September 24, 2019

The world is changing and so too our retail environment, driven by technology, urbanisation, economy and sustainability. We need to adapt putting customer’s needs and desires ‘first’ to stay relevant and create long term business success. Consumers are more demanding than ever and getting them to notice your retail brand – is proving to be more and more difficult.

Investors, developers, retailers alike – take note – innovation and the creation of new experiences which meet todays informed and empowered consumers will ultimately come out on top. 

Here are some key retail trends which in our opinion are the principal trends happening across the retail sector globally:

  1. The rise of Omni Channel Retail
    Combining online and offline is the biggest retail trend, also known as the omni channel experience. It is becoming evident that most of the larger retailers need both physical stores and digital to stay internationally relevant, alive and improve their successes e.g. Zolando in Germany, Amazon Go NYC, Seattle. Notwithstanding, the future of retail isn’t linear, and we should not over rely on technology to solve all trading difficulties.

    We must not forget that ‘Retail’ is a social thing and there can be huge disconnects between phone eco systems and social eco systems. The presence of a physical store has major relevance in building trust, perception, awareness and confidence in a brand. There is no doubt that Smartphones are driving digital commerce growth in Europe and we expect this to continue at a fast pace.
  2. The increased use of data
    The importance of collecting data will continue. With consumer behaviours and engagement changing at a fast pace, the need for data collection will be essential to drive better experiences. There is plenty of data available however the ability to capture, understand, analyse and put it to ‘good’ use will be the test. The need for both landlords and Retailers to develop joint business planning methods maybe the way forward.
  3. The rise of the ethical consumer
    Consumers are also progressively prioritising their conscious values and are considering more and more the social, environmental, ecological and political impact of products or services they buy and consume. The increased awareness of sustainability is influencing purchasing decisions e.g. Everlane, Patagonia, Addidas.

    In addition, Europe’s population is ageing and a new kind of affluent, time rich mature consumer is emerging, with a strong focus on health and wellbeing. On the back of this landlords/developers are looking to reposition their assets and introduce leisure and entertainment occupiers. In some case’s this sector is becoming a key anchor.
  4. The inevitable urban shift and regeneration
    Better Cities, integrated neighbourhoods will cause a big shift in population towards urban cities. By 2050, it is understood that 70% of Europe’s population will be living in Cities which we should now be focusing on creating better and greener urban environments. The need for cars and parking lots will become less important replaced by public transport or City bikes. Fully integrated mixed use developments will be a common theme with urban City regeneration.  The positive effect of this will be that people will have less commuting and want to live, work and shop in the same area providing for a better work/life balance.
  5. The importance of placemaking
    Creating ‘meaningful places’ are now essential to allowing people connect, socialise, get inspired, experience new things, shop eat and naturally feel attracted to spend time. This will be an ongoing trend for new and existing developments with greater emphasis on our urban landscapes.
    The distressed occupier. Occupier distress is impacting on industry perception, although sentiment should pick up through 2020 due to positive underlying fundamentals in Europe, but investors will remain selective regarding retail assets.
  6. The utilisation of economies of scale
    Retailers and landlords are increasingly looking at mergers and acquisitions and partnerships/alliances in order to achieve growth and benefit from economies of scale. E.g. Carrefour/ Google partnership in France, M&S/Ocado joint venture re online delivery service, Hudson Bay company/Signa Holdings Gmbh – two leading department stores creating one of the largest European omni channel providers with 243 inner City locations.
  7. The polarisation of performance
    European retail markets are seeing a polarisation of performance, with destination and convenience locations and luxury and discount sectors outperforming mid-market offerings.

    The landscape is evolving, and your survival depends on how well you adapt.
    In conclusion, the industry needs to advance, adapt and stay relevant to the fast-changing pace of its end user, the consumer - otherwise it is destined to fail.

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