As the retail sector grows tougher, smaller businesses play a vital role in differentiating shopping experiences. Thus, property investors, landlords and shopping centre management companies need to develop cooperative relationships and take responsibility for nurturing and growing these small businesses.
A consumer-centric shopping experience
Retail Network Services (RNS) managing director, Gavin Tagg, points out that, in order to survive, shopping centres and retailers needed to create a whole new consumer-centric shopping experience. RNS conceptualises, raises capital and ultimately develops shopping centres in strategic locations.
Tagg suggests that it is time to spend less time policing shopping centres and more time collaborating with tenants. “We have to create a platform in which our retailers can trade to the best of their abilities. We should engage with them and assist through training, education and sharing of ideas,” he says.
The latest research on retail suggests that a complete about-turn will see the consumer of the future demanding a far more personalised approach and more individual attention. But this paradigm shift clashes with recent reactionary cut-backs by retailers that have been negatively impacted by poor economic conditions.
Budget cuts, low economic growth and diminishing bottom line returns have seen retailers and shopping centre owners water down their offerings. This has taken the heart and soul out of retail, leaving many shopping centres and retailers feeling impersonal and boring, says Tagg.
An evolving consumer
Speaking ahead of this month’s annual South African Council of Shopping Centres Congress in Cape Town this week, Tagg said that the event theme ‘evolve’ was particularly important as South African retail finds itself at an important crossroad.
He notes that the consumer has evolved at a faster pace than retailers and shopping centres. Financial constraints on owners and retailers mean that they take considerable amounts of time to get to market.
Where retailers and shopping centre owners had gone the extra mile and understood and responded to what their consumers wanted, they had seen growth in sales and support that was way above market averages.
“Today’s consumer is demanding. Their mantra is ‘it’s all about me’ and they are wanting the experience, wanting to be entertained, appreciated and respected. We need to create a simple and enjoyable experience for these consumers. Most of all, we need to make it personal,” says Tagg.
Smaller retailers, in particular, need extra support. At the end of the day, they are the ones most likely to provide the sought-after personalised shopping experience that modern-day consumers are seeking.
“We should not burden them with high rentals and poor shopping centre locations or even with long-term leases. Instead, we must provide flexible retail space that can be adapted and changed to suit market demands in an instant,” he advises.
Reflecting the consumers’ needs and wants
The one thing that hasn’t changed is the need to identify a tenant mix that reflects consumers’ needs and wants. But, at the same time, these tenants need to reflect the centre’s common values and add to its overall appeal rather than detracting from it.
“It’s time to find a balance between the longer-term leases of yesteryear and the medium- and shorter-term leases that provide the flexibility to respond to customer demand. This will enable us to create dynamic new shopping environments and re-invent existing centres, keeping them relevant and on-trend,” adds Tagg.
Top tips for retail tenant survival
While, according to StatsSA, retail sales in SA have increased somewhat recently, pressure remains on consumers’ discretionary income…
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Changes specific to the consumer are just as important and could be something as small as providing proper seating and creating softer spaces that encourage meeting and mingling.
“We can make parking bays wider to accommodate today’s much bigger cars and spacious, more pleasant restrooms. We can make sure that trading hours mirror the needs of a mall’s community rather than merely reflecting the average 8-to-5 business day. Commuter transport, too, is important, this should be carefully planned and not just an after-thought. Consumers want spaces where they can be dropped off and collected, where they feel safe and secure.
“These are just some thoughts and ideas on how to attract the consumer in this current market and, with trends evolving as we speak, we need to keep it real, authentic and fun,” Tagg concludes.