Over the next week we will run a series of articles and videos through LinkedIn and on our axiomyorkshire2021 facebook page focused on retail change, future of retail and the evolution of retail destinations. The January 2018 ‘death of boring retail’ headline, from experienced Forbes retail contributor Steve Dennis, resonated with us and we believe it supports our vision to curate a ‘relevant’ retail and leisure destination in Axiom.
THE IMPORTANCE OF BEING ‘RELEVANT’
We have distilled our Axiom customer mission into four key principles; convenience, experience, excitement and delight. The videos over the next week are designed to give an insight into how we will deliver on these key principles covering; digital innovation, catering and internal and external experiences.
There has been much speculation in recent years on the future role of physical stores and shopping centres in a fast-evolving retail world. Research shows that consumers are increasingly demanding more from their shopping locations and at Axiom we plan on meeting these demands by combining shopping, showrooming, leisure, sports, culture, events and outdoor pursuits all in one unique regional destination.
At Lateral, we constantly research global trends, experience new destinations and listen to our tenant partners, the lifeblood of our business, to ensure we have a clear vision of how our customer markets are evolving. We have made a number of key observations on current retail trends that we believe will continue to affect the physical retail world.
WILL THE MULTI-CHANNELS CONTINUE TO CONVERGE?
Multi-channel retailing continues to evolve with a growing trend of online ‘pure-play’ brands acquiring flagship bricks and mortar showrooms. Amazon continues to open physical stores with their acquisition of Wholefoods and their recent Amazon-Go concept opening in Seattle. Other examples include Missguided’s move from on-line to physical and Microsoft’s imminent UK retail debut when they open their Oxford Circus flagship store.
The purpose of the store will continue to shift from transactional toward being a marketing platform focused on service and experience, where deeper brand connections can be fostered before a point of sale is chosen. Companies such as Apple, Dyson, Nespresso, Nike and Tesla Motors continue to pioneer this approach by placing flagship showrooms in regional destinations, a clear evolution of the physical store into showrooms where customers will test, try and play in-store.
THE VIRTUAL AND REAL WORLD ARE NOT ENEMIES
Retail analytics consultant, CACI have recently published predictions on the growth of physical, on-line and mixed multi-channel retailing.
They predict UK on-line comparison goods spend will increase from £32 billion in 2017 to £74 billion in 2026. However, in contrast to doom merchants who predict the end of physical retail, there is good news with CACI predicting that physical comparison goods spend will increase from £178 billion to £227 billion over the same period. Furthermore, combined purchases in the form of ‘click and collect’ and ‘researched in store/ordered on-line’ will increase from £13 billion in 2017 to £29 billion in 2026.
It is clear that the growth of on-line has also driven off-line physical interaction. This reinforces both the important future role of physical retail but also the increasing importance of multi-channel retail strategies.
We picked up a rare 2017 interview with Leslie Wexner – founder of Victoria’s Secret, who has a clear view on the role of retail stores:
“Do I believe in retail?” he asked rhetorically. “Yeah, because for as long as there’s been recorded history, people have gone to the marketplace because they wanted to be with other people. We’re pack animals.”
Perhaps the simplest explanation for the ongoing role of physical stores in a multi-channel world is that shopping satisfies one of the most basic human needs: physical interaction. Many people still see shopping as a fun, sociable experience, the emotions of which cannot be replicated on-line. Consumers want to see, touch, feel and try before they buy.
We also continue to witness a significant trend for retail portfolio polarisation into bigger, better and fewer stores. Shopping destinations will evolve into either regional flagships or into local convenience led destinations, with flagship brand portfolios continuing to polarise towards the UK’s top 50 retail destinations. Axiom will be relevant as a regional flagship as it will be a top 40 UK destination in isolation and a top 30 destination in conjunction with neighbouring Xscape (which has one of only six snow domes in the UK) and J32 Outlet.
RETAIL LANDLORDS ARE NOW IN THE HOSPITALITY BUSINESS
For many years, the shopping centre model was simple: retail stores ruled, dominated by the traditional ‘anchor’ department store, often with an enormous but now oversized food store. Centres were surrounded by seas of car parking, with little public realm or greenery and functional, energy inefficient, climate-controlled pedestrian malls. The shopping centre was designed to be an inward-looking one-stop temple to retail, with little sense of relationship to the communities that surrounded them.
We believe, however, that this has changed; customers want more than bland retail boxes. All generations, not just the Millennials and generation Z, are looking for more diverse and exciting shopping experiences. We have witnessed the rise of social media platforms such as Instagram, with consumers becoming increasingly concerned with their social media profile, reflected in the search for ‘instagrammable moments’ where shoppers and visitors can come together and share fun experiences. They want and need both physical and emotional engagement.
The scale of Axiom means that we have the space and flexibility to draw from the best retail and leisure innovations from around the world and we are able to curate them in one place. Our videos and posts over the coming weeks will share some of the leisure attractions we intend to deliver within the Axiom experience.
We have spent a great deal of time looking at digital innovation. Unibail-Rodamco’s ‘digital dream’ screen installation at Les Quatre Temps in Paris is the most innovative and emotionally engaging use of digital technology we have seen in any shopping experience. You watch shoppers standing agog, arms stretched out holding mobile devices and filming these amazing digital screen installations. The Parisian digital display is the work of French company Admemori, who are working on Axiom to deliver the first digital experience of its type in the UK.
THE AXIOM VISION
Alongside a plethora of material, organisations and opinions that have influenced our Axiom vision, US retail developer Caruso Affiliates stands out as being at the forefront of the experience revolution in retail and leisure destinations globally. We would recommend you visit Caruso’s website www.caruso.com with a particular focus on their flagship ‘Grove’ asset in Los Angeles. While Axiom’s Yorkshire climate is different to LA, the emotional experiences sought by customers are the same. The Grove consists of Mediterranean-style retail facades, dancing fountains, a farmers’ market and grassy spaces where visitors can lie out. The feeling is more Disneyland than traditional shopping centre and this is the type of customer experience we intend to deliver.
We firmly believe the retail destination of tomorrow won’t just be built around the retail transaction. Instead, they will be mixed-use retail and leisure destinations that deliver; discovery, experimentation, education and entertainment. This reflects the four key customer principles which form the foundation of our Axiom vision; convenience, experience, excitement and delight.
For further information please visit www.axiomyorkshire.co.uk