Flexibility is key for under pressure shopping centres, GlobalData
Shopping centre owners must make their space more flexible to react quickly to store closures and slow declining rental income, argues GlobalData.
Sofie Willmott, Retail Analyst at GlobalData, comments: “Diversifying shopping centre space is a wise long-term strategy to reduce exposure to the tough retail market and will help drive footfall to shopping centres. However, alongside major strategic investment, short-term solutions are essential to cope with the number of struggling retailers that are currently reducing their physical presence.”
Shopping centre owners should restart conversations with pureplays that may be interested in opening temporary pop-up stores, showrooms or event spaces, with the potential for these to become permanent if successful, she believes. Pureplay Gymshark runs pop-up events with influencers to promote its brand identity, while the boohoo group has recently confirmed that it is taking on a 5,300sq ft store near Oxford Circus to use for events and as a showroom.
Units that become empty at short notice can be transformed quickly using creative visual merchandising to turn a vacant shop window into a mini-store. For example, using shelving inset into a temporary shopfront, making the space appropriate for a smaller retailer or brand’s product range.
Willmott comments: “Much smaller units will be more affordable for local independent brands and could be viable as a second location for retailers that have larger stores in the shopping centre but want to display a specific range in its own space. This is a technique we have seen used in the Emaar-owned Dubai Mall.”
Alongside different retail options, property owners could quickly adapt units to bring in local food and leisure services, adding to the variety in shopping centres and creating interest for visitors. For example, a few street food vendors could be placed within one former retail store to create a mini food market, or a novelty leisure concept could be trialled such as the Selfie Factory that recently launched at Westfield London.
Willmott concludes: “Unoccupied space could be used as learning studios seeing landlords partnering with local companies to provide tutoring for children, craft classes or technology lessons. This is similar to what John Lewis has started to offer as part of its focus on experience.”