EuropaProperty’s latest online panel focused on the current situation in today’s retail market. On the mega-line up, panellists discussed how digital technology can help retailer business models adopt omnichannel retailing and e-commerce as well as how physical retail design needs to get more involved in creating a more technology-based environment.
“We have helped hundreds of retailers, brands and shopping centres accelerate growth through digital,” commented Bernadine Wu, Founder and CEO of Fit for Commerce, a boutique consultancy. “We are in the business of growth. We like to think of ourselves as digital accelerators. A lot of our clients are telling us that they wish they had doubled-down on digital, or are glad they did double-down on retail given the times of the coronavirus, social distancing, and the increase in contactless buying. Right now, many retailers are telling us that now more than ever it is important for them to keep in contact with their retail base in these challenging times. I believe that in our industry we will not have a post COVID era, we will morph into a new normal.”
All the panellist agreed that a major rethinking is happening in the retail industry. “We need to start all over,” said Gary Burrows, the MD of Malls & Meeting Places. “We need to rethink our priorities and parameters and reinvent ourselves. We have to think about every integration we might have with our customers, and I guarantee there is some sort of technology available which may enable that.”
This increased interest for digital technology is nothing new but the COVID situation is speeding it all up. “There has been a reasonably slow decline in brick and mortar retail over the last 12 months because of the emergence of online retailing and e-commerce,” commented James Turner from Sierra Balmain. “The question is what is coming around the corner? Well, the future is here now. There is a lot of pressure on everyone. How can we adjust to this new normal?”
This ‘new normal’ is affecting everyone and everything from tenants to landlords, shopping behaviours, and food delivery, for example. But how are these traditional models changing? Who are going to be the winners and losers? “Everyone is scrambling to get their e-commerce business going,” said Burrows. “Primark is potentially looking at EUR 1 billion in lost income. I think there will be changes to the leasing models as online grows in importance for people and businesses.”
James Turner added, “How do we rebuild? To what degree do we need to repurpose some of these premises? Do we need to be looking at what the possible future will be? All commercial properties we will need to revaluate their businesses moving forward? For example, cinemas may be repurposing. What is the long-term future for leisure? Maybe bring back drive-in cinemas. How do we keep brands alive?”
Gary Burrows, said, “We are working hard to merge the physical and digital worlds of retail to accelerate growth by incorporating A.I. and other visually stimulating and customer engaging technologies.”
Wolfgang Molnar, Erste Group Bank, said, “It will take some time to get back to normal. We should try to avoid a second-lockdown. Finding a balance between health and economy will be a challenge. Since restrictions were lifted people are becoming much more optimistic. We need to help our customers, and reassure them that shopping is safe to return to.”
On what is the possible solution for driving traffic to the malls, Bernadine Wu explained, “Hopefully no one as lost touch with their customers during the lockdown. These re-openings are a chance to add back the physical engagements. We are always speaking with our customers on all channels – the omnichannel way. Anyone who hasn’t been engaging with their customers is probably a little bit behind. There is a need to be transparent and authentic in communication channels. Go back to basics so you can understand your customers more. Keep communication lines open.”
Gary Burrows, added, “A big problem is a lack of communication. For example, stores may say they are open on the website but in fact, they are closed or the opening times are incorrect. Which creates a certain amount of frustration. The greater the communication the greater the clarity.”
Karolis Aldis from W.P. Carey, added, “Certain markets for certain players are definitely in demand. People are being creative and innovative with their businesses, and they remain smart. Things are working out well for them. COVID-19 has pushed online sales up.”
On the investment side, Jason Drennan from Caelum Development, said, “We are still looking at the market from an investment perspective. We are on the hunt for assets. However, pre-corona the land prices were attractive, but now the values are falling, no one knows the outcome. We are very cautious at the moment, it’s very early days. One of the big question marks is will people feel like spending when they come back from lockdown?”
The panellists concluded with the following observations and agreed that significant developments in customer/retailer interactions are needed. However, there will be winners and losers. Innovations have quickened as a result of the pandemic, and it is going to evolve even more. At present, there is a huge amount of change going on. There is, and will need to be, increased collaboration with the retailer and landlord, where the landlord is helping the retailer develop their online capabilities. What is vitally important for retailers and mall owners is the creation of a personal experience for their customers and clients. There will be more e-commerce for sure.