Second installment of the results of the study 'Current situation of the Retail sector in Spain' carried out by Hamilton Retail, in collaboration with the magazine CENTROS COMERCIALES.
In this second installment of the results of the study 'Current situation of the Retail sector in Spain' –prepared by Hamilton Retail, in collaboration with the SHOPPING CENTERS Magazine– the reaction of the shopping centre sector to the crisis is analysed. Experts say that it has not been negative, but it has been, in some ways, insufficient. What prevails is a self-critical view that materialises in a constructive, active and optimistic stance towards the future.
One of the arguments is that the financial reaction has been adequate and essentially aimed at reducing the leverage of the Shopping Centers. However, the need to react quickly and focus efforts on various aspects such as: the management, marketing and consumer research, the Reaction to the threat of e-commerce and the change in street shops.
In the early days of Classical Greece, there was a period of social anxiety that came from the feeling of lack of control and incomprehension over the phenomena that occurred in their lives and surroundings. The classical authors called this 'chaos'. This anxiety favoured the beginning of a stage in which people sought to understand reality, measure it and control their lives. In this context, canons and exhaustive knowledge of the environment emerged, which allowed a structuring of reality and thus reduced the anxiety generated by the fantasy of not having control over it. This idea is reflected in the art and thought of the period: order, canons and measure in the context of chaos.
The crisis has favoured the need for greater knowledge and control over its centres in the sector. Traditionally, asset managers They had a marked financial profile. Their essential function was to add value to the assets for which they are responsible. Today their function is the same, but the way of carrying it out has been transformed and modulated in recent times. They have been acquiring other knowledge based on new needs. Their role has evolved to reach a more retail profile, with great knowledge of the reality of their centres and their visitors, with greater control over reality.
For this, knowledge of the environment is vital. The mix is the basis, the starting point, a necessary but no longer sufficient condition. Contextual awareness and differentiation are essential in a highly competitive and punished environment. We are faced with a profile of asset manager more complete. The asset manager Today, the centre has acquired new skills. To add value to an asset, it is necessary to position it, create a relevant and differentiated brand territory, attract a consumer who is truly profitable for the centre, start from an attractive brand promise and offer a memorable visitor experience.
For the asset manager Nowadays it is necessary to know your clients, your visitors, your competition and the effectiveness of marketing and advertising actions..
In short, it is a evolved profile, with a 360º knowledge, detailed, analytical and rigorous. That is, a asset manager more demanding, with greater knowledge and greater involvement in the reality of the centre. The role of management companies is highly valued, they are given a highly important role as they have good specialists in different disciplines (marketing, architecture, etc.) and have great responsibility in the good running of the Shopping Centres. It is agreed that the relationship is bidirectional and it is necessary –and more so now– to provide them with the resources and tools for the good running of the centre.
There are various criteria used by the asset managers to evaluate the management of Shopping Centres. These criteria are essential since they act as drivers when making a decision on choosing one management company or another, when changing management, or in the assessment made of management on a day-to-day basis.
The speeches collected also reveal a change in the priority of the criteria. In the decision, very diverse and vital factors come into play besides the fee. In fact, this factor has lost relevance in the perception of professionals.
Indeed, the decision is complex and multifactorial. On the one hand, among the tangible elements, we can highlight sales production, the level of occupation and the turnover rate, the level of debt, the generation of variable income or the effort rates. Within the intangible or non-quantifiable aspects, we can include the background or knowledge and experience of the company in question, both in the sector and in the asset in question; the fluid relationship and constant communication with the management company, as well as empathy; the action and proactivity in marketing solutions.
In addition, when evaluating whether management is being carried out effectively, other aspects are also valued in addition to the commercial mix: the attitude of management towards the centre, a good relationship with merchants. This is a very reliable indicator for asset managers and the good condition of the center.
The future is already here
As has been discussed throughout the report, the crisis and the emergence of the e-commerce phenomenon have caused a shift in the way experts conceptualise the Shopping Centre sector. We are in a time of change and reinvention, in which analysis, creativity and innovation are essential for the survival of Shopping Centres.
