For anyone of a certain vintage “Unforgettable” is a soft jazz classic. But these days in the ever-changing world of retail, the buzz word is “Instagram-able.”
You name it – everywhere in retail, the aim of the game is to attract Millennials and Gen Z by showcasing experiences curated for a market of one that can be relayed to their online community via Instagram.
This rush to embrace the Millennial-driven experiential revolution is affecting everything to do with retail – from mall layout to refurbishment, from removing car park spaces to nuking traditional anchor tenants, from embracing rooftop hot tub cinemas to selfie factories that guarantee priceless selfies in bespoke and outrageous situations.
It is the only real antidote to the disturbing news published by the BBC recently that 200 UK shopping centres are in danger of closing. The article talks about the demise of anchor tenants, the need to build ‘experience’ into aging malls in order to revitalise them and the fact that the UK is following the US in having too many dysfunctional shopping centres.
This update on the fast-changing world of retail was unveiled at a two-day event in Malaysia that Madano moderated. It was organised by the International Council of Shopping Centres (ICSC) – the global organisation dedicated to supporting the shopping centre industry and its owners, operators and retailers. And the focus was on delivering this experiential approach.
It’s in Asia Pacific that you’re most likely to see shopping centres recalibrating and giving the new drivers of consumption – Millennials and Gen Z – what they crave.
Malls are newer there and can be reconfigured for experience more easily. Also there’s not an over capacity issue that is fatally undermining many North American malls. The U.S. has 23.6sq feet of shopping centre space per capita and Canada has 16.7sq ft. The UK leads in Europe at 4.5sq feet. By contrast China only has about 2.8sq ft.
So what are the emerging ‘experiential’ trends being driven by Millennials and Gen Z?
- Non-anchor malls – malls of 300 specialty shops with no large anchor tenants are becoming more popular. The undifferentiated offering of the large department store or food hypermarket just doesn’t cut it with Millennials.
- Multiple purpose malls –including a mix of retail, food and beverage, experiential and services like healthcare. One of fastest-growing mall segments? – offices and residential rental units – that’s right, why not live and work in the mall.
- Shop sizes getting smaller – some stores are acting as little more than shop windows. Millennials and Gen Z don’t mind seeing and trying the product and then ordering it because the shop inventory is limited. They expect this kind of connectivity in distribution between store, website and warehouse.
- Corporate social responsibility – malls are now in the vanguard of community social responsibility with programmes like disabled ambassadors and awareness initiatives focused around autistic shoppers. Again Millennials and Gen Z want to associate with brands that do well by doing good.
- Park the parking – a major trend now emerging is for malls to convert car park spaces to retail use – Millennials and Gen Z don’t come to malls by car.
Millennials and Gen Z are driving huge changes in the dynamics of shopping centres. They expect retail to engage with them, are more interested in buying an experience or a meal than a product or a service, and want brand alignment on values and trust rather than value at the till and a smooth transaction.
And they are willing to trade their privacy to get this. 73% of all shoppers want to do business with companies that use personal data to make their experience more bespoke.
This opens the experience door to everything – AI curating offers for individuals, personalised robot shoppers, facial recognition identifying real time sales as you navigate down the shopping aisle.
In the future experiential mall, the phrase ‘retail therapy’ might refer instead to efforts to resuscitate those among us who have been overwhelmed by the pace of change. But it is definitely the way forward.
Madano’s Investment, Development, Regeneration (IDR) practice provides strategic communications for companies across every stage of the property lifecycle; from real estate investment and advisory, through to design, construction, development and management.