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04/12/2022

The Future of Physical Retail, Two Years In: Consumers Need New, Real Experiences

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future of retail

My mission since 2019 has been to spatially and culturally reimagine how we do physical retail in the U.K. In that first year, as the world was gripped by a pandemic, we designed a plan to create incredible places for people, re-think the role of the landlord, refocus on treating the occupant as a partner, and deliver sustainable, diversified value to our investors.

Despite the meteoric rise in contactless and online shopping with Covid, we perceived an increased need for a new model of physical, in-store commerce that brought people closer together through pleasant and memorable interactions. We’ve put our strategy into practice, prioritizing experiential retail for the consumer by introducing indoor street markets and transforming vacant storefronts and unimaginative shopping center corridors into places of community engagement and inspiration.

How do we do this? By creating human-scale space that allows for meaningful one-on-one interactions and pedestrian-scale observation. We aim to deliver a rich and detailed commercial canvas that allows consumers to feel they’re in an artistic, vibrant, forward-looking space—one that is curated for them, one they’ll want to share with others—that also offers interesting things to buy which will cement good, ‘shareable’ memories.

The future of shopping, I believe, rests on offering a series of these "activations” that encourage the community to experience and engage. Shopping is still an important reason for consumers to come to our places, but shopping alone is no longer enough.

Another goal, therefore, is attracting events-based occupants, with the ambition of creating shopping centers that are also destinations. A concert, a Tai Chi class, a parade destination, a talk by an emerging author or poet: these beckon to people with new and different reasons to come.

Retail Startups and Entrepreneurs Need Flexible Space
Tenants hold a vital role in this new scenario, and to support them my company is taking a radical approach to leasing out space to startup retail businesses. Our aim is to help kick-start the bud of a business idea without allowing the proprietor to go into massive debt, while also connecting with a wider, more cross-pollinated audience than they’d be likely to get on their own or online.

Most young entrepreneurs setting out to open a retail business don’t have a lot of cash to back their dreams. Here, the property owner can play the role of incubator.  By envisioning these small businesses as an investment in building a community hub, we mentor them and participate in their success by offering leases with startup terms that are pretty hard to turn down.

We believe that figuring out what people are willing to buy is best accomplished person-to-person, preferably starting out in a market stall setting. To that end, we’ve developed a retail design concept called Street Market, which has given us a new vision of rental space.

Street Market provides tenants with an entry-level into shopping center renting. In 2020, we launched a flexible partnership model based on turnover rent options, which gives our tenants a complete range of rental options—traders can book a space by the week, month or year. The diversity in our marketplaces helps create an ecosystem of brands that support our existing retailers, draw shoppers in, and increase the amount of time they spend there. There’s always something new and interesting—every day the mix changes, to the surprise and delight of shoppers.

In April 2021, we created a new, curated High Street that we call Kingland, in Poole, a town in the south of England. There we set out to champion 10 local Dorset-based independents, offering them free or very low rent for the first two years. The startups needed to have diverse offerings that would appeal to many different types of consumers. We chose a fishmonger, coffee roaster, design studio, surfboard shop, zero waste grocery store, art gallery, gin bar, home interiors specialist, restored secondhand furniture shop, and perfumier. One of our tenants told the New York Times, “I don’t think I would have even considered it, because the high street was dead and they needed to bring in everybody at once.”

It seems to be working. Since the launch of Kingland, the new High Street is contributing additional footfall that is 10 percent ahead of the national benchmark. The street has also created 31 new jobs for local people.

Retail Landlords Need to Become Curators and Mentors
This new approach to retail has prompted a massive shift in our role as a landlord. Landlords’ historical role as the bean counters and "librarians" of space has been static, mainly leasing, collecting rent, and cleaning spaces. However, responding to consumer demand, this role has shifted to editor, curating content that relates to the customer.

Shopping centers often get two things wrong: curating the customer journey, and connecting one end of the shopping center to the other, visually and spatially. While we’ve spoken about presenting a diverse and interesting mix, it’s equally important to pay close attention to the public corridors of a shopping center, which historically have been left to pure, ugly functionality. 

Online retail stresses the figurative path to purchase and customer journey, but in physical retail the path is tangible and real, critically providing links and connections between retail units.

Of necessity this means the death of sterile, inward-looking, cookie-cutter retail environments that are no longer relevant. With the demise of several major UK department stores in recent years, the traditional large-format store as an anchor for shopping centers is no longer solely drawing shoppers in. Now customers need to have multiple reasons to visit, shop, work, connect, and hang out.

Launched in September 2021, the Beacon Center in Eastbourne, on the south shore of England, has become a true community hub. By activating the spine between existing retail units, this public space can be used for programming around play, relaxing, work and networking. It’s exciting to see this change in the rhythm of our shopping center offering—we’ve seen footfall increase by 10 percent in the new public zones.

We believe that great public realm can become the anchor of tomorrow. It’s not only the thread that spatially connects the key components of a retail asset but also is a space in its own right, where people can interact and engage. Our new model aims to bring the landlord into the heart of the community to make a positive difference—and in doing so, the tenant and the consumer become vital, interactive elements of a positive social experience.

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