It is no news that shopping malls need to adapt and follow new consumer demands. With many radical changes accelerated by the COVID-19 pandemic, this industry should concentrate on providing an innovative experience.
Currently, we find a more digital-based consumer who expects frictionless transactions, customised experiences, and elevated conveniences. These new purchase drivers demonstrate the need for shopping mall transformation, while creating unique opportunities for the industry.
Evolving consumer behaviours drive opportunity
Now it is not enough to offer the physical space for consumers to find goods; retailers should entice consumers with a more enriching experience that fosters a sense of community. Sensory experiences will also be the key. With the development of digitization, the tactile experience will become more and more important, because the store space will become a place where all our senses will be used to experience products with the help of multi-sensor technology.
For millennials and Gen Z, shopping is an act of fun, a recreational activity in which the transaction has become completely secondary. So, as the new generations find a clear difference between shopping and buying, what brings customers back to the shopping centre? Landlords and retailers must help to ensure that customers who step into the store spend more time for the experience, through improved product displays, personalised customer service and, ultimately, become more loyal to the retailer.
The role of shopping malls needs to be recast to serve multiple purposes
Transforming a shopping mall into a “consumer engagement space” (CES) is based upon the experience economy. Future CES will include retail stores. These retail stores usually adopt smaller formats, are less dependent on inventory, and will be more dedicated to creating customised brand experiences through virtual reality, augmented reality or mixed reality where consumers can lead on their unique shopping and product experience here.
The days of static storage are gone. In the future, the retail space must have more focus, inspiration, and provide all consumers with multiple sensory experiences. In order to provide customers with more experience, retailers must establish a connection between analogue experience and tactile experience, and combine it with data collection, information and logistical support digitization.
Stores will play a more important role and greatly enhance the experience, including restaurants, theatres and event spaces, museum exhibitions, theme parks and other attractions, indoor ice skating and ski resorts, and water parks. Pop-up stores will also be very important for the new CES, because they can bring unexpected experiences for guests, and provide an important testing platform for new retail concepts and brands.
Driving greater customization in the tenant scene while developing a new leasing model captures that the value from new models
The evolution of retail centres will have elements of value centres, as they will focus on satisfying consumers in specific life stages or lifestyles with common needs and interests, but will be supported by residential housing, making CES more than just a place to visit, but a place to live. From mature baby boomers, people who want to scale down and get a variety of convenient services, to young professionals and the newer generations, providing retail stores, restaurants and theatres, work and entertainment venues, gyms and spas will be essential.
Retail real estate owners should embrace current consumer shopping preferences and work hand in hand with retailers to offer exactly what consumers are expecting —and more.
