Internationalisation and the internet reshape retail
The ‘build it and they will come’ philosophy is long dead, says John Schroder, group executive and CEO Commercial Property at Stockland, as online shopping and changing consumer preferences reshape the retail sector.
Schroder (pictured), who will be moderating the ‘Big Retail Reveal’ session at The Property Congress in October, says “the rigour that we now apply to analysing and testing the data before we even consider turning the first sod on a new redevelopment or expansion is incredible.”
In the post-GFC world, Schroder says “investors now have a very understandable aversion to risk, and with all of the customer data that is available to us now, there is really no excuse for, and should no longer be any such thing as, ‘build it and (hope) they will come’.”
Understanding the customer and tailoring the shopping centre experience accordingly is critical.
“In Australia – and around the world – the trend is for shopping malls to become a village where everything customers need is available in one place,” Schroder explains, adding that the rise of ‘food culture’ and fast, casual dining is restyling the shopping centre experience.
Within its $1.2 billion pipeline of retail redevelopment projects, Stockland is currently undertaking a $222 million expansion of its shopping centre at Wetherill Park in western Sydney. When customers were asked what they wanted from their new centre, the overwhelming response was “a place to celebrate life and culture”.
As a result, Stockland is building a new shopping centre anchored by fresh food and fast casual dining with a modern twist on laneway-style street food vendors and entertainment, as well as the first Jamie Oliver Ministry of Food training kitchen in the state.
“Great retail is about place-making. And it’s about creating great retail ‘theatre’ within our centres,” Schroder adds.
While Australians are increasingly shopping “on their mobile phones, tablets and computers – in that order”, retailers and landlords are “sitting in the driving seat” when it comes to integrating technology into the retail decision-making and buying process.
Schroder refers to a recent article in Business Spectator, in which Vaughan Rowsell, CEO of the world’s leading retail point of sale software, Vend, explained that consumers were using multiple channels and devices simultaneously or even interchangeably throughout their “shopping journeys”.
“It’s not uncommon for a customer to research products online, compare prices on their phone or tablet, test out the merchandise in person, and eventually complete the purchase on the store’s website or in a brick-and-mortar location. The key is hitting all those channels and connecting them with the customer, so the customer has a smooth experience,” Rowsell said.
The internet has also created a global market place in which international brand managers can see and track global product sales by category and by geography.
“To encourage and support international retailers’ respective business cases for brand migration, shopping centre owners are only too willing to open their books and share their own big data on retail trends, trade catchment areas and consumer spending,” Schroder explains.
Schroder says technology enables retailers to “mine and analyse customer data to land the right store, with the right footprint, in the right location.”
Around 70 per cent of the world’s retail chains are investing in new stores in 2015 – a rousing endorsement of the strength of bricks-and-mortar retail.
This list of international brands that are relative newcomers to Australian shores includes Apple, Top Shop, Zara, Nike, Daiso, Williams-Sonoma and Brooks Brothers, and Schroder says there will be many more to come.
“Brands such as H&M, Forever 21 and Zara Home, amongst many other mid-market and luxury brands, have started arriving in Australia, not just with one flagship store, but with multiple sites across our cities – and many of these brands are increasingly interested in establishing a presence in regional areas,” he explains.
This is great news from a commercial leasing perspective, “as the ‘internationalisation’ of our shopping centres is creating more competition, more choice, higher standards of products and services – all of which are great for the health and vitality of our retail shopping centres, and great news for customers.”
Don’t miss your chance to learn more about the ‘The Big Retail Reveal’, when The Property Congress presents John Schroder, along with Scentre Group CEO Peter Allen, ISPT CEO Daryl Browning and Mirvac group executive Susan MacDonald. Register today.