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OtherTue 22 Jan 13

The Future of Retail – Learning from Overseas Experience

It is clear that Australia’s retail economy is under pressure.

Note the following:

  • Overall household consumption spending has grown by a healthy 6% over last year, yet retail spending has grown at a modest rate of 3%.

  • On-line sales increased by 25%

  • The strength of the Aussie dollar is resulting in more overseas trips, and of course overseas retail purchases

  • A higher proportion of household spending is being directed to increasing utilities costs, education, health, fuel and recreational pursuits


So where is retail headed, and what can Australian retailers and shopping centre owners learn from overseas experiences?

As an industry leader in retail economics, market research, retail planning and valuations, Urbis is proud to have recently completed another annual Urbis Overseas Retail Study Tour. Once again it was an eye opener, and once again our delegates benefitted from instantly actionable insights.

The tour visited over 55 shopping centres across the developed world, including Los Angeles, San Francisco, Shanghai, Singapore, Hong Kong, Tokyo and Kuala Lumpur. What resulted was a wealth of knowledge from various markets, seen through the eyes of people looking from different perspectives, all of which gives us some guidance regarding possible future trends and opportunities within the Australian retail landscape.

Some of the key themes that emerged from the tour included:

  •  The increasing prevalence of successful major fashion brands at two ends of the spectrum, namely fast fashion and luxury, and their global expansion programs, will include Australia in the not too distant future.This signals pricing pressure for Australian fashion, increasing homogeneity, particularly in mainstream fashion; greater brand consciousness and presence; better in-store brand experiences (eg shopfronts, music, lighting, visual merchandising, perfume); constantly changing product; greater product innovation and a greater range and representation of luxury retailers.


  • The success of modern F&B offers in shopping centres throughout the USA and Asia – including the range of styles, cuisines, and dining environments created – suggests that dining, and the whole ‘theatre of food’ experience, especially when combined with other leisure and entertainment features, will be an important ‘string to the bow’ and a significant growth opportunity for Australian centres over the next few years.


  •  The time has come to welcome a new era of shopping – one that incorporates a higher bar in terms of customer experience. Say hello to a greater range of facilities, activities and events including visual intrigue; precincts for kids; public art; water features and water play; dog stations; gardens, landscaping and dwelling places; electric car recharging stations; crèches for dad’s, maybe even golf driving ranges; greater community links; designer mall furniture; climbing walls; significantly improved public amenities; great signage and iconography; and rapidly changing uses for new technologies such as digital media for advertising and inactive challenges. Other customer enhancements include free WiFi for centre, store and product advice; “Me-Ality” for size matching and fashion solutions; APPS such as ‘find my car’, and digital devices such as smart phones and ipads to eliminate time spent waiting in queues and for ensuring hands – on customer knowledge and rapid personal service.There is a gulf between Australia and much of the developed world when it comes to 

    . This must change and based on our observations in the USA and Asia, it comes down to two areas of focus for training: attitude and product knowledgeShopping centres will need to offer unique experiences, great personal service and social interaction that on-line channels will never be able to match.


  • The great centres overseas are those which unashamedly show off the retailers, and particularly the major brands. Architectural features are interesting but the next generation centres will be all about the retailer. We’re likely to see major changes to shopfront heights and widths, bulkhead treatments, mall & void widths, and therefore sightlines, both horizontally and vertically.In the on-line era, centres and stores are likely to place even more emphasis on fitout quality, the quality of shopfront presentation and signage, and visual merchandising. Abercrombie and Fitch, Hollister, Forever 21 and Uniqlo are examples of brands which have high impact shopfronts and fitouts.Other aspects of retail design that the Urbis Overseas Retail Study Tour group found particularly interesting included: the quality and prevalence of landscaping; use of small spaces; quality of kiosks; green walls and carpark screening; public art; mall furniture; and signage.


The retail landscape is ever changing and the next 5 years will be no different. In our overseas travels we have seen that in the on-line era there are many positive strategies that continue to result in solid growth prospects for shopping centres. By learning from some of these current international trends, Australian shopping centres and retailers can ensure they stay one step ahead and minimise the increasing prevalence and popularity of on-line shopping.

Going forward in the Australian context, therefore, especially with the $AUD opening up overseas opportunities, there will have to be a very strong focus by shopping centre owners and managers in Australia on the retailer, the quality of consumer environments, and anything and everything that enhances the shopping experience and therefore the value of centres as places to visit.

 

This article first appeared in the Urbis Think Tank. 


Urbis is an interdisciplinary consulting firm offering services in planning, design, property, social planning, economics and research. Working with clients on integrated or standalone assignments, Urbis provides the social research, analysis and advice upon which major social, commercial and environmental decisions are made. With over 300 staff Urbis is uniquely positioned to handle projects from the simplest to the most complex.

OtherRetailEducationInternationalAustraliaOpinion
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Article originally posted at: https://theurbandeveloper.com/articles/the-future-of-retail-learning-from-overseas-experience-urbis