5 Observations from the Shopping Centre
Thanks to COVID, the idea of a shopping centre visit, as an activity or general browse, has been challenged and now the customer may think twice before heading out for a shop. 2020 saw many changes in behaviour across society. Fundamental norms no longer exist. So, how has the centre shifted in our psyche, a year after our lives changed.
Here are my top 5 general observations:
• Off price – of course, for Jan and post-boxing day sales there is an expectation that seasonal sales stick around, melding into the next promotional season; but where is the new ‘news’. The time for quitting stock as the main window message has moved on. Are customers not worn out after Black Friday, cyber-Monday, boxing day etc? Are FOMO-driven sales redundant now that as we have so much sale choice? While there are some retailers mixing it up there was still a lot of off price (namely the struggling department store). In other words, are we creating sales addict consumers?
• ‘New retailer coming’ – in other words retail vacancy, not a surprise to see but a disappointing indication of retail failure as opposed to the hope of something genuinely new. This is something we will see a lot more of if landlords can’t offer more sustainable arrangements for them and their tenants. In the USA the 4th quarter results showed the mall vacancy rate raised another 0.4% to 10.5%, the highest in more than two decades. “There's "trouble brewing," even for upper-tier malls, once considered mostly immune to the challenges at lower-tier centres, according to a recent report from S&P Global Market Intelligence.
On the flip side…
• Pop-ups – A local art gallery had taken space as a temporary pop up. A great initiative especially in a time we are all investing in our home environment. Pop-ups offer an attractive stopgap for landlords and an enriched consumer experience for shoppers, filling vacant space, albeit short-term, and providing the art gallery with a new audience.
• The new normal – a phrase, which is in danger of rapid burn-out, is nonetheless applicable here. The new COVID practices, signage and human interaction no-longer feel out of place. We are used to this now. Stores have been completely re-laid, processes have been applied and VM and POS everywhere has been updated. So well done retailers, this is no mean feat. The noted exception was a branch of Priceline. The store in questions was co-located with a medical centre, presumably requiring commensurate medical consideration, but it was a turn off to a general shopper.
• Footfall – the supermarkets are still the anchors, which might give some comfort to mall-owners given their success during the pandemic. Over 2020, those who didn’t switch entirely to online shopping, their only trip out might well have been to the supermarket. We bonded and increased our trust in them. They kept the stores clean, stocked and safe. However, retailers positioned too far outside of the natural flows between the car park and the supermarket were quiet. And as a consumer stepping outside the flow may have felt somewhat perilous, as if you had left the beaten track and needed to get back.
So where will all this end up, it was announced this week that Westfield is leaving the US and it was speculated that the sites might not be bought by the retail sector.