Shopping nowadays is as much ‘experience-based’ as it is ‘needs-based’. While online offers the best value and convenience, shopping centres will always have the upper hand from an experiential point of view. At least for the time being.
When I operated my first restaurant in 1980 in Manchester’s Arndale Centre, the shopping centre closed each day at 6pm and all day on Sunday. The centre only had around three cafes, a couple of high-street catering names, no food court and not even a McDonald’s.
Now there are many more hours, many more shops and many more reasons to visit shopping centres. This has resulted in the need for landlords to be a lot more savvy when selecting businesses to occupy their space. For years, landlords have been battling to provide outlets that appeal to a wide blend of demographics. This has always been challenged with a simple need to let space and bring in rent.
Certainly the winners in the long term are the landlords who have a wider strategy in relation to tenant mix, and much broader retail and leisure offering for the consumer. The centres that are reaping the rewards now must be those that held their nerve after the retail collapse of 2008 to 2010, and waited for the right tenants to sign up to their shopping schemes.
Landlords that simply let space to anyone who was willing to pay rent, regardless of offering, may now be paying the price. They may be facing difficulties in the same way that some town centres currently are. With rows of discount and charity shops, often no decent leisure or catering offering, and expensive parking – it is easy to see how some town centres have simply got it wrong.
Successful shopping centres
With local councils, constantly under pressure to provide so many community services, it’s understandable how they often fail to recognise that longer-term creative retail planning can significantly improve the importance of attracting shoppers to their towns.
Some town-centre locations have a mountain to climb if they are going to win back a wider demographic audience. Town planners may gain some valuable insights when they look towards the strategies being implemented in the UK’s more successful shopping centres.
Intu, for example, has gone as far as introducing “Champagne bars” into some of its schemes and it constantly upgrades its catering offers to include many more mid- to up-market restaurant chains. One of Intu’s most successful sites is the Trafford Centre, Manchester, which boasts a vast range of catering and dining facilities, has endless free parking spaces, a ski slope, indoor sky diving and even Legoland all part of the same scheme.
On a more international level, Dubai’s super malls have truly innovated their retail and leisure offering, with world-class aquariums, ice-skating rinks and phenomenal water fountain displays, offering the widest possible choice of retail chains from the value-led Carrefour to the super premium couture clothing brands
High-quality environments
Shopping centre landlords are pulling out all the stops to ensure they create high-quality environments that are exciting and create that all-important three-dimensional experience for the customer. If landlords can satisfy a range of consumer needs all under one roof, their shopping centres will attract more customers who will want to come back again and again.
We’ve also seen retailers making strategic acquisitions to meet the changing demands of today’s consumer. A good example is Tesco, that bought restaurant chain Giraffe last year, as it seeks to create even more reasons to bring the whole family shopping. Selfridges in Manchester has teamed up with restaurant brand San Carlo to provide their well-heeled shoppers with their in-store offering of Bottega from one of the most successful restaurant chains outside the capital.
There are several reasons why this cross-brand approach is so appealing to both retailers and foodservice providers. Firstly, it makes great business sense to bring a strong and demographically appropriate restaurant brand in-store to act as a “hook” for customers. It must be helpful when retailers can simply focus on what they’re good at themselves. Both Tesco and Selfridges can concentrate on retailing, while Giraffe and San Carlo provide the appropriate dining experience under the same roof.
Big spenders
Interestingly, a recent study by CACI has shown that shoppers who eat and drink at shopping centres spend 48% more. Apparently, they are also spending less in cafes and on fast food, but more in restaurants. This shift is likely to be driven by the subtle change in the demographics of the UK as a whole.
On one hand, we have an ageing and leisure-focused population of ‘baby boomers’, with more free time and disposable income available to them. It is no surprise they’re willing to spend more and want to have a leisurely meal as part of their lifestyle.
On the other hand, ‘generation Y’, a much younger demographic, are short on time and are well served by brands such as Boost and Itsu, where they see the benefit of a ‘meal in a cup’ or their ‘on-the-hoof’ style healthier options.
Ultimately, it is this combination of a solid retail and leisure offering, combined with an ability to provide to the wider demographics that gives shopping centres the competitive edge.
Where e-commerce is set to double in the next decade, it is becoming increasingly important for shopping centres to plough more time and investment into creating the best experience for its customers.
Richard O’Sullivan is the co-founder and CEO of Boost Juice Bars UK. He and his wife, Dawn, were the founders of 100-plus retail chain Millie’s Cookies, which they sold for £25m to Compass Capital in 2003.
