RETAIL FUTURES: EXPLORING THE IMPACT OF MACRO TRENDS AND DISRUPTORS
But first, here’s a little bit about me…
KEY EXPERIENCE
architecture degree
- understanding spatial design, aesthetics and the built environment
retail
learning the business of retail through store management, operations, store design customer experience and strategic planning with top team
future trends
- identifying significant consumer, digital, technological, socio-economic and market trends and developing clear, actionable business implications
fashion blog
- combining a passion for fashion with writing, design and future-thinking to build a business in a highly competitive new industry
OVERVIEW
CHALLENGES
DISRUPTORS
THE THISTLES
WAYS OF WORKING
RETAIL REAL ESTATE CHALLENGES
ASI INVESTMENT EXPOSURE
High volume of real estate ownership with declining rental revenues and restrictive, outmoded lease agreements.
UK MARKET
The Guardian, Jan 9, 2020
OPPORTUNISTS CIRCLING
CONTINUED RISE OF E- ME- AND SOCIAL-COMMERCE
TRUST
range
CONVENIENCE
RELEVANCE
INSTAGRAM SHOPPABLE TAGS
SWIPE UP TO SHOP INSTAGRAM STORIES
“ME-COMMERCE” - earn money from sharing your style
21 BUTTONS
BROWZZIN
RISING CONSUMER DEMANDS
33%
want clothes that reward them with discounts each time they wear them
56%
frustrated BY
INCONSISTEN
T AND INACCURATE
ONLINE RECOMMENDATIONS
*‘Westfield How We Shop: The Next Decade’
DIGITAL BRICKS
47%
OF SHOPPERS WANT NETFLIX STORES
33% WANT SPOTIFY SHOPS - THE RISE OF STREAMING STORES
45%
OF SHOPPERS HAPPY TO BUY OR RECEIVE GOODS LATER
LICENCE TO BE MORE EXPERIMENTAL IN-STORE
FORWARD-THINKING - DROPIT
ENABLING SHOPPING AS A DAY OUT
SHOP | THEATRE | DINNER | DRINKS | DANCING
Target tourists and locals with incentives:
“Walk to the shops, we’ll Dropit’ for you”
KEY TRENDS & DISRUPTORS
EXPERIENCE
TECH ENABLERS
SUSTAINABILITY
MILLENNIAL MOTIVATIONS
SHIFT TOWARDS EXPERIENTIAL CONSUMERISM
(from traditional product consumption)
73% of UK consumers
SAY THEY would spend more time and money in stores that offer experiences as well as JUST products*
*Source: RetailEXPO ‘ONE VISION: How to re-energise retail in 2019 and beyond’ report, May 2019 amongst 2,000 UK consumers.
“We are not working to spend our money on things. We are looking to buy convenience, peace of mind and enjoyment. We are looking to experience life.”
SHOWFIELDS, NOHO, NYC
Showfields (above) offers “an immersive theatre experience that bridges art and retail.”
Showfields opened as a retail-meets-gallery space in late 2018, with a mission to “engage and inspire your sense of discovery through revolving experiences with the brands and communities shaping our future.” The 14,707-square-foot, next-generation department store offers independent and online brands—among them Boodles Gin and Nuria Beauty—a backdrop against which to showcase their wares, for a monthly subscription fee.
THE REC ROOM, CANADA
The Rec Room, Canada (above) combines arcade and immersive gaming with traditional food and beverage retailing, all in one space.
Hudson Yards, Midtown, Manhattan | $25 billion Hudson Yards development offers a mix of culture, art, and commerce, designed around a sculptural centrepiece call “The Vessel”.
Rock Up, various UK shopping mall locations
When Neiman Marcus opened at Hudson Yards (above left) in March 2019, the store’s CEO Geoffroy van Raemdonck told Forbes: “The reason (to come) is not to say ‘what I’m going to buy’ but ‘what I am going to experience.’” The store’s services span an in-house aesthetician, a shoe-shine and cobbler, as well as embroidery, hand-painting, and laser-printing services for garments.
“74% of Americans say they value experiences over products”
TECH ENABLERS
5G | HERALDING THE INTERNET OF EVERYTHING
“I normally refer to 5G as the ‘special’ generation, because it should not be compared with 4G or 3G...”
SMARTER CITIES… FINALLY
Smart Cities will finally be realised with the advent of 5G
5G is designed for mass connectivity (not for mobile communication primarily).
It will have the transformative capability to connect not just people but things - one million devices per square kilometre, if targets are achieved. Everything will become digitised and more connected - from our roads to our factories, homes, offices and cities - enabled by thousands of data-collecting sensors.
Reduced latency is another step-change that will be delivered by 5G. This means the delay between a command being given and the relative response being received will be virtually negligible (currently 40 milliseconds with 4G). This offers clear benefits in terms of controlling robots, drones, and of course, driverless cars.
