Retail has been under the microscope over the last few years, particularly in Australia with trade falling below the yearly average since 2014. The sector is undergoing massive transformation to accommodate the evolution of technology, the global online shopping competition, the arrival of new majors such as Amazon and the ever-changing customer profile. Where once the only way to access new clothes, homewares, luxury items and groceries was to visit a brick and mortar store, now people can do all of their shopping online without visiting a store at all. Australia’s e-commerce alone sales topped $20 billion in 2016. So how do you keep people coming in to your shopfront, retail centre of precinct? How does brick and mortar retail remain relevant in a world where people do their retail shopping online? The answer is you provide an experience and that experience is food.
Retail developers around the world are seeking new strategies to keep their customers in their centres and precincts. They are evolving their technology and online offer but at the same time they are repositioning the brick and mortar offer to promote visitations and provide customers with an experience they want to come in for. Food is at the centre of this repositioning with more space being devoted to hospitality in retail centres and the outcome being bigger spends, both on food and retail and longer dwell times - two fundamental factors for centre and retail performance.
Here are eight statistics that prove the food movement in retail. They show how retail centre owners and developers see food as the best friend of brick and mortar retail and is a key reason for shoppers to visit, spend and stay in a retail space:
1. In London, CACI reports that people who shop and dine spend 39% more on average, with dwell times being over 10% longer. Furthermore, shopper-diners spend 35% more and dwell times are 81% greater than those who spend on retail and don’t use catering.
2. UK's department store chain, John Lewis has recently installed in-store food and beverage operators including Italian burger operator Ham Holy Burger, Neapolitian pizzeria Rossopomodoro, Comptoir Libanais (healthy Lebanese) and Benugo (café and coffee shop) in its Oxford Street flagship store.
3. Retail property company, British Land in the United Kingdom reported that there is a near perfect correlation between catering conversion and dwell time at the centres across a selection of different types of retail.
4. Westfield has initiated a huge investment to increase the amount of food space in their developments. The company expects to see an average annual specialty rent rise by 25% post the development program.
5. In Abu Dhabi, nine out of ten consumers usually visit a restaurant or café as part of their time spent at a retail mall because it is an important aspect of their socialising. According to a report from KPMG, these customers favour quick service, cafe and smart casual dining style outlets and visit them multiple times a month.
6. In other parts of Asia, there is an equal dependence on shopping centres and their food and beverage offers for socialising and relaxation. Compass One mall in Singapore recently increased the space allotted to food and beverage from 20% to 33% as the chief executive of the developer saw food and beverage as ‘non-discretionary’ spending.
7. Closer to home we see we see shopping centres like Chadstone continue to realise the value of food in creating unique selling point (USP) and how it is not only the Fashion Capital, but now is the Food Capital with over 105 food and beverage outlets.
8. Pacific Fair in Queensland houses resort style casual and smart casual dining options offering an irresistible choice of food and beverage venues. As part of a $670 million redevelopment, high end fashion shops with huge investment fit outs have been opening along the boulevard attracting international shoppers and lots of onlookers.
Retail centres around the globe are working hard to overcome the challenge of remaining relevant in a world where online retail is dominating. By expanding the meaning of what it means to visit a brick and mortar retail centre, centre owners and retail outlets can expect more customers more often and customers can expect to visit and not only shop but also see, do, eat, drink and experience what can't be replicated online.
Credits - cover image via M&G Real Estate