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In the midst of the economic crisis that the retail trade is having to contend with, it is plain that the gap between additional retail space and productivity per square metre is widening to an increasingly unsustainable extent. What is more, demographic and sustainability trends and economic and technological developments are also set to have a huge influence on the psyche of the consumer of tomorrow. So what will this mean for the construction and planning of new shopping centers, for the revitalisation of older retail properties, and for the development of new sites?

The signs are not easy to read, and often contradict one another as well. How can a high petrol price and greenfield development be mutually compatible? Is the e-commerce boom reducing the need for new points of sale in the “real” world or, on the contrary, is it creating a desire for more of a human touch? Should planning in an ageing Germany devote more space to the needs of senior citizens, or will this stigmatise and alienate a section of the population that is already a hard to pin down as a target group? What if consumers have a desire for greater sustainability, but this clashes with more limited budgets? Where might retail run the risk of backing a short-lived trend? What are the really relevant developments, both online and offline?

All these questions are examined in the study “Shopping centers: the 7th generation”. Its key findings are summarised below. They reveal a need to rethink and look ahead in retailing and in the retail property business. But even if the retail sector is heading for a watershed, all those qualities that have distinguished enthusiastic retailers, success-oriented center planners and smart retail property strategists in the past will remain pivotal for decades to come. These include knowledge of relevant social trends, a passion for business and a love of experimenting. It is important for retailers to understand consumers’ future value sets and to adapt themselves and their business models to social and economic circumstances.

The Gottlieb Duttweiler Institute (GDI) has imagined the world of 2020, interviewing selected experts from the retail and real estate industry, along with architects, designers and consumer researchers, asking them about their views and visions of retailing and the effects these might have on the future development and design of retail property. The GDI has condensed the main findings and trends into seven strands:

1. Positioning:

The “average” mall will disappear along with the “average” customer

An overview of the 1a locations in Germany reveals a similar picture in most cities today: large retail clothing chains dominate the offering, and the percentage of chain outlets will soon exceed 70%. The situation is often much the same in shopping centers. There is a growing danger that an offering of “more and more of the same” will leave little room to carve a distinctive profile, let alone individuality. For this reason, center planners need to position themselves more clearly and highlight themes. Without USPs, retail properties will become the victims of an enormous “overstoring” machine.

2. New urbanism:

Shopping centers to breathe the city air

In future, developers and retailers will take a greater interest in cities, as higher energy prices, a growing desire among consumers for proximity and a new sense of community shift the focus onto urban locations. But in order to restock the city with retail spaces, it is essential to be able to read it. The city landscape is currently undergoing change, with new approaches in the service society mixing up different areas of life and producing new open, integrated concepts as an alternative to closed-off mega-complexes on greenfield sites.

3. Sustainability:

Allowing buildings to flourish, inside and out

“Save energy; lavish empathy” could be the motto for applying the sustainability trend to the construction and management of new retail properties. The energy efficiency bestowed on the construction shell should be replicated in the retail area, with points of sale that can react to consumers’ needs and have business models that make sustainability a realistic proposition. Bringing nature into the city will be particularly challenging. If retail properties succeed in fusing city and nature – two contradictory themes at first glance – coherently and credibly, this should activate two important “docking points” for the consumer of tomorrow.

4. Value shift:

Creating new locations

Despite the boom in e-commerce, now more than ever consumers want to experience authenticity. This means seeing, hearing, smelling and tasting “the real thing”. Diminishing trust in the big names of retail and growing moral demands on consumption pose opportunities for individualists, especially if they can join forces to create added-value concepts. Any company that does this right can actively counter the bleak “more of the same” message with their own view of things – the beginning of a new age of diversity as opposed to the current mainstream. Learning from pioneers and professionals can also mean being able to create new, unique locations using sound knowledge of the neighbourhood and traffic volumes instead of bowing to the dictates and price demands of 1a locations.

5. Demographics:

A home from home for “Generation Gold”

The ongoing demographic shift, i.e. Germany’s ageing population, in particular will bring about a change in the focus of consumer experience. The way to the souls and wallets of “Generation Gold”, an attractive group for retailers, is through greater warmth, community and emotion, and less strident and fast-paced output. Based on the philosophy of the “third place”, the aim is therefore to offer the growing number of older people new retail spaces that represent a welcome change from their own homes.

6. Proximity:

Location is important, service even more so

Not all consumers have the freedom to choose where to shop, and even fewer do during times of recession. To reach the consumers of the future, the retail trade will have to be more flexible and accessible. Retailers will have to focus more and more on expanding their offerings with pre-sales and after-sales services that genuinely appeal to customers and packaging them into formats that are more precisely suited to the target group addressed, their locations, mobility and everyday travel routes. Product sales are no longer the be-all and end-all, but part of a comprehensive service package.

7. “Unstoring”:

Retailing leaves the shop

Cyberspace, which was once a world apart, has become a new dimension of reality, constituting an additional layer of our perception. This is increasingly influencing our behaviour in the real world. Our relationships with one another and with properties will change radically. Thanks to mobile devices, communication and consumption in the future will be something that can take place anywhere we happen to be. Extrapolating, this may mean that retailing will cease to use actual shops (solely) for selling, but increasingly for other functions as well. The retail space will become a platform for experimentation, a meeting place or a test centre in the “real” world.

In the past, retail property was a place where trading took place. In future, it will be somewhere where anything is possible. Precisely what will take place there will depend on consumers’ desires, which will need to be identified or stimulated at any early stage. Retailers’ intuition and imagination will be instrumental in establishing how this can be achieved in retail formats. How all this can be presented in an income statement will depend on retail property developers’ ability to anticipate. It will be good if all concerned hold the key to the future: knowledge of social and economic trends for consumers. After all, customer focus will still be at the top of every retail agenda in 2020.

The complete study “Shopping centers: the 7th generation” can be purchased from the German Council of Shopping Centers for €135.00 + VAT. Simply e-mail office@gcsc.de

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