The big talking point at this year’s Mapic fair was how digital retail can help ensure the survival of physical shops.
Omnichannel retail and internationalisation were the key themes at the 19th edition of global retail property trade show Mapic, which was held in Cannes from November 13 to 15.
Attendees packed the aisles at the seafront Palais des Festivals venue, with the retail property developers and agents who exhibited reporting a more upbeat mood compared with the previous year, and “more serious conversations, people prepared to do business, and deals being done”, according to one.
Show organisers reported that about 8,300 delegates attended from 70 countries, and of the 2,400 retailers present, 400 were visiting for the first time.
However, topping the agenda were two of the key themes currently gripping UK retail - how to best manage store estates in an omnichannel trading environment and the opportunities and challenges presented by potential overseas expansion.
A survey of 10,000 consumers from across Europe by property firm CBRE found that 40% of 16 to 65-year-olds shop online, and that two thirds research products on the internet before visiting physical stores. The research also found that younger consumers - often considered more digitally focused - still want to touch and feel products and that 86% of them still see the bricks-and-mortar store as an integral part of the shopping experience.
At Jones Lang Lasalle’s panel session Redefining Retail Places, the global real estate firm’s head of research James Brown said: “It is clear that while retail markets globally are at different stages of evolution, there are a number of common forces that are reshaping retail across the world. They are population growth and urbanisation, multispeed economic growth, ecommerce and technology, inflation and detailed analytics.
“How we respond to those trends will differ by country, by city and by retail place, but we will need to be prepared to adapt to further change as it arises.”
Addressing the trends towards both digital and internationalisation, Debenhams international director Francis McAuley said businesses need to be comfortable in their home market and online before tackling global expansion.
He added that with a relatively small portfolio of 167 stores, which all “make money”, it is easier for Debenhams to update its portfolio than for those with more stores. “Our stores are becoming more important as our ecommerce business grows. Some weeks we are taking 30% of sales on ecommerce that are being picked up in store.
“There may be fewer people going to the malls and to the high street, but if you are bringing people back into your location, then it us up to you to convert those people into customers.”
Click-and-collect is becoming increasingly important to Debenhams and McAuley said the retailer has seen an 11-fold increase in the number of parcels collected in store compared with this time last year, with the additional spend by those customers coming into store tripling during the same period.
However, one of the real challenges facing the high street is price matching. “The way to get past that is to create your own brand. Our Designers at Debenhams range is only sold in our stores, so therefore you can’t price match it. And I believe more retailers have to do their own product,” said McAuley.
Peter Williams, non-executive director at etailer Asos, said that in order for retailers to compete in an omnichannel environment they need to employ younger people: “They are less risk-averse and will try new things, and from that comes new ideas.”
However, McAuley added a cautionary note and said that online is not the panacea to UK retail, and that while the channel continues to perform strongly, growth is plateauing. He added that future growth will come from international expansion via stores and a web presence in those countries.
Williams summarised on a positive note, saying he is “optimistic about the future of bricks-and-mortar retailing”.
He said: “I think it’s going to change and the internet is affecting that, but people still want to go out shopping. It is a social event and they are interested in seeing what’s new. So there may be fewer [shopping locations] and they may be more concentrated and more ‘showroomy’ than they used to be, but they will still be there and an important part of consumers’ time.”
He also stressed the importance of creating entertaining and theatrical experiences for customers. “The ultimate message is that people who own shopping centres or stores need to be in the entertainment business.”
Land Securities unveils Westgate and Buchanan Galleries developments
The Westgate Alliance - a joint venture between Land Securities and The Crown Estate - unveiled the 800,000 sq ft Oxford city centre Westgate development. Bert Martin, development director at Land Securities, told Drapers the project has already seen interest from domestic and international retailers keen to have a presence in the historic city. He said: “We think Westgate is the most anticipated scheme in the UK. Oxford is top of the list for many retailers in regards to property requirements.” The development will bring 100 retailers to the city, anchored by a full-line John Lewis department store, and with the city’s largest car park with 1,000 spaces. The development is due for completion in autumn 2017.
The Buchanan Partnership, a joint venture between Land Securities and Henderson Global Investors, also revealed the first views of its planned transformation of the Buchanan Galleries in Glasgow. When it is completed in 2017, the 1.2 million sq ft of retail and leisure space will house 100 shops, 25 restaurants and a multi-screen cinema. The development will be anchored by a new 150,000 sq ft Marks & Spencer and a 300,000 sq ft reconfigured John Lewis. The project will benefit from the city’s wider regeneration plans, which include upgrading the adjacent Queen Street station. Network Rail’s planned upgrade will allow shoppers and commuters to walk directly
into the centre from the station. Nick Davis, development director at Land Securities,
told Drapers that Glasgow’s status as the number one retail city outside London makes it an attractive prospect for fashion retailers.