VOLVO’S 5G WHIZZ
Our cars will become a “third space” between home and office with 5G-enabled connectivity
The “Passenger Economy” - 5G enabled office-cum-bedroom with implications for real estate, travel and leisure.
HYUNDAI UNVEILED ITS SMART MOBILITY SOLUTION AT CES, JANUARY 2020
The concept includes Urban Air Mobility (flying vehicles in collaboration with Über), Purpose Built Vehicles (personalised smart cars), and Hub (a space that connects the two, where people can come together to interact, creating “new innovative communities”).
TOYOTA ANNOUNCES A CITY INSTEAD OF A CAR!
Infrastructure
For 5G to effectively ‘smarten’ our cities, small cells will need to be attached to buildings or street furniture within the fabric of the city.
Could this provide an opportunity for private landlords to get involved in the roll out of 5G infrastructure and, potentially, profit from its deployment in the spheres of electric vehicle charging, digital advertising and Wi-Fi?
Industry 4.0
The fourth industrial revolution - is being ushered in with the help of 5G, sensors and AI. Trials are already underway to test the effectiveness of ‘preventative maintenance’ in driving productivity in UK factories.
TRULY PERSONALISED, SENTIENT SPACES
As we all become more accepting of the ‘filter bubble’ within which we exist online, the maturing of facial recognition technology is bringing a truly personalised experience to the real world. Many of the most prescient examples of this are playing out in Asia.
UK-based adtech firm, Bidooh, deployed 10k facial recognition billboards across South Korea to generate targeted advertising, based on the age and gender of passersby (below, top left)
Singapore’s new six-storey Funan Mall (above left) will utilise video analytics and facial recognition to study shopper traffic and crowd density, which will help CapitaLand to adjust tenant mix and placement.
BLOCKCHAIN
“a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network”
“Tokenisation”:
the process of ‘tokenising’ real estate: breaking down ownership of real-world assets into tokens, or digital securities, which run on a blockchain.
Could this offer a fresh approach to real estate investment?
The prospects for growth are certainly bound by the regulators, but it is encouraging to see new methods of ownership – such as the IPSX commercial real estate exchange – meeting regulatory approval in the UK.
From SMAC to DARQ
According to Accenture’s Tech Vision 2019
SUSTAINABILITY
From the backlash against ‘fast fashion’ to the ‘Extinction Rebellion’ of last Spring, there’s no doubt that sustainability is very much back on the consumer’s ever-increasing list of demands. It’s no longer enough to offer an eco-line of shapeless, fair-trade cotton basics, the customer of today wants fairness and climate kindness credentials baked in to a brand’s very ethos. And that’s if the customer is even in the market to buy new…
Restoration
We’ve all been trying to reduce, reuse and recycle for almost 50 years, but how many of us are restoring?
Founded in 2015, The Restory is now the fashion industry’s go-to place for specialist shoes and accessory restoration. Less than 5% of shoes produced each year are recycled.
The Repair Shop, is a BBC 1 afternoon show that is “an antidote to throwaway culture”.
It aims to shine a light on the wonderful treasures to be found in homes across the country and uses specialist artisans to bring these back to life for their owners.
Fabric Recycling
As individual retailers attempt to encourage customers to recycle discarded garments, isn’t it time for a specialist to take over the burden, in a centralised location that’s right there, where customers are? The shopping mall! Perhaps they could even experience the processes involved!
Worn Again Technologies (left) has found a way to recycle polyester that could revolutionise the industry.
H&M and French, luxury goods group, Kering, are both investors in the company and its R&D arm.
Urban Hanging Gardens
As urban spaces become denser and more populated, it's more important than ever that green spaces are considered in the planning of our cities.
Sovraparco - Elevated Park - is a proposed design by Italian architecture firms LAD and Hypnos Studios for an urban garden in the centre of Milan, surrounded by fast-moving traffic, and sitting atop one of the city’s major metro hubs.
The proposed hanging garden offers uninterrupted views of the sky from within, cocooning and isolating visitors from the city traffic, noise and chaos.
Could retail landlords play a part in reimagining their buildings and repurposing their urban spaces to this end?
MILLENIAL MOTIVATIONS
Co-Working and Living
Young people love to collaborate. Whether by accident or design, connecting with other people enriches their lives both professionally and socially and in their chosen communities. Collaboration is a proven path to creativity. From its beginnings, in the form of open plan offices, to the co-working spaces we see proliferating our cities for freelancers, the ‘sharing economy’ is impacting urban property.
Co-working was responsible for 9.9% of office take-up in Europe in 2018, led by global brand, We Work (above). Now, traditional landlords, such as British Land and The Crown Estate in the UK, and Tishman Speyer in the US, have launched their own co-working brands.
