While it’s often perceived that the culture of shopping malls is an exclusive American tradition, the truth is that the United Kingdom has consistently been at the forefront in the retail landscape, establishing pioneering shopping centres long before others. For instance, the Bull Ring in Birmingham, which opened its doors in the 1960s, is a testament to Britain’s retail evolution. Remarkably, this modern shopping centre was built on the historic site of a market dating back to 1154, making it Europe’s inaugural indoor shopping complex. This development was positioned as a thrilling retail exploration, introducing a refreshing concept of shopping to the emerging consumer generation.
There are now at least 750 shopping centres dotted around the United Kingdom, including iconic retail destinations such as Westfield London, Bluewater in Kent, and Manchester’s Trafford Centre. Even as ecommerce has rewritten the rulebooks for brick-and-mortar businesses, shopping centres established themselves as places to gather, eat, see and be seen — and, of course, to shop.
Like similar retail hubs all over the world, though, Britain’s shopping centres have struggled during the pandemic. As of last year, national spending levels had rebounded to pre-pandemic levels — but shopping centre spending remains 25% below the levels seen before COVID. Along with the near-death of Britain’s department stores — 83% of which closed between 2016 and 2021 — that leaves the country’s shopping centres in urgent need of a boost.
🏆
The 2024 Creative Retail Awards are open for entries.
The Creative Retail Awards are much more than a mere accolade; they represent the pinnacle of achievement in the retail industry. Garnering a nomination or winning one of these awards is a testament to innovation, excellence, and leadership.
www.creativeretailawards.com
While King Charles III’s coronation event brought an influx of visitors to London from around the world and nearby regions, shopping centres must seize this opportunity to ensure long-term success. Instead of solely focusing on the short-term surge in foot traffic, they need to strategically plan for their continued growth and sustainability in the wake of this momentous occasion.
How to revive shopping centres
To survive and thrive, shopping centres will need to show that they can adapt to the changing needs of today’s consumers. The days when shopping centres could reliably draw crowds of consumers flocking to shop at flagship stores are behind us. The cold reality is that some retail hubs, designed around single huge retail brands, likely won’t survive that shift.
The winnowing of shopping centres that can’t evolve will present opportunities for those that can shift gear and shift direction, though. Increasingly, we’ll see shopping centres pivot away from pure retail strategies, and start embracing a more diverse approach that leans into residential living, leisure activities, sporting events, workspaces, and more. Instead of going to shopping centres solely to shop, in other words, people will increasingly go there to live.
We’re already seeing this trend taking root: food and beverage brands now account for about 20% of footprint at many shopping centres, up from around 5% in the 1990s. Owners are leaning into that trend, adding climbing gyms and wellness centres to draw people in during the daytime, and cinemas and venues to keep people on-site well into the evening.
Experience is everything
Retail will always have a place in shopping centres, of course. But we’ll see retailers, too, having to adapt to the new reality. Just as HMV’s resurrected Oxford Street flagship store is set to focus on signings, performances, and immersive experiential technologies to draw in crowds, so shopping centre tenants will need to look to delivering a more compelling retail experience in order to stay relevant in the new era. Successful retailers will see their stores as outposts for their global brand, as part of an omnichannel strategy that embraces online shopping, and uses a real-world presence to stay relevant and deliver a more streamlined and connected retail experience. Experiential retail will also offer new opportunities to dazzle consumers with high-tech toys, immersive experiences, and hands-on access to a carefully curated range of the latest and greatest products.
Brands will also find that they’re able to drive value by investing in people, and making physical stores places where customers can come for truly expert advice and support from motivated and engaged brand experts. Think about Apple’s Genius Bar, for instance: by hiring and investing in true brand ambassadors, Apple has made its stores a must-visit destination for users looking for advice, help, or simply a fellow Apple fan to geek out with.
A smarter approach
For both shopping centre operators and individual tenants, executing a pivot into a more experiential and lifestyle-driven shopping experience will require more than just a commitment to reimagining the future of retail. It will also require actionable intelligence to enable strategic overhauls and tactical interventions along every step of the consumer journey.
With today’s smart cameras and footfall sensors, for instance, it’s possible to understand exactly how shoppers move through a retail hub. Using AI algorithms, it also becomes far easier to understand which stores shoppers from different demographics pause at or enter, and which they pass by. Such insights make it possible to understand how shopper flows and behaviours are evolving in real time, and to aggregate insights from multiple stores — or multiple shopping centres — to understand which strategies are working and which need adjustment.
This shift to a more intelligent, data-driven form of retail management will ultimately enable shopping centre operators to create the experiences that shoppers want — even before consumers themselves have realised how much their habits and their needs have changed.
Stop guessing what shoppers want
By focusing on shoppers’ actual behaviour, and identifying new trends and patterns quickly, shopping centre operators will be able to pivot not just more quickly, but in the right direction — and that, in turn, will ensure that they are much more likely to land on a winning strategy.
Times are changing for shopping centres, and retail leaders can’t afford to simply throw ideas at the wall to see what sticks. In order to succeed in the coming era, and make their properties profitable and sustainable for years to come, operators will need to use technological solutions and real retail intelligence to identify the strategies that will drive both footfall and revenues.
Shopping centres are here to stay, and British retailers have an opportunity to continue to lead the world. But times are changing fast — so make sure you lean into that change, and embrace the new consumer behaviours, and new retail technologies, that are driving our industry forward.
By Joe Shasteen, Global Manager, Advanced Analytics at RetailNext.
