Growing online sales have encouraged market players to implement new distribution channels in order to satisfy consumer expectations and preferences. Retail brands are opening web stores for expanding the product range offered in brick-and-mortar outlets. This ensures a higher availability of merchandise, as well as a more convenient shopping process. The increasing popularity of online shopping goes hand in hand with the development of the logistics industry, guaranteeing quick deliveries and returns of the purchased products.

Given the right incentives, the ever-larger group of online customers, who have so far not been as easily reached, might contribute to raising the footfall levels for both the particular shop and the entire shopping centre. Retail schemes are taking advantage of the popularity of web commerce by introducing free Wi-Fi zones, beacons and personalised shopping mobile apps. Click & Collect points, allowing the customers to pick up their Internet orders in retail outlets, encourage the integration of traditional shopping with ecommerce.

Shopping centres are also introducing parcel stations (e.g. InPost), which provide a 24/7 availability of the ordered merchandise for pickup. Prime shopping centres can gain their competitive advantage by skilfully combining traditional modes of sale with online channels. Changing the nature of retail centres by widening the entertainment, food and services range aims to attract and retain customers. These solutions can significantly strengthen the position of modern retail centres, as even the best online shop cannot provide such amenities. Repositioning and rebranding of retail schemes is a natural reaction to the evolving shopping trends and the growing importance of online shops.

Easier and cheaper access to the web, coupled with increasing customer interest in online shopping, have created new opportunities for growth, both for international retail chains and local brands, as well as individual designers. E-commerce allows large chains to optimise their sales channels. On the other hand, smaller retailers can enter the market thanks to the low cost of opening an e-shop coupled with almost unlimited access to potential customers.

For shopping centre landlords and managers, online sales pose the problem of potentially lower financial results of the tenants. Items ordered online and only collected at the outlet are usually not included in the turnover. Without introducing relevant changes to the lease, internal accounting systems, a separate cash register and receipts are not revealed in the turnover, thus not constituting any income for the landlord. It seems that the owners of retail centres will need to combine traditional sales with the growing potential of ecommerce.

Landlords are also posed with the threat of reducing the leased area and merchandise by tenants who conduct online sales. This is directly linked to the possibility of presenting the whole product range on the Internet, coupled with convenient ordering, delivery, return and exchange systems. More and more often tenants who are successful on the Internet treat their outlets at shopping centres as showrooms, for the client to try on and pick up their orders. Some fashion brands have decided to reduce the number and area of brick-and-mortar shops in favour of online shops. At the same time, however, other retailers are expanding their outlets and product range in order to obtain a larger share in the market.

Despite the increasing saturation, we have observed a stable inflow of new shopping centres to the market. Only in 2016, about 20 new complexes are planned to open. Modern schemes offer the possibility of attractively exposing fashion brands in fresh arrangements and new surroundings, providing the clients with comfort and complementary retail opportunities. This encourages the existing shopping centres to efficiently follow the latest trends and technologies, as well as target active property management at the more conscious customer.

Author:   Anna Hofman, Senior Negotiator, Retail Agency, Cushman & Wakefield