Brave new world

As the retail industry ramps up to enter a brave new world, we look at the changes that will be common to all and how variations in asset format could impact future performance.

The UK government has issued stringent guidelines to allow the reopening of `non-essential' retailers in the UK on June 15th. These include the communication of safety measures, social distancing for staff and customers, and ensuring that products and surfaces are regularly cleaned.

Shopping Centres
Typically a key strength, the enclosed environment that is common to the majority of shopping centres could, in the short-term, be a significant hindrance.

Control over the number of entrants to both car parks and the centre itself is a distinct advantage, as is the control over common space to allow for sheltered and organised queuing. But shopping centres will need to be able to convince consumers that visiting enclosed public areas, where they may need to queue, have limited potential to touch and no ability to try on is both a safe and worthwhile venture.

With cafes and restaurants restricted to take-away only for the time being and some leisure and services still closed, the experience – which is typically the key differentiator for physical retail and particularly for shopping centres – is likely to be a pale imitation of what it has been in the past and will be again in the medium-term.

To succeed, shopping centres need to promote the safety of visitation, provide clarity of communication regarding opening times, how busy the centre will be at certain times, and the key dos and don'ts.  Thought also needs to be given regarding how to improve the experience – be it availability of facilities such as toilets and cloakrooms to entertainment for those either queuing, or in communal space.

Retail Parks
With fewer stores, outdoor environments, and the ability to park outside the door, retail parks are more likely to be the first trips many people make once stores start re-opening.

In addition to the external environment, the combination of the extra space available at retail parks –typically larger unit sizes allowing better spaced stores – and typically lower footfall create an environment that will hold significant appeal. Offsetting this appeal are issues around accessibility for those without a car; the preparedness of customers to queue in environments with little/no shelter from inclement weather; plus the potential issues regarding already popular parks that could be ill-equipped to cope, at least initially, with the pent-up level of demand.

High Streets
Already one of the key issues that hampers the performance of high streets is their fractured ownership. This has the potential to undermine  bounce back in performance post-lockdown measures easing. Single property/smaller landlords lack both the resources and incentives to invest significantly in measures to improve the post-lockdown customer experience whilst larger landlords could have priorities on bigger holdings elsewhere.

Many will look to local authorities and BIDs to step up and take the lead, which many are well placed to do, though budgets are traditionally limited. Priority should be given to attempts to improve communication between business and the customer and work toward changes that potentially benefit all – such as aligning opening times to ensure customers know when stores will and will not be open. An example of this was recently announced by The New West End Company who plan hand sanitisation stations and will provide face masks for staff and visitors, along with disposal bins to improve both actual and perceived safety.

Whilst the British public has a renowned trait of joining queues when they see one, it is yet to be seen whether the measures put in place in Brussels, where there are mini-roundabouts to allow pedestrians to change direction, will be similarly implemented by UK high streets.

Conclusion
Consumer sentiment and feedback from countries that have exited lockdown suggest that footfall will be significantly lower than prior to lockdown, at least for the first few weeks, but there are encouraging signs of recovery in Asia and Europe.

Landlords and property managers have been planning re-opening for many weeks and have had the opportunity to learn from what has worked overseas. The ease and cost of implementing the required initiatives will vary by type and size of destination, but it is those that are best able to make visitors feel safe that are likely to attract repeat visits and make shoppers move from purpose-driven trips to shopping as a leisure activity.

Sam Fox