34 Companies Reshaping Retail Real Estate
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With all the doom and gloom around in the retail world at the moment, it can be easy to lose sight of the bright spots.
Evolution of retail and the physical space it occupies is happening at hyper speed because of the impact of technology.
Within this maelstrom there are hundreds of people and companies changing the way physical retail works, doing innovative, creative and (importantly) profitable work. From developers and owners to retailers to tech companies, they are shaping the retail experience of the future.
Ahead of Bisnow London’s Retail: An Industry In Flux event, here are a collection of some of the most interesting people and companies working in the sector. We reached out to more than 100 people in the retail sector to gauge ideas, and the 34 people and companies name checked in the 18 entries below are at the bleeding edge of the retail real estate world.
There are some names you know doing things you might not have heard about. There are some big names you won’t see on here, like Amazon, Apple or Samsung, as the aim is to introduce some new faces. And it is far from exhaustive: We’d love to hear about other examples, as this is a topic worth covering again and again as the retail sector navigates a course to the future.
B8ta and Yndica
B8ta is a retailer with a chain of stores that offer retail space-as-a-service. The company showcases products from a fast-changing roster of brands, typically ones that only have an online presence, with a focus on consumer electronics or design-led items. It is similar to pop-up retail platforms like Appear Here and Storefront, but has nine permanent stores across the U.S., and 70 store-within-a store locations.
Yndica is a similar proposition on a smaller scale. It is developing pods that can sit within shopping malls or department stores and be used as a showcase for online-only brands. This allows physical retail owners to give consumers a way of accessing online brands, and an efficient way to keep their assets constantly refreshed. Customers can purchase displayed items instantly on a smartphone.
Brookfield is the big property player that has gone where others fear to tread, making major investments in the tumultuous shopping mall sector while others have hung back. It took U.S. giant GGP private in a $15B deal last year, has formed a strategic partnership to develop space once owned by department store Macy’s and considered a bid for UK shopping centre REIT Intu before pulling back late last year. In that sense it will be at the forefront of trying to revive the kind of common shopping centres that are falling out of favour. A big part of its strategy will be to introduce non-retail uses like leisure and office space as well as civic uses like libraries, to bring people back to centres they have turned away from.
Areli and Alteris
What Brookfield will be doing with large portfolios like GGP will be repeated at smaller malls and town-centre shopping schemes across the U.S. and UK. In the UK, new names like Areli and Alteris are buying town-centre retail that has gone into administration with a view to adding residential, leisure and more local retailers to engage with communities. They are following a path established by pioneers like Ellandi and NewRiver Retail. They will be looking to build up significant portfolios, and with the number of small centres owned by leveraged private equity firms, they will likely get the opportunity.
Polly Barnfield and Maybe*
If you’re going to try to engage with a local community to get them to come to your shopping centre, it helps to know what they think about it. Maybe* is a platform founded by Polly Barnfield that allows asset owners or local authorities to monitor what people are saying about a scheme or local area online, and engage with them directly using digital platforms. It allows retailers and landlords to promote a scheme and get local feedback and input.
Adidas, The Soap Co. and socially conscious retail
As shoppers become more aware of the social and environmental impact of their consumer choices, a new breed of retailers that seeks to do good as well as make a profit is emerging. The Soap Co.’s products are handcrafted in the UK by people who are blind, disabled or otherwise disadvantaged. Moments of Sense and Style is a lifestyle brand born out of personal tragedy and which looks at ways to empower the “purple pound” (a term referring to the spending power of disabled people and their families), use local produce and connect physically disabled creatives. Luxtra is looking to spread the profit of luxury handbags along the supply chain with minimal environmental impact and to maximise use of leather alternatives. Tony’s Chocolate produces an annual fairness report and is striving to change the cocoa production chain. And Adidas produced the UltraBoost trainer made from ocean plastic.
Hammerson’s Louise Ellison
Hammerson Head of Sustainability Louise Ellison is one of the longest-serving and most innovative real estate professionals focusing on sustainability, and has expanded the definition of what the term should mean for a retail property owner. As well as an objective to be net positive in terms of carbon production, meaning the carbon emissions avoided outstrip those produced, Ellison pioneered an initiative for the retail REIT to measure its social impact on the communities where its centres are located.
Globetrotter, Gymshark and the rise of experiential retail
Experiential retail is one of the buzzphrases in any discussion about where the sector is going — if your store or centre is selling goods that can easily be bought elsewhere or online, you’re in trouble.
Examples of experiential retail are becoming ever more common, with tech firms offering product demos to draw in shoppers, and retailers putting on fashion shows. A couple of really innovative examples: At outdoor and adventure sports retailer Globetrotter in Germany, customers can try goods out in conditions as lifelike as it is possible to re-create indoors — think kayaks tested on actual water. And in the UK, gym clothing brand Gymshark has recently opened its own 55K SF gym which will serve as a fitness centre, store and research and development facility.
