What are the challenges to be faced by property managers?

Rafał Grzeszek, deputy head of Property Management, BNP Paribas Real Estate

The fall in consumer optimism resulting from the economic crisis has contributed to a decrease in turnover in respect of shopping centres. The sales of secondary needs products fall in a period of lower consumer appetite for risk taking. Therefore, retail chains are now forced to adapt their product range and present it in a manner that will persuade consumers to make a purchase – Rafał Grzeszek, deputy head of Property Management, BNP Paribas Real Estate.

It is a noticeable phenomenon now that the idea of shopping at a hypermarket is experiencing a decline in popularity amongst consumers, while there is a growing interest in what the discount stores have to offer. In an attempt to save time and money, increasingly more often consumers choose formats other than hypermarkets to do their shopping. This trend is leading to the development on the Polish market of new retail formats, which, while offering retail space to rent, do not fall within the definition of a shopping centre. These include for instance convenience centres and strip malls. in easily accessible locations, and with their leasable area not exceeding 5 000 sq m. Furthermore, the growing importance of e-commerce is also observable on the Polish market which will certainly have an impact on the format of retail facilities.

 

The growing popularity of discount stores and convenience centres shows how rapidly the market reacts to the changing conditions and the manner in which the changes affect consumer behaviour as well as the volume and type of modern retail space being supplied. It is an indicator of an effective property manager to be able to anticipate the emerging trends and react suitably so as to retain or even improve the position of a shopping centre given similar social, economic and technological changes.

 

Internet-based “shopping centres”

The increase in transactions carried out on the Internet is one of the key signs of our time showing the changing patterns of consumer shopping behaviour. The majority of stores and brands will in the nearest future have the option of making a purchase online. We expect that ca. 30%-40% of sales will take place on the Internet. Certain retail chains which used to rent large spaces in shopping centres might gradually decrease the number of square meters rented. The most significant changes will take place in respect of the sectors which are already exceedingly popular on the Internet, i.e. electronics, household appliances, as well as interior decoration and garden goods. As far as the first sector is concerned, it is estimated that as many as 30% of purchases are made online. The effect of the Internet is even more evident in respect of searching for and initial selection of goods with almost 60% of shoppers using the Internet as the main source of information with regard to what products are available on the market. At the moment we continue to browse the Internet, while in the majority of cases the shopping is done in an actual store. With time, however, we will buy on the Internet and choose from whatever we find there. This is proven for instance by the rapidly growing e-commerce market in respect of the clothing and footwear sector, despite the fact that only a couple of years ago, few people could imagine purchasing these type of items without assessing them by physical touch. As far as e-commerce is concerned, trust in online stores is vital and applies to areas such as timeliness, quality of goods and payment security.

The current legal and technological solutions in respect of e-commerce have dispersed any doubts, and the satisfaction level with regard to online shopping matches satisfaction from shopping done in the most renowned shops.

Within the next 5 – 10 years the above trends will have a great impact on shopping centre management, which will first and foremost be visible through the reduction in size of sale premises within the sectors most sensitive to Internet-based shopping, i.e. electronics and household appliances. In a smuch as within the next 5 – 10 years certain sectors will experience a growth in the number of customers choosing to shop online, there will always be those where consumers will physically carry out their purchases in-store.

Shopping centres will certainly not disappear from city maps, as the need to examine a product before purchasing it remains a priority for many. However, the format and position within urban spaces of the facilities will change, i.e. the size of premises where food and entertainment are offered will increase...

The full text you can read  Almanachu CH 2013/2014

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