Divide and Differentiate Part 3: Understanding How 'Local' Dictates the Business of Food in Retail Centres

Understanding How 'Local' Dictates the Business of Food in Retail Centres
Malls of the future need to adopt a customer-centric approach when master planning F&B, however, have they understood how critical it is to relate to the target customer base on a local ‘community’ based level?

In part one and part two of this series, Future Food’s concept of ‘Divide and Differentiate’ was introduced and backed by examples (Westfield, Sydney and The Emporium, Melbourne) as to how successful this concept is when applied to F&B master planning. Moving into the future of retail centres and F&B outlets, understanding what constitutes a customer-centric curation of options is integral to the longevity of food halls and the sustainability of retail centres. In part three of this series, we look into what customers’ are favouring when it comes to F&B offerings and how the ‘Divide and Differentiate’ principal is the key to future proofing your retail centre. 

Food is no longer a functional offering. We are seeing more and more ‘new-age’ dining destinations pop up on the scene that are not just shopping centres and retail precincts. Kings Cross Station in London has been elevated by Bill Granger’s recently opened venue and local and international airports are becoming shopping and hospitality destinations (as opposed to just landing zones) with the influx of celebrity-chef cafes and restaurants. This movement towards an elevated customer-centric experience appears to be validating a higher spend as it meets the needs and expectations of today’s exposed consumer.  

There are two questions that need to be asked

1. If customers are seeking and willing to pay for an experience then what does the experience entail, and how will retail centres mitigate competition from the high street? 
2. What are developers doing to create a community vernacular when it comes to their F&B proposition? 

The answer is - ‘the differentiating factor’. Retail centres of tomorrow require a point-of-difference to compete with non-retail destinations. By applying the concept of ‘Divide and Differentiate’ to a F&B master plan, a retail centre is future proofing their position within the greater business world. Why? it widens the the centre’s food and hospitality offer across all day parts contributing to the growing evening and experience economy; all aimed at greater patronage, extended dwell time and maximised MAT and asset value. It’s time to put the customer first at every touch point and align the offerings to the shopper and non-shopper of the future - the educated diner. 

What Does the 'Educated Diner' Want?  

Whilst top fashion houses such as Burberry and Armani have embraced food and hospitality into their spaces to draw out the customer experience and create customer engagement, a major point of consideration is the idea that today’s consumers are looking for social congregation within a new, yet familiar environment. There is a sense of loyalty being developed with start-ups that are relevant to the community and are within easy proximity of reach receiving a lot of support from customers. These concepts focus on food quality and branding as much as menu development and customer service resulting in a real and tactile experience in an appealing and comfortable environment. Here enters the concept of ‘local’- a social affiliation and support of homegrown concepts that today’s consumers can relate to. We are moving away from the large international brands which have previously reigned supreme and into the era of local food and beverage concepts ranging from fresh produce to cafe and restaurant offers, all of which contribute to the betterment of the community.  

Applying the ‘Local’ Concept to a F&B Offer 

As mentioned in part one, it has become evident that a master plan dictated by a leasing strategy (and therefore non-strategic F&B brands and outlets) leads to a lower average spend in an elevated spend environment which negatively impacts the targeted MAT per square meter. Referring to the local concept, introducing homegrown concepts which already have a strong fan following and captive audience is a guaranteed way to create a community vernacular around your F&B offer and increase customer spend. Local does not refer to a grungy, corner cafe concept. Customer’s have an expectation of interiors, ambience, depth of menu, customer service and branding which cannot be undermined. Local is about the support of homegrown talent and chef tier II concepts. Local is accessible yet refined non-national brands.   

This has been displayed in Australia with Neil Perry’s Burger Project being put in at the newly refurbished MLC centre in Sydney and George Colombaris’ Jimmy Grants at The Emporium, Melbourne and it has shown that customer’s are willing to increase their average spend based on the perceived value proposition. If mitigation of competition from the high street is a concern for retail centres across our country, then the expansion of ‘local’ concepts from the high street into a shopping centre, to be aligned to the positioning of the centre or cluster, is a strategy that should be treated as essential rather than aspirational. 

As with fashion and now with food, customers are now looking for the most genuine experience (street food, local grocer or market-gardener) which indicates that the future will be about customer ‘need states’. Eating out is now aligned closely with personal style, selecting what you eat, where it was sourced and where you eat is part our personality and style - it is intrinsic to us all as customer. Customer’s want their food and hospitality to create positive and memorable experiences. This requires careful master planning, which amalgamate many disciplines that make up a positive experience (including an understanding of consumer preferences, desires and buying patterns). If ‘local’ is the new future food, how will your centre interpret this customer desire?

If you would like to know more about how Future Food can support operators in driving these sales opportunities and more, view these services at http://www.futurefood.com.au/#services