This concept is extending into domestic arrangements too. Co-living is becoming a housing option of choice for millennials in large cities, as they can live in a community and socialise and exchange ideas with like-minded people. Brands in this space include The Collective in the UK, Common, WeLive and Roam in the US, and You+ and Harbour in China.
Top 5 Countries for Co-Living Spaces | Source: Getkin.io
Overarching these behaviours is the CORE MILLENNIAL VALUE OF FLEXIBILITY
This will drive the idea of ‘space as a service’, where landlords will have to work harder to keep tenants and will be compelled to modernise their management practices and shorten lease terms.
Generation Rent
Young people crave experiences over material goods. This is partly driven by necessity - as the housing ladder becomes increasingly out of reach - and by a deep-rooted mistrust of commitment and ‘big business’ caused by the financial crisis they witnessed in their infancy.
Nomad House provides houses around the world for nomads to live in and work together
For them, to borrow or share is a more efficient and environmentally friendly option. Airbnb is a good example. Some are treating the service as quasi-residential, renting in different cities for three or six months.
Co-living/co-working concepts targeting mobile professionals, such as Outsite and Nomad House, are also responding to the needs of ‘digital nomads’: young, adaptable people who avoid traditional leasing and ownership arrangements.
CAR SHARING over CAR OWNERSHIP
Über, Lyft, Bolt, Zipcar
Urban parking lots become ripe for redevelopment:
Co-living spaces for millennials
Vertical farms providing greenery and local, urban food
Last-mile delivery hubs
Green in the Genes
Young people have grown up understanding the threat that climate change poses to our very existence on earth. Many are terrified for the future and have even pledged not to procreate in an effort to minimise global warming and because, frankly, they fear for the future of the planet.
Millennial consumers are prepared to buy into big brand products that they see as purpose-driven, such as Dove, with its body-positive attitude, or Ben & Jerry’s, with its focus on social justice in business.
A day out at the thistles, stirling
feedback and recommendations
approach
amentities
Tenant mix
community
retail theatre
digital integration
APPROACH AND SIGNAGE
AMENITIES, APPEARANCE AND ATMOSPHERE
Naturally lit, warm, good bathroom facilities in multiple locations, safe (but not free) parking.
AWARD-WINNING SUSTAINABILITY
ECO-OPPORTUNITY
Shampoo & conditioner refill station
Partner with Boots or Superdrug - or both!
Fail fast and learn
Roll out across retail assets
From the 23rd of March until the 14th of April 2019, Unilever Philippines installed its temporary ‘All Things Hair Refillery’ shampoo and conditioner refill station (above) in a bid to help reduce single-use plastic.
TENANT MIX OPPORTUNITIES
Local & Independent
Experiential & Educational
Factory / Meet the Maker
Photography Studio
COMMUNITY
The Snug
communal opportunities
“Dress” The Snug for fashion presentations, business breakfasts, art shows, gaming nights, tech talks, open mics for local bands, poets, comics… Partner with local bar for food, drink and expertise
Educate & Inspire: collaborate with Stirling University to showcase students’ work, practice public speaking/presenting
DIGITAL INTEGRATION OPPORTUNITIES
Loyalty app using digital currency, linked to navigation, discounts and personalised offers
Last mile delivery hub / lockers
RETAIL THEATRE
The Thieves Pot
theatrical opportunities
Events, Launches, Exclusives
Improved signage!
Whyte & Mackay celebrates is Clydebuilt roots by launching the world's first pub on a 150ft crane, named The Lion's Clyde (above) in 2014.
WAYS OF WORKING
MONTHLY BLOG
COLLABORATIVE WORKSHOPS
QUARTERLY NEWSLETTERS
WORLDWIDE WEBINARS
Manifestations of Changing Retail Spaces | Intu Watford
Everything is Instagrammable!
Communal Fun in an Indoor/Outdoor Space
Big screen sporting events, live gigs with catering from in-situ units such as Yo Sushi, and a pausing/play space for the weary shopper. For the more energetic, table tennis is on offer along with a branch of Rock Up, an indoor rock climbing venue.
Civic Pride
Celeb culture on display in an attempt, perhaps, to generate pride in the town’s local heroes and challenge its youth to aim high.
Building Anticipation
Empty units adorned with launch dates and information to inspire return visitors and recruit local retail teams.
The Florist | Most Instagrammable Place in Town
Wow Factor
Click above to experience the wow factor, as diners enter the restaurant.
The Bar
The Terraces
A generous, uncovered terrace, with a ‘no smoking’ policy, lets diners and drinkers enjoy south-facing sunshine in a clean air environment overlooking Watford High St. A second terrace to the side has an optional shade for rainy days and can be used for private parties, brand launches and functions, with mobile bar and a mix of high top and dining tables.