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Time for Design At the recent Retail Space Asia 2006 conference held in Hong Kong by Facility Media, Charlie Lin, 2007 First Vice President, CCIM China said there was “nothing like the fire of retail”. Retail real estate and design is so closely tied to the economy, consumer sentiment and even our sensory perceptions that our emotions and wallets can’t help but be moved by this sector. Especially now that
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| mature market information Growth potential for retailers is restricted in mature markets as new retail projects with any unique edge are limited. In markets like Hong Kong, notes Wright, this is compounded by a narrow choice of landlords who have “unrealistic demands” and charge high rents. real estate reflects design A new formula for retail spaces is being developed. With more open shopfronts and spaces seeking to include experiences that are appealing to all the senses. Wright describes these spaces as much more flexible, rigid theme areas are gone, and the overall look is more subtle with a surprise element, such as food and beverage outlets being decentralised and scattered throughout the space.  The overall theme of new retail spaces, however, is one of planning to differentiate and to surprise. The newly revamped basement level “marketplace” in Raffle’s Place, Singapore provides a good example of this more innovative approach. Termed in the literature “a fusion of fashion, food, music, books & lifestyle offerings” it features a number of new elements. The floor plan is in many cases open, curved and irregular, almost like a maze but with large openings through to the sky above. The feeling is not one of discomfort but one of discovery, the use of water features has also improved the feeling of being under overhanging eaves rather than underground. Owners, Tincel Properties, tout it as an example of how “creative use of space enhances yield”, in what is generally a non-revenue generating area. An “interactive shopping experience” has been implemented in phases with a focus on improving F&B options for visitors to the mall while interspersing other lifestyle elements throughout. For developers in mature markets Wright recommends allowing retailers to operate by delivering a unique experience for the customers. He continues that temporary and dynamic spaces, such as those which change structure, sound, light or even smell, keep customers intrigued by constantly refreshing their senses. He suggests those working in developing markets should implement the knowledge gained from mature markets into the design process to avoid major pitfalls. the designers perspective The design of a shopping mall is clearly very important but there is often an information gap between the developer and the designer, meaning that design objectives are not clearly understood. In a presentation entitled “Retail and Lifestyle” at Retail Space Asia, Patrick Bruce, The Oval Partnership, said that some retail design problems are traced back to the “tendency to believe our [designers] rhetoric”. Instead designers should understand they are providing a “business service. At the end of the day, the prime objective is not producing objects of fine art but to accommodate needs.” This applies just as much to retail space design as anywhere else. The way to accommodate needs is to understand the business and the objectives of the owner. Bruce sees designers as “wizards” - it is their job to take account of who the customers might be in the future and design the retail experience around them. Designers should also know who the competitors are and where their product stands in relation to them. Bruce recommends a design that reflects, in order of importance, the business style, structure, strategy and, most importantly, spirit.  The designer of a shopping mall has the opportunity to create something unique by definition, and modern shopping centres market themselves on these unique characteristics. Retailers need to work within this framework as well. Bruce asks what elements of the world’s iconic designs such as the Smart Car, IPOD, etc. were accidental? Very few indeed, these designs were created through detailed research of the future market and this approach should be the same when designing retail spaces. He would like to see the designers role, in creating a shopping centre as anywhere else, go beyond aesthetics. Bruce gives the following example: a major store operator had set core “family” values whereby their business was to sell clothing to families. They asked Bruce to “redesign us in totality, change the entire company, from low-end to high-end retail”. This created a problem because the proposed overhaul was contrary to the original spirit of the company, but it was also contrary to its structure, which had been set up to deal with low-end buyers rather than cater to the needs of the higher-end segment. After three years the luxury store was closed because they couldn’t change the company’s core mentality. As “sorcerers of design”, those working in retail spaces should be aware that their design must be a representation of the business and the business processes that lie within. For the design to be appropriate and achieve its aim, a complete understanding of the needs history and concept must come first.  understanding the customers needs Obtaining information on basic demographics of a shopping mall is very difficult, says Wright. Even when this information is obtainable, finding out whether the mall or the retailer’s offering is appealing to that demographic is equally difficult. This is why companies that produce visitor tracking software are becoming so popular, says Yannick Kennel, General Manager, FootFall Asia. As a retailer, these technologies can help give data on the potential of your store and as a mall owner they give information about what is the ideal tenant mix. As the adage goes, says Kennel, what you cannot measure you cannot manage. Sensors that perform such processes as colour video processing can give measurable information about how many people have entered or exited the building or store. Real time reporting over the internet can help building managers react to immediate changes in traffic flow and year on year reports can help assess the effectiveness of marketing campaigns or, in the case of building owners, leasing strategies. In one case at Vivo City Singapore, FootFall installed 180 sensor cameras and found after the first month that around 15:00, 16:00 and 20:00 there was hardly any traffic in the store. After looking into why this was happening they discovered that the manager during these hours was not properly trained. For example, at 20:00 the staff was assigned to housekeeping instead of helping customers. The problem was remedied and the downtime was reduced. According to Kennel, an understanding of traffic and demographic allows you to: • Know your average spend per visitor • Justify your rental levels - thus you can turn to your landlord and renegotiate your lease • Measure the return on your marketing efforts • Optimise your sales efforts • Benchmark yourself against peers in the industry • Look at the bigger picture in shopper trends Charlie Lin was responsible for opening high end shopping malls in Shanghai that now boast some of the best and well-heeled traffic in China. When he was responsible for centres such as Plaza 66 the trend was towards a large floor plate of 1.2 mil square feet. The management of the space was a key component and while design, good location and effective marketing may get a location off the ground, Lin believes it is only through ongoing improvement and management that success can continue. Lin found that after attracting one “big brand” it became much easier to attract the rest. In the end he answers the question posed by developers looking to get into China: “understand the retailers needs, simplify the process for them and recognise their budget constraints.” In the new age of retail development in Asia, developers and retailers in new and emerging markets are going to have to learn the same rules, and hopefully profit by them. RFP
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Key title: RFP magazine
Abbreviated key title: RFP mag.
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