EUROPEAN & US RETAIL REALTY PLAYERS GET INNOVATIVE TO SURVIVE THE E-COMMERCE THREAT
In the US, Amazon recently purchased Wholefoods, a natural and organic grocery store with over 460 locations across North America and the UK, in a $13.7 billion (£10.6bn) cash transaction, making clear its intent to tap into this new business model. The same company also recently filed for a patent for ‘multi-level fulfilment centres’, beehive-like structures that will accommodate the landing and take-off of drones in dense urban areas.
Experts predict that, eventually, day-to-day shopping will move from the smartphone screen to voice command via personal assistants like Alexa and Siri, who will order online automatically as and when required with delivery via drones within a matter of hours. ‘Shop & Go’, another Amazon concept, lets shoppers download an app that allows them to enter a physical store, select items and simply leave without paying. Computer vision and sensors track what items you’ve taken and your Amazon account is later charged so no physical money changes hands.
All this means that it is likely that shopping centres and town centres increasingly need to become places of experience and a place for people to gather and socialise. In the US and Europe, landlords of shopping centres are reacting fast with a vast array of interesting experiences being attracted to centres, such as ice skating rinks, aquariums, go-kart tracks and ski slopes to name a few. Landlords need to ensure they have the crucial ability to evolve and keep up with the pace that new innovations will bring to the physical retail space. Encouraging consumers into physical stores still plays a key part in influencing their purchasing decisions, even if their ultimate purchase isn’t made there and then. Successful landlords will be those who give retailers a space that allows them to capitalise on these influences.