Brace Yourself, Here Are 5 Big Changes Coming To Retail
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Do not believe the hype: Brick-and-mortar stores are not in any danger of disappearing. Physical stores are becoming one aspect of a shopping experience that requires both online and real-world assets, as we learned at Bisnow’s Future of Retail event on April 27 at The Avenue.
Expert panellists from companies like Westfields, Hammerson, Savills and John Lewis gave us a glimpse of the five trends to look for as retail matures in this new environment.
1. There will be more community involvement in retail.
The changes happening in London due to Crossrail and other community initiatives are a boon for retailers. In January 2017, funding for Alfred Place park was approved. It will be central London’s first new public park in over a century. One-way streets in the area will become two-way, and new cycle lanes will be opened, pavements will be widened and up to 285 new trees will be planted. Tottenham Court Road can expect to see 250,000 new visitors every day come through the new Crossrail station in 2018.
Oxford Street, one of London’s most recognizable shopping streets, will be completely pedestrainized by 2020. All traffic, including busses and taxis, will be banned from the street as part of Sadiq Khan’s plans to tackle air pollution. Cars are already prohibited on most of Oxford Street from 7 a.m. to 7 p.m. every day except Sunday. Since 2005, both Oxford Street and Regent Street have featured pedestrian-only traffic days around Christmas.
With all that increased footfall, pedestrian-friendly locations will be vital for the future of retailing.
There are other ways the community will become more intertwined with retail too. New River director Emma Mackenzie aims to build shopping centres that inspire the community and that can grow with the community.
2. Omnichannel is passé.
The term was universally dismissed by the panellists although they made it clear the future of retail requires a symbiotic offline and online presence. Westfields chief marketing officer Myf Ryan calls it "the customer channel," meaning the mode of interaction does not matter because the media will be shared for a more personalized experience, whether customers are shopping from iPads or in stores.
Hammerson’s UK commercial director Iain Mitchell said the two apps his company have launched have been hugely successful — but they are only one aspect of the company’s strategy that aims to meet customers where they are.
3. The amenities will keep getting better.
Customer experience with a wow factor is increasingly important as customers take to Instagram for inspiration, Facebook to interact with their friends, and Twitter to comment on their experience.
Other practical amenities like click-and-collect are increasingly vital.
Westfields’ Ryan touted the company’s SmartParking, an app that allows shoppers to park without a ticket. Westfields does everything it can to remove pain points for customers, Ryan said. It offers hands-free shopping so customers do not have to lug around heavy bags, a CollectPlus Lounge with spacious changing rooms and even meeting spaces.
At Lush, a cosmetics shop, customers can try making their own bath bomb or face mask, and Lush also offers parties. Paul Wheatley, UK property director, also understands that many men are there for the women in their lives, so he installed music nooks in shops, as well as "places for blokes to hang out."
4. Logistics will play a bigger role in retail.
SEGRO chief information officer Phil Redding said logistics has a part to play in customer loyalty, and it will certainly play a much larger part in retail in the future. Traditionally, merchandise was moved in a single bulk order to one location. The shift to many small orders has been a tough change to accommodate, particularly since customers demand ever-faster delivery. Redding said he expects the supply chain to be served with smaller warehouses in urban areas, close to customers. With the severe shortage of land in city centres, two possible solutions might be tall, multi-storey warehouses, and mixed-use developments with both residential and warehousing.
Other panelists agreed that a robust and smooth supply chain will be vital and could solve one of retailers’ biggest headaches: returns.
“We’re great at delivery, and still bad at accepting returns,” Ryan said.
But there are opportunities to solve those problems. Carpark rooftops, basements and other areas could be used for quick returns.
5. Retailers will put more emphasis on design and editing.
Because retailing is so competitive, smart developers and retailers will use their real estate to maximize every square inch in creative and unexpected ways, such as installing pop-ups. There will also be more in-store promotions and events as companies aim to supply customers with purposeful extras that can drive loyalty.
Appear Here founder Ross Bailey said that can be as simple as dressing up for the holidays, and he notices and is disappointed when centres decorate poorly. Holiday decorations are an easy way to delight customers and those who fail to put in appropriate thought to things like design are going to fall behind.