The retail environment is such a dynamic and evolving space, a major challenge is to make sure our business is focused and positioned on the right things at the right time. Many distractions will come and go and it is how we sift through these to understand what is important. Listening to and understanding our customer and consumer needs goes a long way to making sure the focus is well guided.

For the retail and broader business at ISPT, the listening piece is a major part of our business focus. It is fundamental to how we want to operate and a key part of where we see the increased success of our business.

Through 2017, our focus and direction will be around a number of key areas tying back to customer and consumer and follows on some of our themes of 2016. Focus for retail at ISPT through 2017 will include:
• Creating places with meaning
• Building greater connections with our partners
• Driving innovation and efficiency through digital.

Creating places with meaning

Our role as providers of space is to make sure we create an environment that has meaning for our customers and the communities they operate in. Over the past decade and far more noticeable in the last 2-3 years, the role of the centre has changed. Whilst the primary driver of the centre has been as an exchange of goods and services, it is evolving well beyond this. Shopping centres are becoming far more focused on mixed use and full service offers and moving fast into experience driven elements.

We are now all wanting more than just a place to shop. The centre needs to provide a space that allows the opportunity to socialise, relax, entertain and connect back into the community needs.
Through 2017 and beyond, we are investing in our people and centres to deliver these places with meaning. This will involve partnering with leading businesses to assist with our projects. We are excited by these opportunities and what our centres will become over the next 5 years and beyond.

Connecting with our partners

Connections with our partners is critical to the success of our business. We must look beyond the basic contractual terms that formally bind us and explore what else can be achieved in a true partnership. Our common goal should be, how do we attract the consumer to our businesses and make them sticky?

I would see the partnership evolving into areas such as:
• Joint planning of centre redevelopments or new builds. What is going to work best for both parties to continually attract the consumer to the centre.
• Sharing of data and technology. Collectively, both parties house huge amounts of data and are exploring new technologies to understand and provide improved and personalised service to the consumer. How can this data and views on technology be shared to work smarter and be more aligned to the consumer’s needs? We need to explore ways this can work for the long term.
• What can we do to improve the overall experience for the consumer? In-store activation is no longer a differentiator for retailers, it is a base requirement. This applies equally to the common area space for centre owners. I would see a real opportunity for both parties to engage in greater collaboration of ideas around experience and see if these can be integrated seamlessly with each other.

Ultimately, we both want to create the best experience for the consumer as they enter the centre and the store so finding common purpose in this through sharing of ideas should be a serious consideration.

Driving innovation through digital

What digital and technology advancements can deliver has been mind blowing over the last decade, often led by improvements in mobile technology. This rapid change isn’t likely to stop and our challenge is to look at what technology to adopt in our centres with our customer and consumers to get the best return on investment and return on experience.

ISPT has begun this process of exploration in technology with the creation of an innovation lab to test and explore with our customers what the future of retail will look like and understand the changing needs of the consumer. Sharing of these ideas with our customers will be an important step in looking at how we adapt now and going forward, the development and operations of our centres. I don’t believe there is a blueprint for what this looks like but as a business, we need to be nimble and adapt quickly to rapid changes.

Partnering with our customers and understanding their digital strategies will be critical for our business to succeed. The requirement of retailers to have physical stores in centres will continue but with centres probably becoming broader in their function than just a shopping experience. They will look to include more distribution and fulfilment operations and the retailer and owner of the centre will need to adapt the centres to become far more technology enabled to meet these changing needs.

Being able to adapt quickly and respond to changing consumer requirements and getting the fundamentals of our focus right in the above three areas is critical given the increased competition and choice the market has. This is never more so with what are challenged market conditions. The increased cost of living in areas such as utilities and health are growing far beyond any real wages growth compounded by housing affordability which is putting pressure on what is left in our wallets and where it will be spent. The consumer will narrow their search and respond to centres where the experience and product is superior.

2017 areas of interest

Areas of interest to watch through 2017 in Australia will be the growth of pure play retailers. We have all heard the noise about Amazon and seen their impact globally, but what will their strategy be for Australia with any physical stores? The benefit they have is an already advanced digital platform and a huge consumer data base to utilise and adapt with a physical store presence. No doubt they will also be closely watched by a number of key retail businesses.

The millennials as a consumer market, how we engage with them and the influence they will have on shopping habits is also one to watch closely. There is so much conflicting information out there on shopping and experience preferences, to get any firm position is very difficult. The facts are they will become a major consumer in the retail market. Data out by Accenture in the US shows that millennials account for about 80 million of the total population with a spend of $600 billion annually. By 2020, it is predicated this spend will reach around $1.4 trillion annually and represent 30% of total retail sales.

How we respond and adapt our centres will be important to capture this market. Research suggests the millennials whilst probably more tech savvy than previous generations, still want a customer-centric experience and to feel valued and wanted through their shopping journey. They also want experience and activation as part of this journey. It would suggest their requirements are not that different to previous generations but the ability for them to use technology in every aspect of their lives is a critical difference. As owners of space, we will need to look closely at how we can best accommodate these needs into our centres. The retailers more than ever will need to provide a seamless end to end journey whether it be in store or on line as the use of technology is how their lives are now led. It will be an exciting and at times challenging period for retail in this space over the next 3-5 years to see how well we collectively can work to meet these rapidly changing consumer demands.