‘There is nothing new under the sun’ but the shopping centre industry has to keep reinventing itself if it hopes to achieve superior results’. So says John Milligan, CEO of Milligan.
Many years ago I co-produced a book with the English Tourist Board entitled ‘Retail, Leisure and Tourism’. As a foreword to the publication we tried to identify the world’s first ever retail and leisure experience. We couldn’t be sure, but we came up with the early travellers and traders in Mesopotamia many centuries BC who carried spices, skills and other exotic merchandise from source to find new markets. At towns and villages along the way they would send entertainers ahead to draw a crowd, and before the locals knew it they were surrounded by tempting merchandise that they didn’t need but couldn’t resist buying.
It could be argued that some retail developers lost touch with these founding principles of making retail a leisure activity as they raced to provide modern covered shopping centres and retail parks to satisfy the requirements of space-hungry retailers. More recently, and perhaps partly as a result of the amazing growth of online retail and the decline of the high street, some of us have re-discovered the thread that links to the past and we are once again seeking to create inspiring places to shop.
People no longer have to go out to shop; everything they need can be delivered direct to their homes. Our job as developers is to create a place that attracts people and gets them to interact in a physical space. This is not done with just buildings and good design, it needs to be grounded in a true understanding of who the customer is and of their motivations for leaving their homes or places of work. We have learned from a wide range of projects, including outlet centres, two airports, a waterfront Festival Market Place in Barcelona, and particularly Camden Market, that understanding the moods and emotions of people visiting a place is critical if you are to create an environment and experience that drives sales. On a summer’s day for example, Camden Market is not competing with Westfield but with experiences like picnicking on Primrose Hill, and a shopping centre’s marking and events team must fully appreciate this.
An individual will behave differently in a shopping environment according to the reason for their visit and who they are with, and this in turn affects their spend. For example, the shopping behaviour and spend of a passenger using an airport for a business trip are very different from when the same individual uses the airport on another occasion with family or friends.
There are still many opportunities for landlords looking to maximize the performance of their centre by enhancing the experience, one of which is technology. Mobile devices are already disrupting the physical retail experience with over 50 per cent of consumers interacting with their mobiles to help inform their in-centre shopping experiences. Integrated technology will be key to a modern shopping centre in terms of enhancing the customer experience and delivering both inspiring retail places as well as sustainable revenue streams. Technology is also driving Click and Collect which needs to be embraced by owners as giving additional reasons for shoppers to visit physical centres. Notably, this year for the first time more than half of John Lewis online orders over Christmas were fulfilled in store, offering great opportunities for cross-selling with connected and engaged customers.
Shopping centres ought to be seen as social brands as well as media owners and as such should be driving customer engagement and interaction on- and off-line, pre, during and after shopping visits. The landlord now has the opportunity to be part of the overall purchasing journey which, if done well, will enable the introduction of new partners and therefore new revenue models, both to enhance the customer experiences as well as drive sales.
Customer expectations continue to grow, with demands for real-time, personalised promotions increasing and shoppers wanting both convenience and wow-factor. The modern shopping centre experience therefore needs to offer the very latest ‘smart’ services and also all the features and benefits of a highly sought after destination.
Understanding your customer has never been more crucial to success. Data and insight are becoming more important, but with technology providing reams of ‘big data’ the focus has to be on gaining actionable insight which can then inform the continuous innovation of the end-to-end customer journey as well as driving both loyalty and sales.
In our view, the successful convergence of the digital and the physical worlds has to be the most exciting opportunity for the reinvention of the shopping centre of the future.