We are seeing a huge shift in the behavior of consumers and what they want and expect from their shopping journey. They are looking for more authentic experiences and more meaningful ways to interact with their brands and hear about new products. The next generation of shoppers are looking for lifestyle centers, places that successfully fuse together all aspects of living into one place. These young, diverse and urban consumers want to interact with the very latest products and technologies through surprising experiences that push the boundaries to the limit
Online versus offline
Online versus offline shopping debate is no longer relevant today, Brick and mortar shopping malls will never go away. Over the past decade, malls have evolved incredibly. They are no longer places where we go simply to ‘’buy’’ a product but have become public meeting places, leisure and tourist attractions, dining destinations and central hubs for large and small communities. In fact, shopping malls have and will continue to bring people together, that human interaction is something can’t be purchased online
In this article, we explore some of the new trends that will continue to reshape the mall of the future
Local is the new black
With the over-distribution of many international brands and the desire for well-rooted, authentic shopping journey, more and more shopping malls’ developers are looking for ways to differentiate on unique experience
Some are creating a local-culture influenced spaces and journey, others deepening their commitments to nurture local brands, Designers and entrepreneurs as a source of competitive advantage and we will be seeing more innovation centers for curator and young designers as a new tenants in a shopping malls where they curate, display and sell in a direct contact with the curious customers who would buy the product along with the story of those designers
Digital and the loop of reinvention
Digital innovation will shape the future of shopping within the built environment.
The customer journey and experience within the mall will become smarter and more targeted to the individual requirements of consumers. It will also provide developers and brands with deep insights that will be used to help them improve the efficiency of their operations.
With the advancement of technology and data analytics science a new pillar of retail planning, design and operations has emerged. This gives us the capabilities to collect crucial data via multiple devices and channels, enabling us to analyze patterns, make predictions and implement at speed and scale to create economic value, increase business performance and efficiency, differentiate product offerings, and more importantly enhance the customer experience.
As technology continues to evolve quicker than we can comprehend, companies are becoming more focused on the digital and data landscape. The top performing firms are looking to upscale when it comes to the quality of their systems and usage of new technologies, with 54 percent of these companies looking to invest more in sensors during this year alone
Digital and brick and mortar will no longer live separately, but will feed off one another. Together they will create a united, more progressive model with the focus on how each can evolve and positively influence the change in the other
Experiential retail will flow from online to offline and back again, creating a loop of reinvention connecting many worlds, some of which may not be relevant to the retail environment at all
The Retail Mix
With the changing consumers’ demands and aspirations, the tenant mix is changing, the experiential retail categories like Entertainment, food and beverages, and services are growing, giving the consumers more reasons to visit the malls and spend more time and consequently spend more money
With the growth of these categories, new concepts have emerged, in the food area for example food halls started replacing the food courts, fast and premium casuals are on the rise, reflecting the modern lifestyle- the ideal for fast, quality food to be enjoyed in a fun, easy setting. Café courts,
An emphasis on fine dining and events is also helping to make malls the hub of the local community – a place to share quality time with friends and family, not just quick meal at the food court.
On the entertainment side, the Malls developers are behind the latest of theme parks, interactive and digital schemes, and multi-purpose theatres that are very flexible and can be programmed easily to accommodate a variety of activities from art exhibitions all the way to corporate events or concerts, cinema screens started becoming smaller and multi-sensory spaces with the 4D screens, Kids cinemas, and those who serve Michelin starred plates to your seat. The aim is to bring shopping, Dining and entertainment together in a truly integrated model during the day, the night and even outside malls operating hours
Also, some malls are making greater use of temporary, flexible spaces that can accommodate different stores over time, and reimagining public spaces as a canvas for Pop-up stores, events and entertainment refreshing the Mall, integrating the community experience into the public realm and surprising the customers with a sense of unexpected
The Mixed-Use development
Malls Developers are moving towards Mixed-use development, by integrating hotels, offices and residential areas around the mall in fully connected and human-scaled formats creating a true destination and multi-purpose development utilizing all the value and efficiency of cross-industries offer
The new capital, Human capital
Up until now, mall developers and operators have thought of themselves as real estate businesses and have structured their organizations and hired accordingly. Today, as malls develop digital and data strategies, integrate more customer experience, services and hospitality oriented amenities, create social and communications platforms and draw insights from huge amounts of customer data, new sets of skills will be needed from different industries and new approach to mall development business structure
On the other hand, Malls developers will need to create the right mechanism to ensure the knowledge and experience from their operating assets teams as front line of interactions with their two main customers categories (Tenants-Retailers- and consumers) have been implemented at the early stage of any Malls planning, to ensure relevancy and practicality
And many other trends
There is no doubt that mall operators are facing a challenging environment. But the winners will be able to transform these challenges into opportunities for growth
Shopping malls across the globe will need to innovate at pace across digital platforms, and the built environment combined, if they want to be disruptors of experiential retail
Hussam Raouf, Managing Director of Mont Hill, a Real Estate Advisory and Services Consultancy based in Dubai. With over 20 years of experience working for some of the most respected developers in the gulf region, including Emaar Properties and Majid Al Futtaim, Raouf is currently working with a number of international and local developers to share his expertise on a subjects that are becoming more and more controversial
Hussam.raouf@monthill.com
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