Food and drinks outlets have become as important as international fashion shops in shopping centres.
Australian based retail expert, Suzee Brain, said the future of retailing will be driven by increased social connections and unique experiences.
“Food, along with international fashion is one of the glimmers continuing to build growth in the retail sector.”
Brain’s message to the 400-strong audience at the New Zealand Council of Shopping Centres 2017 Retail Conference was similar to sentiments recently expressed by the chairman of Kiwi Property Group, at the company’s annual meeting.
* New Zealand’s saddest malls
* Languishing malls must develop or die, say retail experts
Dr Sean Sands from Monash University in Melbourne said shopping centre owners and managers needed to straddle online selling as well as bricks and mortar outlets.
“We want the excitement of the experience. Retailers are in the perfect place to capture consumers’ time outside of work. The question is how do you get people to stay and then how do you make sales out of that?
“We are moving from selling commodities to experience … There is also a focus on educating the customer about the origin of the product to create a more diverse and engaged experience.”
The message appears to be one that Kiwi Property Group is already aware of – it owns Sylvia Park in Auckland which is being expanded, Northlands in Christchurch, and half The Base in Hamilton.
KPG chairman Mark Ford told a recent annual meeting that his company identified many years ago the threat that online retailing presented.
“…which is why we focus on the experiential nature of shopping centres. We create great experiences that can’t be replicated in an online environment – such as contemporary urban dining and entertainment, simple things like personal services – and by focussing on retailers who create in-store experiences.”
Ford said KPG had enjoyed a significant increase in sales productivity by progressively reducing the amount of floorspace allocated to specialty fashion, and by increasing floorspace allocated to more experiential categories such as dining and services.
The retail categories with the strongest positive performances were pharmacy and wellbeing, commercial services, food, and lastly, fashion.
“We can positively drive sales performance by focusing on dining, entertainment, personal services and overall by securing the very best retailers including retailers new to our market,” Ford said.
Meanwhile, New York-based retail consultant Howard Saunders from Twenty Second & Fifth told the shopping centre conference that food and beverage will “kick start” shopping centres.
“Only one retailer can be the cheapest. For everyone else there is experience,” Sands said.
“There has been an absolute revolution. Social spaces and premium food halls are on the rise, so are brand playgrounds selling more than just the product.”
Retailers needed to work out how to bring customers back, Saunders said.
He was drawing on his experience of a wave of US shopping centre closures, which analysts in this country have discounted as a serious prospect in New Zealand because the US was significantly over-shopped by comparison.