The only constant in retail is change
The FRP leasing and asset management team discuss how the retail landscape has shifted to adapt to people's evolving lifestyle patterns.
Retail is an ever-changing industry, whether it be consumer trends, retailers’ response to those trends, new ways to interact and transact or a fundamental shift in behaviour. The consumer landscape over the past few years has had a huge impact on the way in which commercial property and retailers function.
Working from home & flexible working
The new work/life perspectives of consumers and the increase in working from home, have created a highly decentralised way of living. It has also given more time back to the consumer thanks to flexible working hours and less time commuting.
This shift has shown us that location and convenience are becoming even more important to the decision-making process when it comes to where consumers choose to spend their time.
Local community connection
CBD retail spending has decreased, partly due to reduced workers in CBDs and partly due to shopping centres offering far greater convenience for consumers
, as well as centre owners’ introducing more curated tenancy mixes. This has resulted in more consumers choosing to shop at their “local” which demonstrates the importance of centres offering a third space together with activations that foster connection and community.
Click and Collect
Online was once the major distributor to bricks and mortar retailing, however, retailers have now developed an understanding of how online and in-store shopping work together to create the perfect synergy of convenience and service. A clear example of this is major supermarkets investing in ‘click and collect’.
These facilities make it easier and more convenient for the consumer to shop, whilst also benefiting the centre and speciality retailers by bringing more customers to the centre. In addition, online sales have fallen since the peak in 2021, which is a clear indicator that consumers want to spend time in public spaces, socialising with family and friends within the broader community.
Customer-led tenancy mix
Current consumer trends embody the social mindset, that we are social beings and that we want to spend time connecting with others, however, we want it done on our terms and enjoy doing it within our immediate community. This is where site selection and development type are so important when building for the community.
A precinct that includes a dining hub, supermarket, gym, services/retail and childcare centre, as an example, all within walking distance from each other, creates a diverse and curated tenancy mix.
The right tenancy mix is crucial in appealing to the local community and in ensuring that the precinct is the area of choice when consumers are deciding where to shop and spend their time. This final aspect is a key differentiator in the making of a successful retail precinct vs a precinct that doesn’t perform to its full potential.
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