The world’s second-biggest owner of shopping centres clearly has an incentive to make sure the future of physical retail is bright, and it has been at the forefront of infusing dominant regional malls with experiences that go beyond retail, and this is only set to continue. Its vision for the future of retail outlined last year highlighted shopping malls with urban farms and libraries and a world where consumers hire clothes and products as much as buy them. In the more immediate term, it is using a disused bus garage adjacent to its flagship Westfield London mall to create a 3,000-capacity concert and events venue.
An interesting byproduct of the Unibail-Westfield acquisition was the spinoff of Westfield’s retail innovation lab into a new publicly listed company, OneMarket. The firm has big ambitions. Among other initiatives it is working on technology that will allow retailers and shopping centre owners to share data, giving them the same amount of customer insight as big online platforms like Amazon.
Concrete VC is one of the oldest and biggest venture capital investors and incubators in the world of PropTech, and it is making a push into retail. Concrete does deep analysis into various real estate technology topics for its brain trust group. That group includes partners like Hammerson, Starwood, Nuveen and JLL that have a strong interest in retail, and it is looking to invest in the startups defining the future of this changing sector.
Gyana, DeepNorth Motionloft
Artificial intelligence will have multiple applications that change the way physical retail space is used in future, due to the ability it gives companies to capture and analyse data. One of these applications will be measuring how people use physical retail space and then using that information to inform the design and function of space. Motionloft sensors provide insight into customer shopping habits by analysing path tracking, heat maps and dwell times. Gyana is a space-as-a-service tool that uses big, human mobility data to provide location-based insights for businesses and real assets. DeepNorth is another player in this field.
CBRE is delving into this world of big data and geolocation analytics through its Calibrate platform, which uses the mobile phone signals of more than 15 million Europeans to measure where people live and where they like to shop, allowing CBRE to build up a more accurate analysis of the catchment area and demographic audience of a particular retail location. It can measure who is shopping where and how often, building up a detailed picture of consumer habits, and allowing property owners to adjust their strategy accordingly.
Wynd, Index, Empyr, Pointy and taking the physical online
While companies like B8ta and Yndica give online brands a physical presence, tech companies like Wynd, Index, Empyr and Pointy give brands that have sold from physical locations an online presence, without the need to make huge investments in their digital infrastructure. Pointy automatically uploads physical retailer products onto its website using hardware that integrates with barcodes and point of sale systems. Wynd provides an omnichannel commerce platform for orders, payment, cash management and loyalty, unifying sales for online and offline channels.
Another use of AI will be in the world of visual analytics, such as facial recognition technology that allows retailers to personalise offers to individual customers, although the reality is that this will be done via the equally intrusive but slightly less creepy method of recognising your smartphone. In the visual world, Cortexica created an app for UK shopping centre REIT Hammerson which allows consumers to point their smartphone at any object, be it an item of clothing or an everyday object in a colour they like, and find a store that sells that item or something similar.
Value Retail, the outlet mall developer and investor set up by Scott Malkin and part owned by Hammerson, has blended the worlds of retail and tourism more successfully than perhaps any other property company. More than three-quarters of Chinese tourists to the UK visit its Bicester Village outlet centre, drawn by the bargains, but also the company’s embrace of digital technology in the country: It has a major presence on the Weibo social network and works closely with influencers on this and other networks in Asia and the rest of the world. It appeals to Middle Eastern royals and the masses alike, all of whom love a bargain and the range of brands and restaurants.
Neighborhood Goods and the growth of localism
Department stores are having a tough time, and to a large degree that is because, over time, department stores became identikit, putting off consumers. But department stores can have a future, if they can re-establish the local identity they had when the concept was first born in the 19th century. Neighborhood Goods is a department store company looking to reinvent the sector with a fast-changing roster of goods from local retailers as well as international brands, alongside in-store events and its own editorial division producing online content and a magazine. It has been backed by some prominent venture capital investors, and is planning a second location in New York to supplement its Plano, Texas, debut store. In Europe, Vittorio Radice has revived the fortunes of the La Rinascente chain in Italy by tailoring each store to its particular location, offering local food and products.
The idea of curation is increasingly seen as central to successful modern retail destinations, and as such the retail curator is going to become a thing. At its Coal Drops Yard scheme at King’s Cross Central in London, developer Argent hired magazine editor and music video designer James Bowthorp to curate one of the streets that forms part of the development, picking an ever-changing roster of small independent retailers to take space and make the scheme a bit different.
As important as the curation is the structural shift this forces on developers: Argent and its partners are offering short, flexible and above all cheap leases to brands in order to keep its lineup fresh and interesting. Related is doing something similar with 50K SF of retail space at Hudson Yards.
Time Out Markets and food, glorious food
When people shop, they want to eat. But rather than the same old chain restaurants, people want to eat fresh, (sometimes) healthy, interesting food. So food courts and halls have been revived and moved on from their awful 1980s incarnations, to concepts based around small street food vendors appearing in both shopping centres but increasingly office schemes as well. Time Out markets was one of the pioneers, but Eataly recently took space in the Broadgate office scheme in London, in a building formerly occupied by a bank.
To hear from innovators like Time Out Markets, Brookfield, Unibail, One Market and many more, come to Bisnow London's Retail: An Industry In Flux event on 18 April.