Coniq has published its top 10 retail destination industry predictions for next year.
1. E-commerce creates billion dollar shopping centres. Large mall operators with extensive portfolios that embed e-commerce into their business models next year will generate a billion dollars in sales by 2025. This will deliver true value for consumers and brands by consolidating demand, creating efficiencies in delivery logistics and in product return, and monetising growing ecosystems of customer data.
2. More industry consolidation as the fallout from COVID-19 closures continues to expose financially weaker players. Portfolios will get dissected and the good bits picked off. The industry will see the emergence of innovative entrants, looking at discounted properties to test new types of niche, consumer-specific retail destinations.
3. Mixing it up. Mall spaces will become more diversified than ever before, and repurposed as co-working, office, residential, entertainment and logistics hubs (due to the need for “near to centre” logistics infrastructure). This expanded retail mix will force mall operators to work harder to attract and keep tenants as the latter have more choice.
4. Outlets become the role model for mall operators: The outlet business model evolves to be a fundamental part of the omni-channel retail landscape, continuing to grow into new markets. As the Outlet serves as the ideal new brand discovery and experimentation environment, brands continue to invest in the channel to drive customer acquisition with mall operators leading this evolution for the industry.
5. Mall operators start vertical integration. Mall operators will buy and integrate retailers, key partners and technology suppliers to build and enhance their business models Successful operators no longer see themselves as landlords, but as retail platform companies that operate and engage shoppers in store and online.
6. Shopping centres enter retail. Mall operators will launch their own direct to consumer branded products. This strategic move to dominate their own supply chain will serve to collect greater levels of insight into consumer behaviour and preferences as well as to create new revenue streams.
7. Customer location becomes the place. The smart use of permission-based location data to personalise customer engagement will be a top investment priority for mall operators as they focus on communicating and winning over local shoppers.
8. Paid loyalty programs sweep across the industry as mall operators look for new business models and money to fund the creation of great customer experiences. Paid loyalty programs guarantee revenue for companies as they invest in transformational business growth initiatives next year.
9. Sustainability returns. Shoppers will renew their interest in buying at retail destinations that care about the environment, and have shown a commitment to operating in a sustainable way. Mall operators will invest in hiring heads of sustainability to ensure they deliver on consumer expectations.
10. PropTech start-ups consolidate. As mall operators embrace digital transformation, and double investment in technology in 2021, start-up software companies will struggle to compete as mall operators prefer to purchase from larger, stronger providers.
“2020 has been a challenging year for mall operators but it has also been one of much needed change with executives re-positioning their companies for future success,” said Ben Chesser, CEO of Coniq, the Total Customer Engagement Company. “From what we have witnessed with our clients, and the significant investment in technologies they are making, we predict the industry will witness a renaissance in 2021, including a massive spike in growth in the second half of the year as operators bring to market new business models and services that engage shoppers.”
