Shopping malls all over the globe are constantly evolving in response to a number of global trends coming together at the same time. Malls, which initially served as a place for communities to shop and eat, have now transformed into a destination composed of diverse mixes: specialty stores, art and cultural institutions, recreational and leisure spaces, one-stop payment centers, educational and transport hubs, and even government offices.
“Mall are becoming increasingly differentiated, with store mix, location, entertainment, and food and beverage (F&B) offerings being tailor-made to suit the mall’s target audience. Mall developers, having recognized such differentiation, are now diversifying their portfolio of mall offerings,” KMPG said in a report titled “What’s the deal? The evolution of malls and their value proposition,” published in October of last year.
According to KPMG, today’s malls can be broadly categorized into community, regional and destination malls where community malls target local residents, while super malls attract visitors from all over the world with its unique offerings.
Such differentiation is expected to be seen in the future. “However, another key aspect will be the considerable extent to which technology is expected to pervade each type of mall,” KPMG said.
Last May, Phillips Edison & Company (Phillips Edison), one of the largest owners and operators of grocery-anchored shopping centers in United States, identified the most promising and significant retail trends breaking out shopping centers today. These include food halls, pop-up shops, fast-casual dining, showrooms and experiential retail.
According to Phillips Edison, communal dining is not a fleeting trend; it’s here to stay. Thus, growth in the “micro food hall” concept, a food center with footprints in the range of 2,500 square feet that allow customers to order from various concepts with one shared kitchen, is expected to grow.
“These establishments will continue to find ways to give consumers unique real-life interactions while offering entrepreneurs relatively low barriers to entry,” the firm said.
To generate brand exposure, test new products and concepts, and create positive engagements with consumers, retailers are also taking advantage of the pop-up shop movement. Phillips Edison said that retail landlords are also embracing the said trend with dedicated programs and physical areas in their centers devoted exclusively to temporary concepts.
Meanwhile, fast-casual dining, a concept that combines elements of quick service with casual dining for an experience that is relatively low in cost, is gaining popularity as consumers crave expedience and quality.
“Recognizing this trend, many property owners are starting to hire dedicated executives to seek out the top emerging food concepts as this category takes larger shares of their portfolios,” Phillips Edison said.
Another emerging trend in retail shopping today is the use of showrooms. The firm noted that showrooms have become a powerful way for brands to create meaningful interactions with consumers.
It explained that while retailers seek to meet consumers’ demands for convenience, they also recognize the power of real-life contact with staff and products in generating a positive, long-lasting relationship. And this can be achieved by having a showroom, where consumers can talk to sales staff while taking a look at goods before buying them.
Aside from new products and services offerings, consumers are looking for experiences that engage and excite them. The National Retail Federation (NRF), the world’s largest retail association, said in one of its published reports that consumers are being driven more by brand experience as retail becomes commoditized and the competitive gaps in price and selection shrink.
“Shoppers want convenience, a unique customer experience and events that offer a compelling reason for store visits. They also demand personalization and strong digitally enabled customer service,” the NRF said.
A number of retailers are trying to respond to this trend by implementing interactive elements in their locations, such as using virtual and augmented reality, and 3D immersion technology.
“While we’ve seen hyperbolic headlines the last few years surrounding the state of retail and the role e-commerce is playing in it, those of us operating in this space know that e-commerce has actually led to exciting and innovative developments in brick-and-mortar retail formats,” Mike Conway, vice-president of National Accounts and Retailer Partnerships for Phillips Edison, was quoted as saying in a statement.
Mr. Conway said that the retail industry has shown true resilience in the face of disruption as brands have gone back to the drawing board to reimagine the entire physical retail model, which resulted to some amazing creative concepts.
“Overall, we’re confident that the future for retail is bright, and we can’t wait to see how these trends continue to unfold,” he added. — Mark Louis F. Ferrolino