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Consumer Trends 2024: Shopping in a post-COVID world, re-purposing, and demanding children

14 December 2023
Following the world's leading international retail property event (MAPIC), bringing together the retail, food, leisure and tech communities from across the globe under one roof – we look at the future of retail.

The MAPIC community are mature folk and have never risen to the continued [click]bait of "bricks and mortar retail is dead" spouted by the mainstream media. In fact, the property sector as a whole never fully embraced that rather generic statement – of course, there have been concerns and never more so than now, in what might be perceived as a fairly challenging market. But, as senior figures from global property companies suggested, the retail property sector is the strongest of the weak. Transaction volume in the property sector as a whole is down 52% but "only" 39% in relation to retail property. 

Whilst you may think the attendees at MAPIC are overly optimistic, we would challenge that and say that, globally, evidence suggests retail property is faring better than people may expect. Sentiment is positive and there has been a bounce-back since COVID. There was a fear that the use of online shopping during the pandemic would mean physical retail would simply evaporate. That has not happened and whilst e-commerce growth did spike during COVID, its activity levels have now returned to pre-COVID levels, particularly in the UK, Spain and Italy.

E-commerce continues to evolve and remains an emerging, not an established, market. The talk at MAPIC was very much about retailers needing to truly develop an omnichannel strategy and consider the impact of 'ship from store'. The two truly need to live side-by-side. We know logistics is a growing area, but warehouses are not just stocking for online retailers: they are stocking for physical shops too!

What else did MAPIC tell us about what we have seen post-COVID?

  • Shopping centre sales are currently above pre-pandemic levels and spending is up.
  • Retailers have seen a 20% increase in transactions on a like-for-like basis.
  • Tenants are focusing on a quality output, on fewer stores and on right-sizing.
  • There has been an increased focus on adaptability and collaboration between landlords and tenants. Landlords are helping to create strategies with tenants and are, generally, having to be flexible to adapt to retailers maintaining pace in response to customer demand. Does this extend to landlords increasing the financial incentives it is offering to tenants? As you would expect, landlords simply responded to say that there is no broad-brush approach and it is "nuanced". Effectively, "No comment"!

So why else should we be positive?

Why did we come back from Cannes humming Ian Dury and The Blockheads's "Reasons To Be Cheerful, Pt 3"?

  • Innovation and excitement is running through the veins of shoppers! "Prime" retail real estate is performing exceptionally well because it is creating a destination – the big brands are investing in flagships, pop-ups, collaborations and activations. The importance of experience is set to grow.
  • Physical retail remains at the heart of the consumer experience and the focus by retailers on new experiential formats. Whether through shop refurbishment or in-store events – all create excitement.
  • Being in the right position, with great visibility and offering a new experience to consumers, will be the key factors for brands that want to succeed.

We have seen a great example of this in the UK with EE launching experience stores across the country combining physical and digital experiences. These stores contain the latest connected technology and offer shoppers the opportunity to get hands-on with the latest innovation. 

An overriding theme of MAPIC was the concept of re-purposing physical space. With the increased focus on ESG, it is no longer appropriate for landlords to simply demolish and rebuild – there is a crying need for vacant or redundant retail space to be reused with purpose and a focus on community. Landlords are evaluating their sites and have to think one-step ahead focussing on flexibility and reversibility.

We heard plenty of positive examples of investor and developer landlords doing exactly that. For example, the Landsec's part re-purposing of the St Davids Dewi Sant in Cardiff, where a park is being created together with food and beverage provisions, or Enjoy Strategy working with shopping centre landlords across Europe to introduce the healthcare sector into malls. This is leading to shopping centres or specific areas becoming "all day destinations" where you can eat, shop, play and, now it seems, be looked after!

There is no better example of this than the Kings Cross development in London, described as a transformation from a "London backwater" to a "regeneration feat", combining retail, food and beverage, office space, affordable housing, parks and open space for hosting of events. 

So what did we learn from MAPIC 2023?

The customer will decide our shopping future and that they are truly demanding children – we want it all and we want it now! Additionally, landlords and retail tenants will have to increasingly work together to give 'their children' what they need.

If you have any questions or would like to discuss any of these topics and what they mean for you and your business, please get in touch with our Consumer sector and Real Estate experts. 

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