BIRD´s EYE VIEW will contribute to the next RCSC Seminar as a speaker.
Focusing on “Downtown Shopping Center”, the seminar will take place this Tuesday January 29th 2013, in Moscow “Gallery Airport” on Leningratsky Prospect.
More to come on this seminar, as we will soon share our comments and the attendees’ contributions.
This article from ICSC should encourage the Retail-Driven Property industry to revise its business and real-estate approach to Retail… What could be alternatives business models for Shopping Centers when the value really researched by tenants is not only about Gross Leasing Areas but exposure, customer contact points, media, etc.?…
‘Showrooming’ becoming a trend from ICSC
Showrooming is catching on. And these retailers that stock home-related merchandise have the most cause for concern. The term refers to the consumer trend of researching an item in a physical store and then making the purchase online. Some 20 percent of shoppers who bought home-related items last year made the purchase through showrooming, according to research firm NPD Group. Stand mixers, electric knives, sewing machines and floor cleaners were last year’s most popular showrooming pieces, and this year power tools, hair setters and robotic vacuums show signs of being next, says Perry James, president of NPD Group’s home-and-office-supplies division.
Last year 7 percent of consumers who pre-examined a kitchen item inside a brick-and-mortar store made the actual purchase online, NPD reports. Some 4 percent of shoppers looking at personal-care items later bought the merchandise online, and 2 percent did so with home-improvement products. “On the flip side, two in three consumers that researched a home-related product online ended up purchasing it in the brick-and-mortar store — a practice that has been the norm,” said James. Online sales of small appliances and home-improvement merchandise grew 20 percent in dollar terms last year, says NPD. But small appliances accounted for just 13 percent of online sales in dollar terms last year, while home-improvement sales made up 5 percent. Thus, the majority of these sales took place in brick-and-mortar stores. “We are a long way off from a world of online-only shopping,” said James. “The majority of consumers buy their kitchen appliances, personal-care and home-environment products in a brick-and-mortar store.”
Amazon.com launched a smartphone app last year called Price Check, which enables product scans in physical stores for subsequent online purchase from Amazon at a discount. “The prevalence of smartphones provides consumers with the ability to do price comparisons in real time, while still in the store, increasing the challenge retailers are faced with to offer the best price,” James said. James recommends that brick-and-mortar retailers promote the immediacy of the in-store shopping experience. “The need to touch and feel a product before making the purchase is still very compelling for most customers, and that is what initially gets them in the door,” he said. “Once they have the items in their hands and have decided they want it, the need for immediate gratification can be too strong to go home and wait for an item to be shipped to their home — even if it is the less expensive option.”
Establishing and sustaining trust between the providers of the development funds and those who are in charge of developing the assets requires to have a “Bird’s Eye View” over the development process along which this trust will be either reinforced by fulfilled steps or challenged by intermediate failures..
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At BIRD’s EYE VIEW View, we focus on retail-driven property, more commonly and restrictively called “Shopping centers”
We believe Retail is, among others, essential to sustainable urban communities.
Montesquieu once wrote: “Là où il y a le Commerce, il y a la paix – Là où il y a la paix, il y a le Commerce”.
One could argue retail is not necessary Commerce with a Capital C. Correct. Montesquieu meaning of Commerce might have been closer to “social exchange” rather than “interchange of goods”. But we like to think that both are necessary for a peaceful community.
Property is usually understood as “the possession of a person, the ownership of a company”. As far as “Retail driven property” is concerned, we like to extend this meaning to “something at the disposal of the community”. But that part has been left behind in most Retail driven properties… Retail has become over the past decades limited to the “sale of goods to ultimate consumers”: it has pushed away the “social” factor as well as the “interchange” idea to support “consumerism”, for which “ever-expanding consumption of goods is advantageous to the economy” (but does “advantageous to the economy” necessary means “good to the people”?…).
To some extent, as proven by the fact that UNIBAIL RODAMCO for instance, is classified under “Financial Services” in the French Stock Exchange CAC40, property became a “financial asset”. In this scheme, retail has thus become a mean of “financial growth” (growth = increase) rather than a mean of “development” (= progress), whether it is about human or urban development. In these conditions, it is barely contributing to the community, and certainly has very little ability to build peace into a community.
Retail driven property has shifted it’s focus from the community it should serve to the financial growth it is supposed to bring. Meanwhile, retailers have jumped into the “cross-channel retailing era”, deeply impacting their business model and their business relationship with Shopping centers landlords.
