New retail and malls: are they compatible?
The pandemic confined us all at home and left shopping centers and stores more empty than ever. However, the merger of online and offline has been going on for a long time but it is accelerating more than ever to face two imperatives: improving the customer’s shopping experience and rekindling the flame in malls.
In recent years the drop in visits to shopping centers has been a constant. In fact, a year ago, in October 2019, according to data from the ShopperTrak Index in Spain, the influx had fallen by 2.6% compared to the previous month and by 3.4% annually. And these data have only been accentuated with the pandemic caused by the coronavirus. In this context, we ask ourselves: are new retail and malls compatible?
Should we reinvent malls?
To the fall in the affluence we must also add the changes in consumer habits. On the one hand, they are very used to shopping online, nor do they resist new trends that lead us to a unique shopping experience at the point of sale.
We see more and more cases of malls that are transformed or are moving towards a model of coexistence.
For example, in Taiwan, the old China-Town Mall has been transformed into a public area with a lake and in which some spaces have been left so that they can be converted into kiosks or shops.
© Copyright. Photo: Daria Scagliola
In Chengdu, China, two floors of a shopping center have been converted into workplaces for the Soho 3Q development company. These are just some examples of the transformation and survival of malls.
In Los Angeles, a shopping mall in ruins was acquired by Google to become a new company complex.
On the other hand, according to research by Acitelli, in the United States the trend of converting malls into offices especially benefits coworking companies. In fact, real estate agency Jones Lang LaSalle estimates that by 2023, coworking spaces will grow 25%. This happens because offices are less risky than retail offices. In addition, they can attract people to the shops and restaurants of the malls.
In the case of establishments at street level or located in the main streets of cities, there is more and more interest from brands in what is known as flagship stores. That is, stores that act as a showroom for the product so that the public can see and test it before buying it on the Internet.
Without a doubt, it is another way of merging online and offline sales in a way that they are complementary instead of “rivals”.
On the other hand, another benefit of flagship stores for retail and mass consumption players is the savings that this store model represents at the stock and storage level, since they focus on offering a unique experience with which to transmit their values and brand identity.
© Copyright. Nike
© Copyright. Apple
Although these examples show that there are alternatives to rekindle the influx in large commercial spaces. The reality is that these are usually very expensive projects that take years. For this reason, many malls are left to their fate and fail to survive. To avoid reaching this point, new retail could be what they need to regain the fame of yesteryear.
How to make new retail and malls compatible?
In the retail sector, the trend towards omnichannel has been on the rise for some time. Brands have realized that they need to have a presence in all channels, whether physical or online.
To this reality, however, a new paradigm must be added where points of sale take center stage. We are talking about new retail, a trend that requires, for example, spaces for the delivery of orders and for the moment of purchase to become an experience. That is why at CAAD we believe that new retail and malls should go hand in hand.
Keys to new retail
As we said, in the retail sector changes and trends occur depending on the evolution of consumer habits. Thus, the evolution of omnichannel and new retail is in their hands. However, new retail is characterized by a number of key aspects:
There is a symbiosis between online and offline sales channels..
With the increase in online sales, stores are much more than a mall, they are a space to live authentic experiences.
The customer is the center of the business and services revolve around him.
These indicators highlight the need for companies to continue to maintain their points of sale but investing in a new store concept.
Actually, it is something that many retail and mass consumption brands are already doing, transforming their stores into hubs or small warehouses in order to facilitate click & collect or pickup stations and thus be more efficient in terms of delivery last mile is concerned. In short, this necessary transformation of the stores is a concept that mallss must also implement.
What can malls offer?
As we said, malls are in decline. They may never experience the golden age of when they first appeared, taking over the entire retail public.
New retail is the opportunity for malls to transform themselves and help, through their spaces, the retail sector to adapt to new consumer habits. They must become the new spaces to care for and surprise customers.
For this, there are several options:
- Increase the offer of leisure and gastronomy to become a center of experiences where it is more important to spend some time than the fact of shopping. Although, obviously, the experience leads to the sale. (see video of X-Madrid Mall)
- Give spaces for coworking and offices.
- Physical stores can become temporary pop up stores or flagship stores so that retail companies can offer that unique experience to their customers and also get closer to those who are not used to online.
Within the framework of this relationship between new retail and malls, we must not forget other fundamental aspects such as:
- Opt for omnichannel to take advantage of the fact that ecommerce needs the physical store.
- A new relationship between retail and the mall in which the exchange of information is basic with a common purpose: to attract and surprise the customer.
- Ensure connectivity because many stores will turn to technology to create innovative in-store experiences.
New consumer habits are giving rise to the appearance in the retail sector of concepts such as omnichannel or new retail. This is a window of opportunity to transform malls and ensure that physical points of sale can regain their former popularity, but offering a new type of service that focuses on the shopping experience.
Therefore, and responding to the question that gives title to this article, from CAAD we are sure that new retail and malls are compatible.