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THE MARKET


Put the needs of shoppers first


ASHLEY BLAKE, HEAD OF RETAIL PORTFOLIO MANAGEMENT, LAND SECURITIES


Retail property is just about the relationship between the landlord and the retailer, right? Wrong. While that is, of course, vital, if we want to make our retail schemes the best they can be we need to redouble our efforts to understand our ultimate customers, the shoppers themselves. A great retail location is only


great because of the shoppers – get them spending and then retailer demand, rental growth and investment value will follow naturally. Retailers are facing a tough


time, and marketing budgets at a local level are being pulled back in favour of a more cost-effective nationwide approach. So it’s down to property owners to use their local knowledge and relationship with the community to ensure the retail scheme delivers the best possible experience, tailored to the needs of its customers. How many landlords really


understand what their shoppers want from their centres? Do you know why they come? Do you know what they feel is missing from your


asset? Do you really know why they don’t come more often or spend more money? Understanding shoppers is


crucial as we move beyond simple metrics like footfall to more meaningful statistics like spend-per-head, which is key to driving sales and rental growth. That is why research is so important. At Land Securities we have a


dedicated retail research team and survey more than 10,250 people each year, collecting 17,500 postcodes to better understand where our shoppers are coming from. Customer communication


must be two-way and personalised as modern marketing demands bespoke messages, tailored to the


individual shopper. And soon customers will


expect this as standard, in the same way that free wi-fi and mobile-enabled websites are now considered a necessity rather than a bonus (60% of shoppers in a recent US survey ranked personalised offers on their smartphones as their preferred type of offer). Shoppers not only want


technology as standard – 80% of them want to use technology to help them shop, according to a survey by IBM – but are also becoming increasingly demanding. The number of consumers making a complaint (across all sectors) has risen by 76% in the past five years, according to a survey by the Institute of Customer Service.


Retail, like our graduate, really is alive and well


TIM VALLANCE, HEAD OF RETAIL & LEISURE, JONES LANG LASALLE, UK


We recently lost a graduate. Nothing macabre – he’s alive and well. It’s actually worse than that. He has decided move to Jones Lang LaSalle’s very successful and growing Affordable Housing team. We told him that he had


great prospects as a retail agent, but he believes that he has a better future in the social housing market because “retail’s dead - isn’t it?”. We can’t blame him. Nearly


six years of incessant economic headwinds and the exponential


4 Summer 2013 www.estatesgazette.com


speed of change in shopping technology has produced enough negative headlines to make any youngster, or veteran, question the future of traditional retail agency. So, is there a future for UK


retail agency? Of course there is. The British love shopping and retailers need shops. Retailers also need to grow revenue and profit to satisfy shareholders or to maintain their place in the general hierarchy. It remains undeniably


difficult for retailers and we will continue to see some struggle, but many are


adapting, some are growing and some are just beginning. JLL research reveals there is current demand for over 25m sq ft of retail and leisure space in the UK – in town, out-of-town, on schemes and on the high street. This is fairly healthy. Unfortunately, this doesn’t


mean that the current vacancy rate of around 14% will be reduced overnight. Yes, retail agency is alive and well, but it’s not going to be easy. Occupiers will be more selective than ever with both their new acquisition strategy and their existing portfolio management. They will only acquire and


renew leases on stores, shops and restaurants in the right trading locations and they will require physical, legal and financial flexibility. However, it’s not all about low rent and short leases. Only those locations that complement their multiple channels to market, are functional and either offer real convenience or experience will make the grade. The UK retail market has


proven itself to be irrepressible through multiple wars and recessions and it will verify this resilience once again with the help of hard-working and well-informed retail agents.


People are becoming more


discerning and will not spend their money if their experience isn’t up to scratch. That’s why leisure is a vital part of our business. It’s so important to get the level of restaurants and leisure right to increase dwell time and spend per head. We must look to learn from


other sectors such as the best airports, hospitality and theme parks, indeed anywhere where the customer has a great experience. We need to not only


understand customers and keep up with their changing needs, but look ahead to what they’ll be demanding next and keep on tailoring the way we interact with them. This hard work will reward


us with growth and outperformance.


REX FEATURES


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