In the dawn of the ‘internet of everything’, the question on everyone’s lips is how will the technology, which is changing our world every day, impact the world of retail?
In the dawn of the ‘internet of everything’, the question on everyone’s lips is how will the technology, which is changing our world every day, impact the world of retail? What will the physical retail space of the future look like?
At the Cushman & Wakefield-sponsored FutuRetail 2014, a one-day event recently held at Google’s London HQ, constant innovation rapidly altering the retail sector’s landscape was the hot topic.
As the physical and digital retail realms entwine even further, we are seeing a huge amount of structural change in how the retail market operates, from the increased use of bluetooth technology for shopping centre navigation to big data for shopper targeting – and the property industry has to respond to this swiftly. The speed of change in retail will be much quicker than we all think and technology has already started to provide the platform for this evolution.
We are just at the beginning of the journey of networking and communication and its increased integration into the retail world. It is how retailers and developers adapt to this fusion of technology, social media, traditional customer service and store quality that will set them apart from competitors.
Social media is providing a unique customer dialogue which presents a genuine opportunity for retailers to understand their customers’ behaviour.
One of the most interesting things about the ‘digital revolution’ from a retail perspective is that everything is drawn towards events and the physical world. It is important to understand and recognise this trend – the whole notion of exhibition will be a dominant theme in the future of retail and property. Differentiation, experience, authenticity and independence are things the retail industry is really looking for and are certainly part of the solution for retail space and engaging the consumers of the future.
Looking forward and at the bigger picture, global urbanisation is going to be a key driver of where retail development takes place in the future. The United Nations estimates 50% of the world’s population lives in urban areas. And by 2020, this figure is anticipated to be nearer 70%.
Reacting to market demand quickly by innovating is crucial for developers. For example Westfield London has recently introduced, for the first time in the UK, a new click-and-collect service which allows shoppers to try on online purchases in a fitting room before they take them home.
Large shopping centres in prime locations will continue to dominate the market for the foreseeable future and we will see an increasing polarisation between these stores and schemes in secondary locations.
We are going to see more ‘retail resorts’ as global destinations in the future. Consumers constantly crave a memorable experience when shopping and we are seeing owners and developers respond with some very creative ideas. There has been a remarkable uplift in leisure activity generally and not just the odd restaurant and cinema – schemes such as the 2.2 million sq ft Puerto Venecia in Spain are fundamentally redefining the notion of a shopping centre; it offers a man-made canal and lake, featuring a surf wave rider, alongside an adventure park with zip wires and rope courses.
Finally, the ‘wow factor’ – this is something which isn’t going anywhere in a hurry; we all like to be ‘wowed’ on occasions and I think this is part of why physically going to the shops will always be a great experience, that’s important to remember. One thing is for certain, with technology making life easier, making us more connected and providing opportunities for creative working unlike anything we have seen before, the physical act of shopping is only going to get bigger and better. We’re starting to see glimmers of the future of retail but there is so much more still to come, and it’s going to be magnificent.
- Justin Taylor is head of EMEA retail at Cushman & Wakefield