As a consequence, we believe that retail driven property will either deeply suffer from today’s evolution or seize this as a great opportunity: it might actually be the first time in its history when Retail driven properties such as Shopping centers will have to change in NATURE, both for retailers & customers:
For retailers, shopping centers will be less “selling places” than “media places”.
For customers, shopping centers will be less “purchasing places” than “gathering places” The Landlord / Tenant / Consumer status-quo is challenged…
We thus believe the following challenges will drive the industry:
– Give sense to retail places such as Shopping centers, a new sense to these places.
– Provide the Tenants with a major voice over the places to “touch” their customers
– The question will not be “how many consumers per year” but ” how many visits per consumer?”
– Create an ubiquitous retail environment, extend the physical frontiers of the Shopping centers
– Have a more holistic view of the business from manufacturing to distribution and recycling.
– Have better insights to the full business, collect data and provide it to your tenants
– Think from “purchasing places” to “gathering places”
– And much more…
Facing these exciting challenges, we have made ours Gaston Bachelard’s quote:
“Let’s imagine too much to realize enough”
As we are currently doing some preliminary research on the latest trends on retail parks for one of our clients, I am wondering, while looking at some examples, if these new retail parks, still on the drafting tables or coming out of the ground, are not trying to fool us on something…
Under the “beautiful words” of “sustainability”, “Nature”, “Green” etc, I wonder where is the retail? Some images are even more doll on these “new paradigme” where the usual retail boxes are being revisited behind extensive planting…
But when you look closer, say at the plans for instance (It’s harder to lie with plans) what is really different is the public space: cars are pushed away as much as possible, sometimes even behind the buildings, and retails parks become streets, curved promenades or patios…
Does that make retail different? Maybe not. You still have to take your car to go shopping… Most of these new retail parks are still ignoring the surrounding, not only because they often happen to be at the crossroads of highways (as 30 years ago): The public space they create is not connected to any existing element, starting and ending on their own parking lots, or even contained in heir own buildings…
These Retail Parks often talk about Urban retail etc. But I doubt they will induce any urban stuff… as long as they remain self sufficient and introverted.
But let’s be optimistic: Enjoy the beautiful promises shown on the images, hoping these gardens, promenades, sidewalk will sometimes lead to a real urban environment.
The KOZZY Shopping Center located on the Anatolian side of Istanbul could have been a great example of community-oriented retail. But a too greedy management is turning it away from its long-term success.
This neighborhood-oriented downtown center has for sure been well studied and designed. No doubt its ICSC award was deserved. When looking at it and strolling throughout its well organized common spaces, you have the feeling something suddenly went wrong : carts, kiosks, temporary covered terraces, (temporary… actually made to last), advertisement, commercial exhibitions etc… have been added to each available square meter of the center, both inside and outside. The result is an overcrowded and overwhelming environment, where one could have experienced a pleasant shopping promenade in its own neighborhood. Too bad!.
A good shopping experience requires “free space” from the “Marketing Business”, to allow the retail to lead the show, engage the customer and finally induce stronger turnover and footfall.
Kozzy is the perfect example where too much short-term revenue-oriented management might finally threaten longer-term revenue-creating retail.
But anyway, Kozzy is definitely worth a visit.
We are currently involved in the development of a major retail scheme in Moscow. To express his vision, our client took me to Gorki Park in downtown Moscow. There, I discovered the rebirth of what used to be an “amusement” park. Formerly “locked away” from the city with controlled and “toll” access, Gorki Park is now becoming an open urban space filled with many different individuals and groups of people.
I was amazed to see how this is happening,: good sense, sensitivity to the existing structure of the park and awareness of the presence of the near-by Moskva River. And above all, all is done for the people to enjoy the place, in an “Otium Cum Dignitate” spirit: I’ve heard that the Strelka Institute will move to Gorki Park.
I engage anyone visiting Moscow to spend some time in Gorki Park. Just take a walk through it, enjoy the flowers, the water, the alleys… You might change your point of view on this city… I’m curious to see it in winter.
What is even more amazing to me is that an Investor, willing to develop a “new generation shopping destination”, brought me there to express his vision. We have been working for years on creating such environments, where “commerce” can be developed to its full “Raison d’être”: Exchange between people and communities & creation of wealth, both tangible as well as intangible. This new development will certainly be a major event in Europe when it opens!…
Great article to read, presented in a very few words:
“Change and innovation is pulled forward by the gravity of the fitness landscape of your organization and it is created by people enabled and empowered by technology”
We @ Bird’s Eye View are working hard on this to unlock the power of IT to the Property Development World. Hard work and so much to be done.
Thank you Max Pusher!