Cannes, France — After two years of intermittent closures and restrictions, brick and mortar stores are back as retailers try to reconnect with consumers.
This is one of the key takeaways from the MAPIC Retail Real Estate Conference, which is back in its full program for this year’s edition.
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In the face of ongoing global economic and political challenges, it doesn’t look like the pre-pandemic ‘normal’ will return anytime soon, but retailers and shopping center developers alike are poised for new consumption. Responding to consumer patterns and an increasingly competitive environment with new amenities, entertainment and services. Embrace omnichannel integration.
The conference was themed ‘People, Planet, Profit’ and participants sought to present a forward-looking vision for the future of retail with a focus on sustainability. It’s not just a general buzzword that encompasses all things eco-friendly, it’s also about keeping retail shopping centers thriving. viable in the long run.
The two floors of the Palais des Festivals were filled to capacity again, leaving considerable space devoted to leisure and food and drink concepts. Organizers said he had 5,000 participants from 75 countries, down from his 2019 high of 8,500 but showing the sector’s resilience. The tally included 1,600 exhibitors, with brands returning, but this year many invited guests or paid heavily discounted rates in a move by new organizers RX France to secure their participation. Did.
Middle East and Asia showed growing retail ambition with some of the largest stands on site. Saudi Arabia’s Diriyah Square made the biggest announcement of the week. In partnership with Time Out Markets, the 1,650-seat dining, event, exhibition and performance space is set to open in this gorgeous village in 2025.
On the ground, attendees were energetic and positive about the future of retail centers, even as consumers change the way they shop. The developer is focused on expanding as an entertainment destination and accelerating the growth of his concept of new activities that were taking place before the pandemic, while seeking new ways to capture the attention of busy consumers.
“Hundreds of malls around the world are struggling for identity,” said Thomas Cartledge, CEO of consulting firm Benoy. [food and beverage], we have run out of leisure time. what’s next? Is it art or is it culture? ”
The American Dream Mall in East Rutherford, N.J. already has DreamWorks Water Park, Legoland and Nickelodeon Universe theme parks, but the next evolution in entertainment involves building a massive esports arena.
The new space spans over 40,000 square feet across 2.5 floors and hosts monthly events with audiences of up to 2,000. The space will not only be used by esports stars, but also musicians and professional athletes who monetize their gameplay through Twitch and other streaming services. The space also includes a social media lounge where influencers can live stream and create content.
This follows American Dream’s partnership with Mr. Beast, which had thousands of fans lining up and even camping out all night to see the YouTube star when Mr. Beast appeared in September. . The activations are all part of American Dream’s efforts to give it a leg up on projects that have struggled to attract shoppers and missed paying some debts in the wake of the pandemic.
Via Outlets has unveiled a ‘Pink-Tok’ room as a dedicated space for guests to take photos and shoot content for social media during the €17.5 million expansion of its center in Seville, Spain. Created and added art installations. Centrally located property near Lisbon, Portugal and Davos, Switzerland. Chief Executive Officer Otto Ambergheir said: “Creating something people remember is part of placemaking.”
Other developers mentioned adding social services such as the city library and medical center. “It’s an amenity that the town center has, and incorporating it into the retail center can make it a more long-term and sustainable place,” he said Cartledge. “Some are loss-making. Landlords may think that putting it in there and losing money makes it worth the trip.”
“Shopping places are becoming like the Roman Forum,” says Peter Wilhelm, chairman of the European Council of Shopping Places. “We’re going back to the origins of retail where people were going to markets, not just because it was a place to shop, but because it was a place to meet people.” transformed into a vaccination center, solidifying its important role as a community center.
New amenities have been key to boosting foot traffic post-pandemic, and have so far been elusive. Regardless, traffic remained down around 10% from 2019 figures across the continent, with Germany, France and the Nordic countries being particularly hard hit, dropping more than 20%.
Despite the decline, some landlords said inside figures show individual spending is higher, helping put an end to the ongoing online vs. bricks-and-mortar debate.Procos Online sales remain higher than in 2019, but are trending down, according to Brands, especially luxury and premium brands, have found that the costs of selling online (shipping, logistics, returns, etc.) are squeezing their profits.
Patrick Delcol, Head of European Retail at BNP Paribas Real Estate, said: “Online purely digital channels are basically declining. “
He added that with rising interest rates and the demise of free-flowing money, online retailers will be under pressure not just to capture market share, but to demonstrate earnings.
Digital native direct-to-consumer brands, especially those in the beauty space, are considering opening and experimenting with physical brick-and-mortar stores. Online returns are also benefiting overstocked outlet shopping centers, expanding these spaces as inflation hits homes and consumers become more cost-conscious.
Armani, Gucci, Karl Lagerfeld and Nike. “We talk a lot about making big things bigger. We have done a lot with luxury brands. are aiming for.”
As luxury and discount expand, many executives are predicting a wave of consolidation of middle-tier centers in the US and Europe. The UK is particularly ripe for acquisitions as real estate loses up to 70% of its value as investors revalue assets.
Still, the market is reluctant to invest in mid-sized centers, said Delcol of BNP Paribas. “Many investors are waiting for a little more clarity and for interest rates to stabilize before finally returning to the market.
Consumers become more cost conscious and expectations that the world is headed for recession could cause shopping to plummet. This could lead to a consolidation move in the shopping center market, with some large companies likely to acquire smaller, older centers with a view to redevelopment.
“I think we’ll see Asian market activity enter the European market and buy some of these malls because they can bring in some of the Asian retailers and that’s what they I haven’t seen it in a while,” said Benoy’s Cartledge.
The market’s outward optimism overshadowed a cautious undercurrent and the European energy crisis was a hot point of discussion as developers assessed a combination of geopolitical headwinds and the economy. rose 600% last year, it said it put capital expenditures and expansion plans on hold.
Via Outlets’ Ambagtsheer said it has developed solar projects in Spain, Portugal and Norway to create its own energy supply, which it can offer to tenants as a way to cut costs.
The need to keep energy costs down is the talk of everyone from developers (who are feeling the pressure from all sides) to brands, leading to a surge in sustainable planning.
“We definitely see sustainability as an important issue. [in financing]said Giles Membry, Managing Director of Rioja Estates. “[Investor funds] “We don’t look at anything unless it meets certain criteria for sustainability and ESG checks,” he says. action.
“We see more and more regulations regarding ESG standards and we need to implement them. We’re asking for a lot of information about what we’re doing,’ said Balenciaga and Valentino, working with Dior’s doors this summer. “It’s kind of coming from both sides.”
“Brands will not want to be involved in developments that do not have a strong sustainability agenda. said Alex Avery, CEO of commercial strategy firm Pragma.
From a brand’s perspective, sustainability is key to engaging consumers as consumption patterns change. “The pandemic, the environmental crisis and the current low prices are accelerating calls for changes to more responsible consumption practices. Clearly there is demand from our customers,” said Adidas vice president of retail expansion. said Alexandra von der Grün of
“We had some difficult conversations,” said one brand rep, but von der Grün was positive. I’d say it’s open, but I think both sides are established at this point. [standards] step. Next year it will accelerate, but there is a lot of speed on both sides.”
Ingka Centers, which operates 49 centers across Europe, China and India, launched a 700-square-foot circular fashion concept space in Sweden in June.
Vasco Santos, Global Sales and Leasing Director at Ingka Centres, said: “They are looking to companies for inspiration, and we have a role to play in leading the way.”
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