The reinvention of retail

The reinvention of retailDespite being ‘written off’, the retail sector is reinventing itself, said ISPT’s chief executive officer Daryl Browning at Property Congress last week.The “old days of whacking a couple of boxes at each end and creating a shooting gallery that tries to part the consumer from their money is gone”, Browning told the audience of 700 property professionals.Today’s customer is “much more sophisticated and discerning.”According to Scentre Group’s CEO, Peter Allen, 93 per cent of retail sales still take place in physical stores – but customers do their research online and make far fewer impulse purchases than in the past.”Paradoxically, this makes customer service more important than ever,” he said.”In the face of all this technology, the physical still matters.” But retailers needed to make sure that shopping centres were “places people want to spend time in”.”The whole retailing focus 10 years ago was on fashion. Today, the Australian household spends the same amount on eating out as on fashion,” Allen said – which is why Westfield has introduced more food halls into its centres, as well as health and childcare services.”Shopping centres must be part of the ecosystem of a family’s life – it’s the town centre of old,” Allen added.Susan MacDonald, Mirvac’s group executive for retail, agreed that “food is the new fashion” and said she’d “take a shopping centre with a strong food court” over a centre anchored by a department store “any day”.”We’ve got a 47 per cent Asian demographic at Rhodes [in Sydney] and we have remixed the centre – doubling the food and beverage outlets and creating a night-time economy without expanding the GLA,” she said. The result is a “vertical, dense, social community”.”Shopping centres were internal boxes 30 years ago – now we are focused on how to break open those older retail centres and create a high street feel at your front door,” MacDonald said, pointing to wedding chapels and centre courts able to host large concerts as examples of this thinking in action.As people embrace “momentary not monetary lifestyles,” MacDonald says the definition of good retail no longer rests with the department store of 8000 GLA.ISPT is investing in digital technologies, and Browning says the easiest of those is Wi-Fi. “Other investments are very expensive,” he explains.Peter Allen agreed that “Wi-Fi is like having a restroom in a centre – it’s a service we have to provide.”Allen’s secret to investment in technology was to “learn to fail fast” and “adapt really quickly”.Browning is convinced that the world of retailing has changed and “will continue to change”.”Some of [this change] will be faster than expected, but some will be much slower.”Regardless of the pace of change the “physical retail format has an exciting future,” Browning said.