New DNA of shopping malls. In the wake of the ICSC-2018 conference
Retail Hacks by Arricano: author column of Anna Chubotina
Director of Arricano Real Estate Plc
The traditional retail is dead. The location of the project is no longer the pledge of success. The traditional business models are under pressure. Change or die. These are just some of the statements of experts who spoke at the ICSC-2018 conference about the future of retail. If you discard the emotional color of some of them, you’ll see that the whole industry is trying to solve a rebus about the future of shopping malls, the future which is already here.
It is obvious that modern shopping malls compete no longer only with each other, but with the entertainment available not only in real, but also in a virtual world. And this means that shopping malls must evolve very quickly in order to survive. The good news is that it is possible. But to do this you need to make a revolution by changing the DNA of a shopping mall.
Everybody knows that consumers become more demanding. The consumer wants to get not only “bread and circuses”, he/she wants to learn something new, to feel unique, to come to a shopping mall not just for shopping, but to get emotions and new experiences. In short, he/she wants to feel happy and protected in our shopping malls. One who can make him/her feel this way will win. It's not an easy task, isn’t it? And there are no ready answers. There are ingredients that should be mixed each time in a new way depending on the task.
The attitude towards the visitors of shopping malls has changed. They are no longer consumers or visitors. They are our Guests. And how do we meet our dear guests? We do our best. We want to make them happy. But the task is not complicated because we know what they like, and, the most important, we know what they do not like.
Data is new oil. It is important to know about your guest not only his/her sex, age, where he/she lives, where he/she came from. But also to know how old is his/her beloved dog, when he/she has a birthday and what color of suits he/she prefers. Why the guest doesn’t visit a mall for a long time, where else he/she makes purchases, why doesn’t he/she buy at our shopping mall. It is important to use this data to satisfy the guest to the fullest extent, to make his/her stay at a shopping mall / store comfortable, pleasant, safe, productive, time-and money-saving. For each guest a unique list of needs, which we must know shall be made.
The effective management of such data is the “golden key” increasing the turnover of shopping malls. The companies that offer their customers products, services, entertainment based on individual needs will win. For example, in 2015 the most valuable asset of Caesars Entertainment was not real estate in Las Vegas, but the Total rewards loyalty program with a database of all customers.
Spaces instead of premises.
The attitude towards premises and common areas of a shopping mall has changed. Today, the leading developers think by the categories of multifunctional spaces where a visitor can have a good time, develop his/her creativity, do sports, have fun, eat delicious food and undergo a medical examination. And at the same time he/she shall be surrounded by a unique environment with a large number of open spaces, for which rationality and feasibility have become a new standard.
At the same time the requirements to interior and exterior design and to the architecture of a shopping mall, in general, have increased. The building should harmoniously complement the city's landscape. And a visitor should feel in a shopping mall better than at home: beauty, comfort and delicious food – these are the additional impetus to leave the house and to go to a shopping mall.
The example of such an approach to the development of shopping malls is a two-time winner of ICSC Europapark prize in Salzburg. This project which was launched in 1997, renovated and completed in 2005, is considered to be one of the most beautiful shopping malls in Europe and is a tourist attraction of Salzburg and a shopping mall No.1 in Austria, with turnover per square meter (9630 Euro/m2 /hour). In addition to the unique architecture of the famous Italian architect Massimiliano Fuksas and a quality tenant mix, the project is known for its restaurants: Raschhofers Rossbräu with traditional Austrian cuisine, yayayao - the Asian cuisine restaurant, DIDIlicious with regional and international cuisine, awarded with “one toque” by the influential French edition guide Gault Millau. The presence of such restaurants in the shopping mall confirms the trend of innovative dining. And the jewel in the crown is OVAL - a scene where concerts, cabarets, theatrical performances are held.
Marcus Wild, CEO of Europapark, shared the recipe for Europapark’s success which is based on three components:
1. A shopping mall is remembered by its architecture, it shall be easy to reach, simple and understandable by a guest.
2. A guest shall never be boring, since a mall shall be exciting, competitive and sexy.
3. It is built by people for people. The concept of a mall is based on a cultural heritage of a country, family and employees.
Tasty, useful and beautiful
The relevance of F&B in shaping of a unique consumer experience has increased. Variety, quality, the presence of local heroes, healthy food, superfoods, as well as dishes containing vitamins and minerals -these are some of the main trends noted by the experts. Simultaneously there is a demand for a very fast service and a demand for restaurants of “high” cuisine. Food halls which are also called food co-workings become more and more popular. Architecture also becomes an important component by the construction of restaurants and food spaces for which the design becomes now as important as the menu.
Service is a mainstream
Even more retailers are focused on customer service more than on direct sales. They want to create an atmosphere that stimulates purchases. For example, some retailers include coffee shops or health and beauty formats in their stores. It is possible, for example, to make an event in a shopping mall, getting a manicure or a hair setting as a bonus. For electronics shops VR-zones are must-have, robots which not only help you to find the necessary goods quickly, but also entertain you, appear in supermarkets.
Retailers keep on experimenting with physical space, they open pop-up stores, testing their new products, collecting information about changing preferences of the target audience.
A vivid example are the top-of-the-line Apple Stores which have long been not just the places where goods are sold. They are spaces where a brand informs customers about its values and receives the feedback immediately.
For retailers introduction of new technologies is a big challenge which requires tremendous investments. A lot of mastodons began actively invest into such solutions, because this is the only way to stay afloat, to be interesting to a client.
The ICSC conference coincided with the launch by Inditex company of augmented reality technology in 120 Zara stores around the world that I could see at the store in Barcelona. Though the experience raised a lot of questions, it is obvious that this is just the beginning.
In UNIQLO store in Barcelona which is located in a beautiful 19th-century building, there is a corner where UT collections of T-shirts, created together with well-known personalities are presented. Such corners exist in all top-of-the-line stores of UNIQLO. They are equipped with the Utme! mobile application which allows a buyer to create a customized T-shirt with a print, selected from a large number of designs. The first and the second floors of the store are connected with the conceptual staircase in Tokyo. It is a 9m x 5m LED display demonstrating scenes from the life of the city of Tokyo that underlies the identity of UNIQLO brand.
The store has a click & collect stand which allows a client to order a home delivery product. This store is my favorite store today. It demonstrates how history and cultural heritage can be organically combined with a new technological world, complementing each other. Within the framework of the conference, Mango represented the concept of digital fitting rooms which may function due to the introduction of a “digital mirror IoT” by the company. The mirror allows buyers to scan clothing labels in a fitting room and then to communicate with the store staff asking to give the products of the required size and color, being in the mirror through the digital clock.
Isn't it a convenient service?
Unlike fashion operators who have long been concerned about reducing of the digital divide, F&B operators just recently have realized the need to work in two directions: to use digital channels and to introduce retail technologies, everything which can enhance the emotional component and create a memorable client experience. In some airports Pepper robot acts as a concierge, greeting guests, telling about the menu and giving recommendations that can not but remember even by the most sophisticated guests.
A conclusion can be made - in order to remain interesting for your guest - you need to create a unique consumer experience. It is necessary to make the guest’s stay in the mall as comfortable as possible, to make the guest feel involved into the community, into the cultural heritage, to offer a unique set of leisure activities, including a memorable gastronomic experience, to offer something that fundamentally differs from online experience. And the only thing that you can not afford today is to be boring, since the more you bore the more you pay.