Forget the fluorescent indoor mall that’s been synonymous with shopping for years. The future of retail will look starkly different 25 years out. Innovations are already threatening to become mainstream and, as consumers shift a larger chunk of their spends toward the web, experts say bricks-and-mortar locations need to undergo a complete makeover to stay relevant in future decades.
This essentially means a different tenant mix, resized selling floors, and technologies and experiences that give shoppers a reason to leave their couches and hit the aisles.
Today’s shopping centres have been hit hard by the Internet, and easy access to online shopping. This means malls need to innovate, urge brands to treat their stores as exhibition spaces where customers expect an intense sensory experience, where they can browse, touch and feel products.
Shops need to be treated as an extension of – and complementary to – a brand’s online portal.
Customised, Tailored Malls
A shopping centre is a place for the individual; customised and tailored. The customer continually browses in the shopping centre and online for new things, ideas, experiences, for surprises, for the rare. The customer who visits the shopping centre does not feel the need to buy anything, therefore, the success of shopping centres is being measured by footfalls rather than sales.
A mall needs to be generic as well as flexible to enable mobility and adaptability of spaces available for different brands. A brand one month may need 300 sq.mt. to present a new product, but the following month perhaps just three linear metres plus some complementary space – all demands that a mall’s management needs to be able to accommodate.
The versatility of spaces provided will be a parameter measured to assess the success of the shopping centre.
This new trend affects the compactness of the programme, aiming to save space, but also to intensify the sensory experiences. Whether this trend continues to change the morphology of the shopping centre remains to be seen, but future developments could result in retail shopping starting to resemble exhibition spaces or theatre stages.
There is no question that footfalls in some malls have been impacted since the advent of online shopping portals, which are able to offer the merchandise to the consumers at their doorsteps. But, has this stopped the consumers from walking into malls? Not really. Will the shopping centres shut down? Again, not really. Then what? I believe that shopping centres are are at an inflexion point for the consumers, hence malls of the future will have to be re-invented, rather than following the predictable way of developing them as being shopping-centric.
Malls will now have to offer the consumer much more beyond shopping. No longer are consumers primarily visiting a mall for retail. Today, consumers are expecting that malls should be able to offer options beyond shopping, as shopping is now done on their palms, thanks to e-commerce and m-commerce.
I believe Indian malls are more impacted by this scenario than their international counterparts, as the online business in India is growing at a very fast pace. While we are not sure how long this trend will continue, mall developers are sprucing up their properties to offer a complete experience to customers. Gone are the days when a developer would sleep over such trends; today, malls also have stiff competition from within the industry itself. Also, it must be noted that the digital transformation of retail is not all bad news for malls. On the contrary, it presents new opportunities for shopping centres to engage consumers throughout their decision journeys.
Eight ‘E’s & More…
To ensure that malls are not left behind in this retail shift, developers have no choice but to create more reasons for consumers to come to their centres. Boosting overall experience and engagement activities may lead to repeat visits. Malls developers who can read the current trends and also envisage the future will have to gear up in the interest of their assets.
Shopping centres of the future will have to be planned much beyond shopping; they have to be epicentres of Entertainment, Enjoyment, Experience, Engagement, Experiment, Enthralling, Eatertainment, and Edutainment. Malls of the future will have to offer the consumers all-inclusive experiences and should be able to engage them for over four to six hours at a time.
In order for this to happen, the category mix will have to change dramatically. Previously, most malls were 70 per cent retail and 30 per cent F&B and Entertainment. This ratio will now have to be reversed with allocation of higher space to F&B, Entertainment, and Amusement.
The other key element, which will have to change in the retail real estate business, is the size of properties. If the offerings of a mall have to change, the first impact would be on the size. Gone are the days when one could get away with a tiny, one or two lakh sq.ft. mall. Now, anything below a million sq. ft. in metros and about half a million sq. ft. in Tier I towns would be treacherous. The size has to be changed to accommodate the new experience points for the consumers.
Malls of the Future
Malls of the future will have to be technology-friendly, which will help developers to transform mall usability as a means of improving customer satisfaction. Currently, there is ample opportunity for malls to decrease customer pain points, while simultaneously creating entirely new delight points.
Technology, for instance, can be used to address one of the biggest challenges shoppers face at shopping centres – finding parking. Sensors located in parking lots can detect the number of spots available on each level and give visual indicators to drivers. Once within the mall, mobile apps can offer quick, easy guides to help shoppers find what they’re looking for at large and multi-level centres.
The shopping centre cannot anymore be treated as a mere real estate project; it will have to be taken seriously as an asset class and a retail business, with greater involvement of developers. Retailers, on their part, will also have to evolve beyond merchandise and offer consumers stunning in-store experiences.
The world of shopping is changing rapidly, but a shopping centre can become a community centre for both urban and rural consumers. Developers can seize the current opportunity and alter their approach to this asset class, and re-invent or re-orient their projects in such a manner that they remain sustainable, regardless of current or future disruptions in consumer behaviour. Size, offering and technology would be the key ingredients in creating the successful -shopping centre of the future.