My young cousin saw me shopping for jeans on my laptop recently and couldn’t quite understand it. In her eyes, you’re either her parents and therefore shop in-store (and not that often) or, like her, you shop little and often on your phone. That I sat somewhere in the middle was a bit confusing.
And it turns out our perception of brands is different too. Whereas I just outsourced my thinking to Levi’s, she was much more content browsing Instagram stores and fast fashion houses for simple purchases while saving up for true luxury items. So why would she ever visit a shopping centre if their mid-tier stores miss her needs completely?
This is the problem shopping centres across the country continue to face. It’s been clear for a few years now that their retail footprints are losing the battle to online among Millennials but if Generation Z find they can’t even shop in them it’s only going to get worse.
That’s why today’s news of Hammerson’s £400m sale of seven of its retail parks might not be too big a surprise. Trimming down its portfolio of non-performing assets is essential if the company is going to have any sort of chance of enticing shoppers back into the likes of Birmingham’s Bullring.
The sale is the largest of a UK retail parks portfolio in the last decade and is comprised of parks across Britain. The group has now sold 14 locations since July 2018.
And the pain is being felt across the sector. Last week shopping centre giant Intu saw its shares plummet after a Hong-Kong based retail property investor ended talks of injecting cash into the business. Mid-market retailers falling into administration or taking out company voluntary arrangements (CVA) to cut rent bills has hit Intu hard over the past year and left them looking for cash to shore up the balance sheet.
While sector watchers might be encouraged by reports of increased shopping centre footfall at the start of this year, investors looking at the bigger picture know shoppers’ habits are only moving one way. Short-term figures aside, if the centre operators can’t create shopping experiences to bring in younger consumers, the presence of older, less frequent shoppers won’t matter.
But here lies the opportunity. Reimagining how we view these large, sprawling centres is key to their survival. Cinemas, restaurants and personalised shopping are just some examples of how companies have aimed to keep us close to the products but the future could be even more experience-led.
An extreme case study is US mall American Dream Miami which will offer an amusement park, indoor ski slope and water park, with Westfield including plans for an outdoor music venue in LA.
Perhaps more reasonably, the near future could see small brands open pop-ups or offer in-store exclusives the same way Supreme or Palace encourage customers to come in rather than shop online.
Whatever the strategy, innovation will drive how we see shopping centres - they have all but lost the online battle but it remains to be seen just how they plan on changing their own purpose so there’s no battle at all.
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