Christophe Cuvillier, group CEO of Unibail-Rodamco-Westfield, has said tenants need to share more information with shopping centres to succeed in a tough market.
In his opening keynote at Mapic 2018, held at the Palais des Festivals in Cannes, Cuvillier outlined his views on how shopping centres need to adapt as customer expectations shift, and called for an industry-wide change in mindset to encourage customer spending and loyalty.
Retailers need to share data
Cuvillier said: “Life is tough for retailers and it is tough for us. Business is changing so quickly – it is about sharing information, sharing business models and attracting more customers to more retailers.
“We need to collaborate much more with retailers and not just have negotiations about square metres every five or 10 years, but to see how we can grow [our] businesses together in between negotiations.”
He highlighted that the one crucial piece of information missing for shopping centre owners continues to be the transaction between retailers and customers, which some brands do not communicate.
Cuvillier warned that this is “a big mistake”. He said: “I feel sorry when some retailers do not give us their sales figures. A couple of retailers, which are among the best, do not share them.
“We are really pushing our shopping centre managers and leasing teams to talk about the figures and about business. If you don’t have the information, you can’t improve or fix the business.”
He cited research conducted by URW on European customers – which found that shoppers visit three or four stores per trip – and asked retailers to consider the effect of working together to secure just one more store visit per customer.
“If we can manage to get one more store visit, or one more store purchase with every visit, both us and the retailers [could] be very rich,” Cuvillier said.
“We could [consider how to] increase footfall, but it is far easier to benefit from existing footfall and turn it into a more productive visit by having the right offer and the right retailers – and by everyone doing their jobs.”
Learning from outlets
Inspiration can be gained from outlet villages, which Cuvillier noted are outpacing shopping centre managers when it comes to fostering relationships between landlords and retailers. For him, there is “no other way forward” than to improve collaboration with retailers.
“We share footfall information but not to the level that outlets do. I must say I am very impressed with the way outlets do it – it is certainly an inspiration for normal shopping-centre operators,” he said.
“Outlet centres are ahead of us in terms of co-operation with retailers – they actually turn themselves into retail operators. We still have a long way to go.”
Clicks-and-mortar is the future
Collaboration has become paramount in a sector where the lines between physical and digital retailing are blurring, according to Cuvillier.
He said: “Clicks-and-mortar is the real future of retail, and the only way to be profitable – you could ask Amazon – is to have stores, and to build upon the strengths of the stores to generate more sales on the internet. What customers want is a clicks-and-mortar solution.”
This does not mean the end of the line for physical stores, which continue to drive online sales. Cuvillier pointed to a recent study by Revo, which found that businesses generated a 12% increase in online sales when opening a shop in a catchment area.
He also referenced findings by ICSC, which showed that online traffic rose by 37% when a physical store opened.
“This is very significant. You have to consider the halo effect,” he said. “In the best locations, physical stores drive internet sales.”
Cinemas prevail
URW has additionally placed its faith in its leisure and food and beverage offers to drive footfall and spending, which it intends to increase at some of its centres.
Crucially, cinemas continue to play an important part in driving customer spending.
“[F&B offerings] have to go hand in hand with leisure, and cinemas are the best leisure activity for any shopping centre,” he said, adding that a cinema can generate 10-15% of shopping centre traffic. “We are increasing space for others, but cinemas are the key.”
For Cuvillier, more leisure and food and beverage goes hand-in-hand with both increased connectivity in retail and the importance of keeping the tenant mix fresh for its shopping centres to maintain their relevance.
He said: “Let’s face it, retail is difficult at the moment. It is a question of putting in place everything [that is] needed for customers to come to shopping centres regularly.”
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
