;
• delivering a unique, ownable and repeatable experience is vital;
• too often, landlords concentrate on the retail mix and the architecture, with the experience left to chance, or regarded as customer service;
• consumers have greater and better choice than ever before.
• Retail destinations need to think and behave like theme parks.
5 Reduce ‘either/or’ choices
• Consumers increasingly have less time and money;
• consequently, they have become more discerning and discretionary about how and where they spend both;
• at the same time, shopping has become a leisure pursuit, so retail environments compete with a much wider range of alternatives than ever before;
• vital to provide an offer, environment and experience that goes far beyond places to shop, eat and watch a movie.
• Need to create destinations that are an integral part of consumers’ lives, and cater for a wide range of rational and emotional needs.
6 Streamlining
• Consumers have less time than ever before;
• consequently, they want instant, or near-instant, information and gratification;
• consumers expect brands to anticipate and resolve “hassles” without having to point them out or complain;
• consumers are becoming more impatient and have less time. They will demand easily digestible information and reduced waiting time.
• Consumers expect brands to anticipate and resolve their “hassles” without having to complain.
7 Screen culture
• A total of 92% of adults in the UK have a mobile telephone, and there are nearly 82m mobile telephone subscriptions in the UK (source: Ofcom);
• in June 2012, the number of texts sent exceeded the number of calls made for the first time in the UK;
• mobile devices provide instant access to product information and offers;
• increasingly becoming an integrated element of the experience;
• consumers want to access and control the type and nature of information, but also want that information to be instantly and readily available;
• screens and mobile/in-store online access provides information on products, extra offers etc but also enable us to see if we can get a better deal elsewhere.
• We want to access and control the level and detail of information about products and services so that we as consumers can make informed choices.
8 Lipstick leisure
• Everyone loves a bargain, but it is not all about price;
• consumers also want to feel that they are special or privileged;
• in the current economic climate, there has been a rise in affordable indulgences:
• Lipstick Index is the theory that sales of lipstick go up in a recession as bigger cosmetic and fashion purchases go down;
• consumers want advice and guidance, from experts or celebrities, on what looks good and represents the best value.
• Value is part of being a smart shopper, but it must still feel personal.
9 Social pricing
• There is a growing movement towards consumers driving pricing (for example Groupon);
• social media plays a central role;
• such activity creates engagement, loyalty and advocacy.
• Brands that interact and reward, both financially and in terms of socialisation and self-satisfaction, will thrive.
10 Anyone can be an advocate. Or a critic
• Social networking has created a culture of broadcasting experiences, often in near-real time;
• this has many implications:
• the banal can easily become the buzz:
• brands have nowhere to hide
• brands become truly democratic, as everyone has the potential to become an advocate or an influencer;
• any brand that has mass appeal, such as a retail destination, needs to engage.
• But, they need to do so in the language of the consumer, not the landlord, and they must be honest, open and relevant.
Trends
• Internet
Steven Lowy, joint CEO, Westfield
I think you have to both fear and be excited about the internet because …it is growing strongly. It is another distribution channel for goods and services to reach the consumer and in many cases it’s more efficient. But in other cases it’s not as exciting because it is one thing to be looking at your screen or on your mobile phone, but it is another thing to be physically in a shop or to be physically in a mall and be universally wowed by all your senses.
Human beings crave human experiences so we mix the internet experience with human interaction. We see this as really critical. So we are embracing the internet enormously. For instance with the Olympics where the best part of 10m people will have been able to walk through our mall, they will have had free Wi Fi – they will be able to get many messages from us about the Olympics, about our mall.
Helen Bunch, MD, Wates Retail
The steady rise in the integration of digital platforms and technology into stores will continue, perhaps with in-store sensors picking up when a customer enters a shop via a smartphone app, and alerting them to the latest offers based on their previous purchasing history.
The number of retailers offering in-store “pick-up points” to fulfil online orders is also increasing, as is the number of out-of-store fulfilment centres which give customers the option of collecting their purchases at a time and location convenient to them. We could also see “virtual stores” appearing on busy railway stations, where commuters scan the QR codes or barcodes of the items they want to buy on their way through, then pick them up on their return journey.
