Shopping malls status under pressure from forces and trends
Anna Chubotina, CEO of Arricano, took part in a panel discussion of the forum, which is dedicated to trends in the commercial real estate market and dispositions in development, taking into account COVID-19 realities. How the expectations of different stakeholders have changed and what the market will be like tomorrow — this was discussed at the forum. Anna shared her own observations in her column for the Property Times, and also told what market monitoring tools are used in Arricano
Impact forces and trends
Quarantine and lockdowns, which dramatically affected the operation of shopping malls, forced us to take a fresh look at social realities and the strategic course. After all, the shopping mall from outside, more than ever before, was influenced by several "forces" at once. These are drastic decisions of the government and local authorities, the activation of new sales channels, where delivery to the right place has become an additional value, and fluctuations in the solvency of consumers, when the majority sought to accumulate a budget without having confidence in the future.
However, even under such circumstances, with existing limitations and loss of confidence, we observed an increased need for socialization and emotional fulfillment outside of everyday life at home. There were new motives for shopping as therapy, as a replacement for inaccessible travel, as an investment, thanks to which such categories as "household appliances", "jewelry", "household goods", "beauty and health" received a new impetus for development. As a result of changing the everyday life landscape, the consumer profile has also changed. Therefore, our team had to review the individual characteristics and capacities of the shopping mall, find new points of contact offline and online, due to the rapid growth of omni-channel in retail.
Given the unexpected socio-economic crisis caused by Covid-19, in the analysis of the retail real estate market, in addition to such business indicators as profitability, supply, demand, traffic, vacancy, conversion, etc., it would be worth adding another typology-organic and unpredictable trends. Actually, it is the latter that have a significant impact on the market context of retail real estate.
Trends in the quarantine context
Under the influence of lockdown and related messages about safety and "stay at home", the work-life model has changed and the need for socialization outside the home has increased. At the same time, consumers began to value service and comfort more, understanding the added value of these options.
Another important factor that we take into account when interacting with the audience and communities of the shopping mall is an increased demand for empathy and emotion. And therefore, to more vivid, concise and creative communication messages that "hit close to home". For example, visitors to shopping malls are pleased when brands and stores there feel and share their moods, offer shopping motives and promote spontaneous interaction while gaining a consumer experience. This includes offline communications at the point of sale, consulting and recommendations, service, as well as various thematic performances.
Therefore, it is logical that today, more than ever before, collaboration projects take on a new meaning, when B2B partners with similar values and goals unite, strengthening each other in the B2C plane of shopping malls.
Using the example of our shopping malls, we can see that traffic is being restored. It has not yet reached the level of 2019, but the growth rate of trade turnover outstrips the dynamics of traffic. And this indicates the conversion rate of retail real estate, which is associated with a more targeted nature of visits to shopping malls. After the restrictions are lifted, visitors will return to the shopping mall in 2021 faster than in 2020. This supports sales of all retailers and gives hope for a rapid recovery of the industry.
International and domestic chain retailers are further implementing their plans to open new stores with a request for high-quality retail space. Market players continue to search for niches, develop and build up their potential.
About the status of the shopping malls
By building transparent, long-term and sustainable relationships with tenants, we strive to develop a model of interaction with brands in an omni-channel representation, where the place of the shopping mall is significant in all manifestations of the brand.