– CBRE Launches Ground-Breaking Research of 21,000 Shoppers –
– Around Half of Consumers Still Prefer Local Centres to Dominant Malls –
Investment in facilities is vital to reinvigorate smaller and high-street retail centres, with around half of consumers saying they prefer the convenience of local shopping to dominant, purpose-built malls, according to major new research from global property advisor CBRE.
The new report surveyed 21,000 consumers in 21 countries to discover where and how they shop. The research reveals that 49% of consumers prefer smaller centres or high streets to large, purpose-built covered shopping centres. A majority of consumers (40%) also disagree with the statement that big regional shopping centres will be the only places worth shopping at in the future.
Convenient access is also a critical factor for consumers when choosing where to shop, with 49% of consumers traveling 15 minutes or less to their most often visited non-food shopping – generally a smaller or high street location. The majority of shoppers also believe that smaller shopping centres will compete with online retailing in the future.
Price, cleanliness, convenience and security continue to top the list of factors that consumers expect to be present across all countries in all kinds of shopping centres. The provision of a range of retailers, parking facilities and reassurance on security and personal safety are also ranked as important. Shoppers also see independent retailers, the presence of specific retailers, the fact that a centre is covered, and a range of services such as banks being ‘fairly important’. In contrast, entertainment facilities and events are seen as relatively less important.
Consumers are also more likely to visit improved shopping environments – the greater the investment, the greater number of visitors. Higher earners are also more appreciative of improvements, with modern facilities drawing big spenders. Consumers report welcome improvements in the shopping centres to which they have access, with 40% saying their shopping centre has improved over the past three years. However, investment in smaller centres has been neglected with 45% seeing little change over the previous three years. The biggest improvements have been noticed in larger, dominant centres, where 26% felt facilities had got ‘a lot better’. Such centres were also much more likely to have seen an increase in international branded retailers.
Consumers who prefer smaller centres are less concerned about entertainment and additional services roles. As their size indicates, they are not chosen because they offer a large range of retailers. Over 55s and those on middle to low-incomes prefer these centres. Those preferring large covered shopping centres choose them on the basis of the presence of specific retailers and the larger size of shops, as well as for their social and services role, particularly in respect of catering and entertainment services. Parking facilities are also valued.
John Welham, Head of European Retail Investment, CBRE, commented:
“The contemporary battleground for shopping centre market share is increasingly focusing on what a shopping centre can offer in addition to pure retail sales – food and beverage, entertainment, and events – all designed to create compelling experiences for shoppers – as well as other services such as medical facilities, fitness and wellbeing. That said, shopping centre managers should not lose sight of the basics such as price, convenience, cleanliness and security – these are essential, qualifying criteria that must be in place to meet consumer needs.
“Better funded owners have been able to make investment in facilities, but typically in the larger, dominant malls and often at the expense of smaller centres. These smaller centres – and high streets – are still well patronized and extremely important to a large consumer demographic across Europe, but have suffered from years of under investment. In a challenging economic climate, improving facilities has been difficult, but failure to adapt by owners, and those involved in their development and management, will inevitably lead to a loss of market share in a retail environment of dynamic change.”
The report also reveals three distinct clusters of countries by geography that broadly share shopping characteristics –‘Shopping Centre Socialites’ (Turkey, Spain, Romania, Italy, Ireland); ‘Utilitarian Consumers’ (Sweden, Norway, Denmark, Czech Republic); and ‘European Mainstream’ (Austria, Belgium, France, Germany, Great Britain, Greece, Hungary, Netherlands, Poland, Russia, Switzerland).
Peter Gold, Head of Cross-Border Retail, CBRE, commented:
“Shopping Centre Socialites are found in Mediterranean countries such as Turkey, Spain and Italy see shopping centres as ‘good places to meet friends’ and want good quality restaurants, cinemas and free Wi-Fi. By contrast, Utilitarian Consumers, largely to be found in Scandinavian countries, value cleanliness and the range of retailers, including the presence of both independent retailers and department stores. These consumers are less attracted by the additional entertainment activities that might be offered by centres. These two clusters can be distinguished from the European Mainstream found in core retail markets such as France, Germany, Great Britain, and Poland.”
Different expectations by age are also apparent. As expected, younger age groups appreciate the social aspects of shopping centres much more than older groups – including meeting friends and taking advantage of entertainment services such as cinemas and free Wi-Fi. This group tends to use public transport more, so they are less concerned with parking. Interest in services appears to decline with age overall. Notably, over 65s tend to look for covered shopping centres with a department store, free parking, independent shops, while favouring cleanliness over price.