The change has been gradual, but the importance given to aspects such as marketing and consumer knowledge has grown exponentially in recent times. Marketing is part of the DNA of large asset management companies.
A A shopping centre is more than just a succession of shops. The modern consumer has changed, he or she demands more and it is necessary to connect emotionally with him or her in order to have a greater capacity for attraction.. From the perspective of the experts consulted, it is impossible to compete with the Internet in terms of functionality. As anticipated, there is nothing more convenient than making a purchase from the sofa at home and at the time of one's choice. There are no journeys, no time limits, and no inconvenience of taking the car. It is a losing battle. All of this has encouraged the use of marketing to establish drivers and levers that favour the Shopping Centre becoming the first choice, as a place to be, spend time, enjoy and make purchases.
The premise is clear: e-commerce is limited to rational drivers. The benefits associated with this purchasing channel are merely functional, based essentially on convenience, speed, ease, etc. However, the reality is that today the consumer needs to see the clothes they buy, try them on, touch them, in order to make the purchase decision. There is a clear emotional component underlying this. This is where the experiential factor comes into play and where Shopping Centres can act and influence the final purchase.
On the other hand, the online channel is cold, and no emotional connection is established with the consumer. An experiential and stimulating centre, where the consumer enjoys, feels comfortable and has fun, will foster an emotional connection with the centre itself and with the different brands it brings together.
All this will lead to a new relationship between the centres and the operators, yet to be created and defined. On a psychological level, enjoyment, expansion and fun have a double effect: on the one hand, it is attractive and stimulating in itself, attracting a large part of the public and generating greater flow; and, on the other, it reduces resistance, defence mechanisms and barriers, favouring a greater predisposition to purchase.
More and more properties and shopping centres have realised the situation and are making efforts to create experiences and seek differentiation within their competitive context. The link established with the brand (shopping centre) is close. The consumer decodes it as a place that is part of their life, not just as a place where 'I am forced to buy'.
Regarding the above, it is agreed that market research plays an increasingly important and vital role. The research that has traditionally been carried out is not sufficient. Of course, satisfaction studies, consumer profile studies, area of influence studies, etc. continue to be necessary for decision-making processes, however, rapid progress is being made in this area. The needs are increasingly more sophisticated and so are the research solutions required. In this sense, studies beyond the traditional ones are increasingly being carried out: brand studies, motivational studies, creative workshops as well as marketing action tests, advertising analysis, trend studies and a long etcetera.
To conclude this last chapter of the study, we will focus on the changes that are taking place in communication with the consumer. The Internet has brought about an evolution in people's interactions and relationships. Social networks have burst into our lives with force. Mobile devices such as smartphones and tablets have further enhanced this evolution. It is a channel that accompanies the consumer constantly, that is part of them.
Brands in general and shopping centres in particular have found a new communication channel to reach consumers in a direct and effective way.
The Internet has segmented the market in a profound way. The new trends involve knowing the consumer individually, communicating with him, and adapting products, services and advertising messages to the specific needs of each individual. Relationship marketing favours this possibility. The Internet has made it possible: new times, new challenges.
Acknowledgements
From Hamilton Retail and SHOPPING CENTERS Magazine We would like to once again express our sincere thanks to those industry experts who have collaborated with us, offering their time, experience, knowledge and market insight.Our panel of experts included: Ian Sandford (Eurofund Investiments), Christophe Mouton (Corio), Jesús Silva (UBS), Luis Vila (Vastned), Maël Aoustin (Unibail-Rodamco), José Manuel Llovet (Jones Lang LaSalle), David Sánchez (British Land), Israel Casanova (Redevco), Pablo Rodríguez (LaSalle), Jaime Maynau (Pradera), Joaquín Linares (CBRE GI), Eduardo de Roda (Rockspring), Mathieu Ammari (Deka) and Isidoro Mínguez (Orion). Without them, this initiative would not have been possible.
