Fuelled by the seismic shift in mobile and social technology, the way people shop and interact with spaces is changing. How will the cities, developments, and shopping destinations need to adapt to keep up with consumer demands?
As part of the Cushman & Wakefield Retail Insight Programme and our continued relationship with Central Saint Martins, University of the Arts London, the world-renowned college for arts and design, we invited a panel of experts and some of our key clients to look into the future of places and how space will evolve.
We share below the event highlights trends that could impact your business either now or in the near future.
If you would like further information about the Cushman & Wakefield Retail Insight Programme, please contact Justin Taylor, Head of Retail, EMEA.
ARUP: CHANGE IS CONSTANT
Lynne Goulding from Arup Foresight told us that change is now the only constant. Businesses must be aware of both megatrends (long-term evolutionary changes) and emerging trends (early signs of directional change) in order to detect change early and adapt accordingly. The most important factor for survival is an emphasis on innovation and reinvention. It is estimated that 75% of the S&P 500 firms will be replaced by new firms by 2027. As well as pace of technological innovation, she outlined the following global megatrends:
- Growing populations and increasingly urban populations
- Ageing populations with rising health risk factors
- The growth of the global middle class
- Increased focus on health and wellbeing
- Increased interest in sustainability and the circular economy (reuse/repair/recycle) due to climate change concerns
The pace of change is increasing at an unprecedented rate, we need to be aware of global trends and issues and focus on adaption and innovation to ensure the survival of our businesses.
CENTRAL SAINT MARTINS: CONTEXT IS KEY
Tricia Austin,Course Leader of the MA Narrative Environments course at Central Saint Martins, UAL suggested that property owners and retailers must understand this changing context in order to recognise their audience and learn how they will interact with the physical environment. Students on her course then use imagination to set about physically and emotionally folding stories onto spaces. Their research creates compelling narratives, which can lead to the development of places that people emotionally connect with, creating brand loyalty over time. Their Value Retail Project in Shanghai demonstrates this.
Value Retail, Shanghai
We must understand the context and the customer before beginning to imagine narratives that will engage them.
FREESTATE: EXPERIENCE OVER ENVIRONMENT
Alex Maclean from experience master planners FreeState highlighted the changing habits of consumers and revealing that in choosing how to spend their money, most millennials would rather have experience over things. Brands must better understand their customer’s enthusiasms in order to create experiences that attract and involve them, and the same goes for developers who, if they want to more surely attract and retain corporate occupiers they must consider the ideal user experience as the foundation of everything they do. Pioneering experience-led case studies Alex noted include:
- Rapha- appealing largely to urban middle-aged men creating an authentic narrative journey of glory through suffering and escape, who could resist that call to action?
- Disney- the entire Disney brand is based on the storyboarding of immersive narrative experiences, where every element of place is employed to magically transport the guest to a point of transaction.
- The Highline, NYC and Argent’s groundbreaking work in Granary Square, Kings Cross are both highly successful experience places, fusing a striking physical environment and an ever-changing experience programme, they attract and involve new audiences on a daily basis. No wonder Google was so attracted by the King’s Cross dynamic.
Experience is the new currency: Authentic narrative experiences inspire attraction, involvement and a deep sense of belonging, better connecting the end-user with a more valuable end-product. Brands have known this for decades, now developers need to wake up and join the experience revolution!
ARTHESIA: STRATEGIES FOR A NEW RETAIL REALITY
Thomas Sevcik from strategist Arthesia further set the scene by identifying macro forces creating a new retail reality:
- Economic stagnation
- Unclear point of sale in retail
- Retail fatigue in significant socio-economic groups
- Increasing value of experience over things- ‘peak stuff’
He discussed how retailers are adapting to this by adding experience to stuff in a physical space. This is developing into a hybrid system for retail where experience is a currency and point of sale is unclear. Examples of new models for retail:
- Gucci - Gucci have developed a brand restaurant in Shanghai. Now customers can not only buy Gucci, but eat Gucci
- Levi’s – Create artificial scarcity through a secret, invitation only store in LA.
- Zurich airport- New quarter comprised entirely of brand showrooms with no products for sale.
Retail is now the grey area between the producer and consumer and their relationship goes far deeper than ever before. Property owners may therefore also have to reassess how they value bricks and mortar retail. Should they factor in sales that occur outside the store?
He noted the challenges facing retail and how the current changes are structural and beyond anything we have ever experienced.
Retail fatigue, peak stuff, and the hybridization of traditional retail and experience means we must now think about retail differently. New valuation models need to be developed as well as new strategies for brand engagement.
Cushman & Wakefield is already working on a number of projects with clients who are thinking about retail differently. For more information please get in touch and look out for the next insight event in our series in 2017.
Watch the event film
Central Saint Martins, UAL
Central Saint Martins, UAL (CSM) is internationally renowned for the creative energy of its students, staff and graduates with an exceptional reputation for educating foundation, undergraduate, postgraduate and research students in arts, design and performance. Based in a multi award-winning building at King’s Cross, Central Saint Martins students benefit from comprehensive workshops both digital and traditional, tailored social spaces, a groundbreaking theatre and an extensive library. CSM is part of University of the Arts London (UAL), an international centre for innovative teaching and research in arts, design, fashion, communication and the performing arts. The University is made up of six Colleges: Camberwell College of Arts, Central Saint Martins, Chelsea College of Arts, London College of Communication, London College of Fashion and Wimbledon College of Arts. www.arts.ac.uk/csm