A research report commissioned by centre:mk’s joint owners, Hermes Investment Management and AustralianSuper, has identified a series of key consumer trends that will have a significant impact on the future of retail and leisure destinations.
The Future Shopper report, researched and written by globally-renowned future foresight consultancy The Future Laboratory, reveals three key trends owners and managers of retail and leisure destinations must consider in order to survive and thrive in the decade ahead. Rather than threatening the future role of malls, however, each of the three trends represents an exciting opportunity.
According to the report, by 2025, a new breed of consumer will be using retail and leisure destinations across the globe. Their behaviour will be led by three trends that future retail destinations must embrace:
- Community Builders – consumers will go to malls in search of communal experiences where the purchasing of products goes hand-in-hand with social interactions to drive loyalty to retail destinations. Stores will become hubs of activity, with ‘rewards’ such as exclusive products, immersive experiences that enhance brand awareness, or lifestyle services which aim to provide simple solutions for busy modern lifestyles, encouraging participation with a like-minded community. Driving demand for retail Community Builders, 75% of Generation Z consumers already prefer stores that provide a memorable and encouraging offer, according to the report, with 50% of 20-year-olds searching for enhanced retail experiences from bricks-and-mortar spaces.
- Hero Hunters – future shoppers will place increasing emphasis on brands’ ethical behaviours. Last year, the Edelman Trust Barometer identified that 56% of consumers already regard ethical and open business practices as important in building belief in a brand. According to The Future Shopper report, this belief is set to grow substantially, and will shape the retailers, destinations and activities that the future shopper will wish to engage with. They will seek out localised, community-oriented spaces that give back, or brands that specifically employ and support people from local areas. Already, consumers are seeking brands whose values reflect their own, exemplified by the annual growth in ethical purchases in the UK, which is now valued at £38 billion, according to The Ethical Consumer Markets report 2016 published by Triodos Bank.
- Service Synergists – the third trend focuses on service, and the changing way in which it is perceived and valued by consumers. Shoppers will expect staff to be knowledgeable and enthusiastic collaborators in their purchasing experience. As The Future Shopper report highlights, 78% of shoppers regard sales staff with a detailed product knowledge and confidence with in-store technology as key in driving brand loyalty towards a retail destination. For retail and leisure destinations, this will mean employing emotionally intelligent, highly motivated, well paid ‘brand fans’ – individuals that are knowledgeable about the brands, stores and experiences available in a destination such as centre:mk. The retail, dining and leisure portfolio in malls must also need to reflect this service shift, evolving to include those brands that exemplify this evolving role of service and that strive to future-proof and develop the skills, and ultimately the role, of their employees.
Commenting on the trends, Kathryn Bishop, deputy foresight editor at The Future Laboratory, and author of The Future Shopper report, said: “Over the next ten years, a series of powerful new social, cultural and technological driving forces will reshape consumers’ expectations of retail and leisure destinations.Tomorrow’s consumers will seek a greater sense of belonging, which malls can facilitate, complete transparency from brands, and to have engaging experiences with staff. The smart destinations are those that recognise the changes are happening now and respond, rather than waiting, which will be too late.”
Chris Taylor, head of private markets, Hermes Investment Management, commented: “These profound lifestyle and technological changes affecting retail are structural, not cyclical, and therefore require landlords to embrace the changes and adapt their approach to responsible investment. These changes need to be accepted by all – landlords, retailers and consumers alike – otherwise we will stagnate. Scale is crucial though, in order to fully realise these trends. Hence why centre:mk is perfectly placed to capitalise on the findings of this report and while we continue to remain a committed investor in its future.”
Ed Sellick, asset manager of Hermes Investment Management commented on behalf of centre:mk’s joint owners, Hermes Investment Management and AustralianSuper, said: “This report reveals a number of fundamental shifts in consumer behaviour that are too significant to ignore. At centre:mk, we are embracing how consumers are changing and are adapting our own offering to ensure we remain relevant and compelling. Consequently, we are investing to enhance the experience we provide and the service our retailers offer through employee investment, ensuring that consumer expectations are consistently met and surpassed. We aim to work more closely than ever with our brands as collaboration will be the key to future success as a destination.”
Reflecting the findings in The Future Shopper report, Hermes Investment Management and AustralianSuper are currently implementing the ‘Re-imagining an Icon’ strategy, investing over £50 million in centre:mk’s offer, environment and experience. The initiatives include: creating Sunset Walk, a premium shopping destination within centre:mk; building a new multi-storey carpark adjacent to John Lewis; delivering a brand new guest services facility on Deer Walk; and implementing comprehensive world-class customer service training across the centre:mk team.