• Experience
Ed Cooke, policy and public affairs director, BCSC
The big message seems to be that shoppers seek an experience from shopping centres, that differentiates bricks and mortar shopping from online retailing.
Rob Williams, head of shopping centre development at
Strutt & Parker
Shoppers are increasingly looking for somewhere to spend the day as shopping centres become synonymous with leisure destinations. Shopping will become more about the overall experience so the leisure offering in both town centres and shopping centres will become enhanced.
Andrew Smith, head of retail portfolio management, British Land
Consumers are looking for different shopping experiences and want choice. Creating the right environment is crucial to delivering what shoppers want. Landlords need to proactively manage retail environments to improve them through overseeing the tenant mix, coordinating marketing and better communicating with the consumer, supporting independent retailers, occupying vacant units, ensuring a secure environment, investing in local relationships and being open to flexible lease terms.
• Quality
Phil Cottingham, head of retail, Quintain.
Fashion magazine Drapers recently polled 2,000 consumers on what they want and don’t want when shopping. Across the sample, product “quality” and “price” were identified as the most important factors when deciding where to shop, closely followed by “value”.
This seems to neatly encapsulate the offer at outlet centres, where the usp is broadly “affordable luxury”. Over the past 10 years the outlet centre market has grown significantly – there are now 200 centres operating across Europe, with a further 50 in various stages of development. Meanwhile due to continued economic uncertainty there has been a slowdown in traditional shopping centre development. In harder times consumers are value-conscious and gravitate towards brands that they trust. Outlet centres are well-placed to deliver this.
• Generation-Y
Allan Lockhart, property director, NewRiver Retail
One key strategy is to focus on Generation-Y who consume at all levels but are mostly looking for convenient value as they walk into a high street store, “checking-in” on Four Square while listening to music streamed from Spotify tweeting about the item they just bought from their smartphone before buying over-the-counter all at once.
• Food & Beverage
Theo Fordham, head of catering and leisure, Lunson Mitchenall
Ten years ago, catering made up 1-2% of a centre’s income. This figure is now 5-10%and rising as a comprehensive offering helps to increase dwell time and create an evening economy. This trend will also help to combat the effects of multi-channel retailing as they offer the consumer an experience they cannot get from shopping online.
More customers demand one place where all their leisure needs can be satisfied, and despite the tough economic outlook food consumed outside of the home now accounts for over 35% of total food spend. The demands posed by the increasingly sophisticated consumers will see this trend develop further with the leisure sector becoming incredibly advanced with a huge range of offers and diverse food outlets.
The future of retail isn’t so foreign
• By Jack UldrichMOBILE SHOPPING: In 2011, Tesco installed virtual displays on the walls of subway stations in Seoul, South Korea, to allow time-strapped consumers the opportunity to use their smartphones to select items from a “virtual grocery aisle”. Those items were then delivered to their home by the time they arrived back home from work in the evening.
SOCIAL SHOPPING: In India, Aaramshop is allowing consumers to use Facebook to shop for household items. The site, which partners with hundreds of local neighbourhood shops and provides them a free online presence, then uses these small shops to deliver the goods. The consumer is saved the hassle of travelling to a store and the local shops generate new business by connecting with customers in their vicinity.
FACIAL-RECOGNITION TECHNOLOGY: Unilever is now using facial-recognition technology not to target digital advertisements at customers – an application that is certainly coming – but instead with focus groups to discern whether people actually like a new product. Often, the testers will claim they like the product but their facial reaction suggests a different story.
FROM OUTSOURCING TO CROWDSOURCING: It should be no secret that innovative ideas do not reside solely within the walls of corporations – consumers are also likely to have some good ideas. UnserAller, a German company, is now aiming to bring companies and consumers together for the creation of better products. In short, the company is “crowd-sourcing” innovation.
HOME DELIVERY: Not a new idea, but it is for companies like KFC and McDonald’s. Many major urban centres in China, India and Africa are now getting so crowded that it is difficult for consumers to get around. By utilising a team of couriers with access to real-time traffic and road conditions, KFC and McDonald’s have found they can make home deliveries more efficiently than the consumer can get to their retail establishments.
• Source: retail and consumer futurist Jack Uldrich
