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Retail faces the future - C&W



In its Retail Outlook report for 2020, real estate advisor Cushman & Wakefield analyses the changing retail landscape in Europe. It starts by saying that Retail is undergoing major disruption fuelled by a set of powerful technological, social, demographic, and economic forces.

Turning to the impact on the real estate side of the market, C&W goes on to say that physical stores will remain an integral part of the retail ecosystem, but to survive and thrive in the current environment, retailers will need to be more proactive to consumer needs and improve and curate the shopping experience. As such, retailers must dedicate the time, investment and resources to take strategic advantage of new technologies.

Advantage

Physical stores, says C&W, retain a clear set of advantages over online. Shops provide the opportunities to interact with knowledgeable staff, to try products on, to receive them immediately and, from the retailers viewpoint, to upsell to the consumer more easily. New technology supports the store through click & collect and automatic payment, which make the shopping process easier and quicker. Arguably, the recent growth in home delivery is nothing new – but rather a throwback to a time many independent shops would regularly deliver to local customers. That said, the prevalence of home delivery vehicles on the road is also creating problems congestion and pollution. C&W believes this will result in more cities implementing policies to mitigate them.

Locations

Areas of interest continue to be convenience stores in urban locations, grocery stores and prime locations in major city centres; which benefit from strong footfall, often from a combination of shoppers, workers and tourists. Other key target segments should include designer outlet centres, experimential flagships, luxury shops and leisure focused or activity-based retailers. A well curated food & beverage sector should continue to be a key driver of activity, increasingly underpinning the consumer offer in major European destinations.

Looking at this specific and increasingly important sector (Food & Beverage), Cushman & Wakefield has this to say: The rise of food and beverage operators has been welcomed by many high streets and shopping centres. As an industry it has developed more quickly than many and continues to search out new approaches to address consumer needs. Recently, the growth of food delivery apps has received a lot of attention, while so-called ‘dark’ or ‘cloud’ kitchens (such as Karma Kitchen), which service these online food orders, are growing rapidly. An increasing number of hotels are also considering leasing kitchen space to such operators, while centrally located car parks are being used to house mobile kitchens. The explicit aim being to deliver rapidly to customers, often at lower prices than traditional restaurants.

Clearly, Cushman & Wakefield’s report demonstrates that the retail industry is indeed undergoing fundamental change, and the coming year may see more concrete examples.
Tim Harrup
09-01-2020


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