danzine_NewRetail

INTERVIEW
INTERVIEW
more wow,
less boring
DAN PEARLMAN — THE NEW RETAIL EXPERIENCE
MATHIAS SANDER
DIRECTOR LEASING STRATEGY &
BRAND COOPERATION
DAN PEARLMAN
BRAND ARCHITECTURE
Shopping center: Honey, we forgot
the customer.
The shopping center boom is over.
With a good 480 objects the peak has
been reached. The magic 500 mark
will probably not be surpassed. With
the end of the boom, the consolidation
begins and with that the competition
between the locations, which - this
seems almost certain - not all centers
will survive. Retail will not die but we
definitely have too much sales space.
Rising vacancy rates, falling demand
for space - the horror scenario of landlords
has long been reality.
Radical rethinking
The industry keeps has to radically
rethink its concepts. Frequencies and
revenues no longer come by themselves.
Today, simply being a shopping
center is not enough. Those who
cannot oppose the online purchase
with any arguments or experience will
have to get used to significantly lower
customer numbers. Any center investor
still hoping to collect secure returns
without significant investments
in tenant mix, quality of stay and services
is subject to a dangerous fallacy.
And with a bit of digitalization and additional
café bars nothing will change.
Centers are not special enough
Complex problems cannot be solved
with simple recipes. Frequency shrinkage,
the crisis in mainstream- fashionconcepts,
rental models and contract
terms are under pressure. The magic
potion formula for the branch mix no
longer works. Many yield-optimized
centers of the 2000s lack identity,
ideas and inspiration. Many centers
from the 90s are outdated. Why enter
a shopping center when the atmosphere
does not spontaneously delight
the visitor? When there is no feeling of
self-reward because the place is not
special enough?
Love withdrawal for shopping
centers
For over 20 years, shopping centers
have been the most successful form
of retail distribution. However, current
developments in the retail sector and
changes in user behavior are jeopardizing
their robust, rental-based business
model. Today, rent levels are so
high that profitable investments are
unthinkable. Real estate funds, that
want to promise their investors secure
returns year after year are increasingly
withdrawing from pure retail properties.
Shopping centers suffer from
withdrawal of love. Residential and
commercial properties are currently
enticing with the higher dowry. The
long-term cash cows urgently need
to be returned to pasture so that they
can survive in the long term. Fresh
ideas are needed.
A new understanding of roles
This requires more than new seating,
Primark, an app and a new facade.
What is needed is a mental restart, a
long-term strategy, a clear positioning
and often a different understanding
of the role of the centers at the
location. The harmonious integration
into surrounding structures, long demanded
by cities, must finally be improved.
Centers have to act at eye
level with neighbouring uses. Medical
centers, social and family offers, daily
leisure and community should not be
understood as a necessary evil and a
filler of space, but as valuable puzzle
pieces that make the location worth
visiting for customers again and again.
Centers must finally become brands
and tell an authentic story. They must
be internally consistent products that
convey the same values to all stakeholders.
More “Wow!”
Centers must expand their range
of services and create added value.
Perhaps even break away from department
store architecture. The
re-equipping of rest areas, as is
happening everywhere in shopping
centers right now, is just a drop in
the ocean. Doesn’t a center rather
need the possibility to change significant
mall areas flexibly and quickly?
Doesn’t the fast-moving retail sector
need more stage construction, more
staging, more “WOW” to create a relevant
third place?
Investors demanded
Investors are in demand now. Selling
is increasingly becoming a worse option;
the market will continue to be
flooded with overvalued properties
and the center locations are generally
good and capable of development.
Dissolve your reserves and lead your
objects into a successful future.
Customer loyalty as a success factor
Many centers have a very high proportion
of regular customers, often
more than two thirds of all visitors.
Customers who are second and third
generation shopping in the same center,
who do not want to reorient themselves
at all, but will do so if the supply
in the center continues to deteriorate.
The operators must finally recognize
that customer loyalty is of paramount
importance in the competitive, shrinking
stationary retail sector. It is worth
looking at how loyalty works on platforms
such as Instagram, Snapchat or
Fortnite now and translating them to
stationary retail so that generations
who can no longer be activated via
voucher programmes can spend their
free time there.
DAN PEARLMAN — THE NEW RETAIL EXPERIENCE
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