On pent-up demand, restrained consumption, the need for emotionality and empathy in the shopping mall
Anna Chubotina, CEO Arricano, spoke about the results of 2020, plans for 2021 and trends in the analytical zoom marathon from the Ukrainian real estate club URE CLUB in the retail real estate section. This author's column tells briefly about the figures and new business insights that influenced the business KPIs of retailers and motivated customers to join the actual shopping hacks.
Top experts on retail and development in Ukraine: Kateryna Vesna, Head of the Department of agency and consulting services in the field of retail real estate, Cushman & Wakefield Ukraine, Anna Koriahina, COO at Ceetrus Ukraine, Yuliia Belinska, Editor-in-chief of a professional industry title Retailers.ua were also the invited speakers of this discussion.
Changing audiences and influencing factors in the retail and development market
Looking back in 2020, today it is easier to talk about all the experiences and uncertainties that we all experienced during lockdowns and quarantine restrictions. The most valuable are the lessons learned, experience and development of new competencies, in particular the ability to maintain internal stability and balance of power in any external circumstances. Many factors of influence have changed this year. Previously, the greatest market power in the shopping malls industry was held by buyers and tenants. In fact, these two audiences were the main ones in the development of the harmonious ecosystem of the shopping mall. Last year, our business had to make efforts in a different objective plane – these are the threats of a pandemic and the impact of government decisions on market activities. The team's resources were used to resolve and manage the current situation.
Another feature of 2020 was the test of all players in the retail and development market – how much we can all organize ourselves, unite, negotiate and help each other in conditions of uncertainty.
In addition to expertise and multitasking, important competencies during this period were the ability to quickly analyze and manage the situation in new market conditions, as well as quickly implement ideas in conditions of limited time and other resources. And this meant to bear the highest level of responsibility, which became both a challenge and a motivation for your own growth.
Diversification of shopping motives
With the changing circumstances in the market, consumer demand for goods and services has also diversified. If earlier it was a simple and understandable scheme to analyze shopping based on rational arguments, now other trends have become obvious. The lockdown significantly affected visitors' ability to pay. At the same time, pent-up demand worked. Due to the inability to make purchases offline for three months, the need for socialization and obtaining consumer experience in the shopping mall increased. After all, its full cycle consists of several stages: inspection of brand products in stores, communication with sellers, selection of models, fitting, feeling of purchase and the fact of purchase, unpacking purchased items at home, etc.. Each moment has its own consumer joys and emotions that are associated with going to the shopping mall.
That is, it is now more appropriate to talk about shopping not for rational or impulsive reasons, but in the category of leisure, pleasure and satisfaction, when the process is as important as the result. Or even more important.
You should also take into account the freedom of movement when you can come to an open shopping mall at your own wish. Having experienced when shopping malls were closed, consumers realized the value of going to the shopping mall – alone, with family and children, or with a warm circle of friends.
In 2021, we will continue developing new consumer niche of the shopping mall, which regards a unique advantage. This is an option for visitors to spend time together, learn about the preferences of their loved ones, care of and feel cared, and enjoy the entire shopping process at all stages.
New value of business KPIs
With new variables in a turbulent market, such as other consumer needs and insights, falling solvency, and government restrictions, our company managed to achieve significant traffic and turnover indicators. We learned how to analyze them in a different way, which helped us better understand what solutions and advantages made certain tools work effectively.
For example, in the periods after the spring lockdown, when shopping malls were operating normally, there was a decrease in traffic by up to 5% compared to previous year. At the same time, we saw an increase in its conversion rate. Such categories as "electronics", "shoes", "sports" and "household goods" increased from 5% to 24% in UAH. In the "fashion" segment, individual retailers showed year-to-year growth, more often in the "mass market" segment. We continue to segment our target groups of visitors in detail, offering them new shopping motivations.
Under quarantine restrictions and prohibitions to hold entertainment events that were previously regularly held in the shopping malls, we learned to organize other thematic performances, flash mobs, discussions and contemplatives of the art exhibition in order to continue the planned line in which the shopping mall is a place of shopping, leisure, getting emotional pleasure and reloading from routine.
We continue to harmonize the shopping mall ecosystem and improve tenant-mix. In the fourth quarter of 2020, Prospekt shopping mall launched a season of new bright discoveries of international brands and signing cooperation agreements – New Yorker, Flo, Decathlon – these are just a few of the full list. And all this in conditions of technical vacancy.
I believe that 2021 will be a year of new breakthroughs in various industries – style&fashion, sport&healthy, food&mood, kids&happiness. After all, each product category has its own niches, which are accompanied by emotions and moods. And our team is able to anticipate trends, and see new opportunities in overcoming difficulties.