The shopping malls of the future

Article3 min30 May 2017By Vanessa De Groot

Imagine having a robot not only serving you in a shop, but also acting as your personal stylist.

Sound far-fetched? It’s not as crazy as you think: Japanese manufacturer SoftBank has developed just such a robot, and its capabilities are being tested as we speak.

Ralph Lauren, meanwhile, has installed interactive mirrors in US fitting rooms that help customers accessorise, change the lighting, or request extra items be brought for them to try on.

Most Australian retailers aren’t as futuristic as their peers elsewhere, but as we move towards smarter retailing these kinds of technological advances – and more – may not be far off.

Change is already underway

Individual shops and shopping centres are battling to remain relevant in the face of the rise of online shopping.

These days traditional bricks and mortar shopping centres must do more than provide shops where goods can be purchased; they need to offer an experience that consumers can’t get from sitting at their computers.

It’s not that consumers have gone completely cold on physical retail.

You only have to look at the turnout when revamps, extensions or new shops are unveiled to know that they’re still visiting local shopping centres.

People still want instant gratification, says Dexus Head of Retail Development Peter Feros. They want to touch items, and try clothing on. They also like to interact with salespeople.

Feros says most Australians visit their local shopping centre at least once a week, especially when they’re easily accessible.

Customer traffic is stable, he says, so retail strategists focus on increasing dwell time – the period of time people stay in the centre.

That’s done by creating an enjoyable environment where people can work, shop and play. The idea is to transform shopping centres into local hubs that are capable of attracting a diversity of users and giving them a reason to stay, rather than just being a place to shop.

“That might be to meet other people, interact from a technology perspective, see movies, dine or hold a product you’ve seen online,” Feros says.

“It’s about the theatre,” he says, “the whole experience.”

People still want instant gratification, they want to touchitems and try clothing on.

Customer traffic is stable, so retail strategists focus on increasing dwell time – the period of time people stay in the centre

What’s right for Townsville might not suit Perth

Shopping centres vary by size, location and patronage, so there isn’t a one-size-fits-all approach to drawing in customers.

Feros says what’s right for Townsville will be different from, say, the Perth CBD. But underlying the differences are some common themes.

“The aim is to not only provide what the customer wants or expects, but to give them something more,” he says.

“That’s usually by providing a new experience. It could be in the mix of shops, or a new design feature allowing the use of technology, or perhaps open space.”

Food is a big part of the transition from shopping centres to consumer hubs. Feros says all landlords are now adopting casual dining as a way to get greater diversity of visitors. Restaurants such as Grill’d and Guzman y Gomez are becoming staples, in addition to boutique cafes.

Another feature still drawing crowds is cinemas and entertainment experiences. In fact, cinemas have defied years of predictions that they would soon be a thing of the past.

“There has actually been a resurgence in cinema patronage,” says Feros. “People want to go to the movies and cinema providers are providing compelling reasons to be there.”

And then there are playgrounds. It’s started to feel like there are no limits when it comes to the activities for the young and young at heart that shopping centres can provide. Outside Australia, some operators have included ski slopes, indoor water centres, bowling and go karts in their centres.

To find out what their customers want, shopping centre owners are going online. Facebook provides the best real-time feedback, but consultation with local councils, schools and other community bodies is also valuable.

What’s right for Willows Shopping Centre in Townsville will be different from say the Perth CBD, but underlying the differences are some common themes.

What will the future bring?

Some of the things that might be seen in our shopping centres of the future are end-of-trip facilities (including showers and lockers) and more concierge-related services, such as delivering a customer’s shopping to the car, or even doing their shopping for them.

Think technology, too. While the digital economy is what lured people away from shopping centres, technology is now being used to bring them back, by providing them with a great in-centre experience.

As well as concierge desks that provide iPads, touch screens give customers information and the ability to interact. In more futuristic shopping centres overseas, touch screens use face recognition technology to identify customers and their preferences.

Most Australian shopping centres now also have Wi-Fi, so shoppers can come in and connect for free.

This also allows the centre to gather data about shoppers, although what to do with that data is so far not decided. Wi-Fi also enables the centre to reach out to shoppers via direct marketing.

Where do shops fit in?

Just like the centre, individual retailers need a compelling in-store experience to compete and exist into the future.

Feros says shopping centre landlords lease shops to on-trend retailers for an average of five years, after which time a reassessment is made to determine if the shop is still current in the rapidly changing market.

But more than ever, landlords and retailers are working together to unlock ongoing value for both. The collaboration is often centred about the discussion of global retail trends, says Feros, and determining how new concepts can be introduced in Australia.

It’s an uncomfortable truth, but also an exhilarating one: businesses have to work hard to ensure they’re staying in touch with consumer tastes and technology trends in today’s dynamic retail world. If they can do that, bricks and mortar retailers stand a good chance of happily co-existing with online retail.

Just like the centre, individual retailers need a compelling in-store experience to compete and exist into the future.

Read on for more insights

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