OUTLOOK RETAIL: Panic over online makes way for focus on solutions

A large number of trends are converging and reshaping Europe's shopping centre landscape, attendees heard at PropertyEU's Retail Outlook Briefing at Mapic in Cannes in late November.

In the last few years, there was a lot of panic about the growing market share of online sales and the fact that the retail pie was becoming smaller for brick-and-mortar retailers, noted Herman Kok, international research director at Multi Corporation. 'But the panic is stopping and the industry is becoming more solution oriented in terms of the online challenge. Shopping centres are also evolving.’

The European retail market has turned a corner from an economic perspective as well, he added. ‘We now see that the economy is stabilising and that a more balanced recovery is occurring across Europe with more growth opportunities.'

Another favourable trend is that the period of rationalisation among retailers and consolidation of their store networks is now being reversed, Kok said. ‘Classical western European retailers are in expansive mode, even if it is at a modest pace and they are very critical about location. At the end of the day, online traders cannot sell emotion or experience like a shopping centre can.’

Luxury market is growing
In terms of segments, the luxury market is still growing and more shopping centres are incorporating luxury brands into their schemes, noted Andrew Phipps, head of retail research EMEA at CBRE. ‘One of the main trends is that luxury will continue to play a role and that retail will also play a role in hotels, transport hubs, hospitals and destination centres.’

While the luxury fashion segment is performing very well, the market needs to understand where the consumer spend is coming from, Phipps said. ‘A lot of spend is coming from overseas so tourism is playing a big role.’

He pointed to Chinese consumers keen to take advantage of the price differential with luxury goods at home. But pricing is the not the only driver pushing Chinese consumers to buy a handbag in Milan: the issue of authenticity also comes into play, he noted. ‘It’s less of a story for a Chinese buyer if they purchase the goods at home.’

Beyond the luxury segment, quality is also gaining importance for more mundane products like a simple hamburger, Phipps said. ‘Premium burgers are becoming popular as are trendy food streets. In Metrocentre, in the north of England, there’s a store that offers quality sushi.’

Quality of location is key as well, he added. ‘At Westfield’s White City centre in London, people can enjoy outdoor eating amid green walls and green roofs. That gives the location a different feel and at the same time it preserves energy for heating and is environmentally friendly.’

More centres are engaging with online offerings and providing centralised collection points, CBRE’s Phipps said. ‘People still want to go to shops and shopping centre landlords are looking for new ways to bring them in. More and more shopping centres are providing apps that offer rewards like a 10% discount to customers. There’s a lot of cross promotion as the technology becomes more and more sophisticated. And consumers don’t mind giving away their personal details if they get something in return.’