From re-gentrification to AI : Exploring new directions in shopping
The Property Council’s two-day Retail Conference kicked off this week with a tour through some of Auckland’s most affluent suburbs, which are setting precedents for retail design.
Day one: The tour
The first stop was in Remuera, where Match Realty’s Mike Hammer explained the town centre’s need for re-gentrification.
Hammer said the high-income neighbourhood’s residents traditionally spent in areas such as Britomart and Ponsonby, leading to the development of 1050 Remuera, a laneway style project modelled after Sydney’s Double Bay.
The laneway now houses boutique Kiwi retailers such as Thai Village, Elle & Riley and Wakuwaku.
In Newmarket, Scentre Group’s Justin Kean said the team was looking to return Nuffield St to its former glory after the refurbished Westfield mall turned it into “an off-Broadway tragedy”.
Kean said the adjacent New World Metro was the first of its kind in New Zealand, with warehousing, storage and parking built behind the supermarket to capitalise on street space.
Kean said the supermarket “sets the template for how [Scentre] want to move the precinct forward”.
He said Westfield Newmarket had $700 million in turnover in 2022, reaching 500,000 locals who are 12 per cent wealthier than the Auckland average.
In Ponsonby, the Ponsonby Central project was designed to bring European-style markets to Auckland.
The centre prefers to house small businesses rather than chains, with developer Andy Davies hand-picking El Sizzling Chorizo and Dante’s pizzeria as some of its original tenants.
In the downtown area, Architecture firm Warren and Mahoney’s head of design Blair Johnston said Wynyard Quarter still had another 15 to 20 years before it was completed, but was being developed with future generations in mind.
“What Auckland desperately needs is a plan that extends beyond the current generation,” Johnston said.
At Commercial Bay, centre manager Andrew Trounson said a new rooftop bar in the works will bring the number of retailers at Commercial Bay to 120.
With Queens Wharf and Princes Wharf hosting cruise ship passengers every second day, tourists are a major pull for the developers, but locals still made up 30 to 40 per cent of its customers, Trounson said.
“We lost the corporate and tourist market in Covid, so it’s a testament to the centre that the local community supported the mall.”
He said one big market the team was still waiting on was Asian tourism, with the number of Chinese visitors still relatively low.
The centre has 26 food operators, with some turning over more than $100,000 in revenue per square metre.
Trounson said developer Precinct Properties wanted to design a higherend offering than the average foodcourt, making way for the multilevel Harbour Eats.
“If your offering is right, you can be super successful in this space.”
Day two: The conference
Clothing retailer Barkers’ managing director Jamie Whiting said the company was “running in the red and heading for rocks” when he joined in 2010, but managed to turn over $20m by 2018.
He bought 25 per cent of the company in 2010.
Store environment and design were on top of Whiting’s list, starting with Barkers Lambton Quay in Wellington.
“Our stores were s*** because nobody gave a s***,” he said.
“You can’t put up a sign up and hope someone will buy something,” Whiting told the crowd.
Instead, he focused on quality of products and stores, doing “everything on a shoestring”, refitting stores between 2012 and 2018.
In 2018, Whiting said, Barkers made $20m in revenue, which was invested back into the business, and started a new focus on sustainability.
The company partnered with Saitex in Vietnam, a clean denim producer which he “stumbled across on Instagram”.
Whiting told Saitex’s chief executive that Barkers’ annual demand for denim was what Saitex produced in a day, but their shared values were enough to strike up a partnership to lead the company to more sustainable production.
The general manager of Scentre Group, Justin Krzywokulski, gave the audience a runthrough of Westfield Knox, 25km east of the Melbourne CBD.
Krzywokulski said the mall’s total trade area captured 470,000 people, comparable to Westfield Manukau (495,000 people) and Westfield Riccarton (525,300 people).
He said the biggest challenge for the mall was the 3.1 per cent decline in sales for Australian department stores, while overall retail sales increased 13 per cent in the same period.
The closure of Knox’s anchor department store, Myer, left 18,000sq m of free space across four floors. This had led to a reimagining of the centre to “anchor by place”, establishing distinct sections rather than retail based anchors. With the closure of Myer, Krzywokulski said the mall’s lifestyle offering was replaced with brands like Uniqlo and JD Sports.
The first level of the mall is home to food retailers like Woolworths and Aldi, and also makes room for Melbourne’s growing migrant community with its Asian gourmet market, combining food retail and catering.
With a swimming school, public library, basketball court and community event space, Krzywokulski said the mall had become a hub for locals.
On the technology front, Lynker Analytics principal of data science David Knox said everyday use of artificial intelligence (AI) will be the norm in a year.
Our heavily monitored cities mean AI can track and map the flow of people and traffic, helping to make key urban design and retail placement decisions, Knox said.
“It comes down to what customers think.
“Is it creepy or is it cool? It’s both.” Knox said smart mirrors had a slower uptake than predictive advertising technology, but are being rolled out by clothing retailer H&M in the United States to improve the online shopping experience.
He said, “It works with customers using their own devices. It’s customers invading their own privacy.”
However, Knox said AI and e-commerce are not a risk for physical retailing. “It is already a risk we have moved through. People go to bricks and mortar for a reason.”