What consumers expect from malls and retailers?
Category General News
Globally, Omni-channel retailing focused on the seamless approach to consumer experience is arguably the biggest topic currently.
Many retailers are trying to find out what mix of online/in-store and e-commerce works best for consumers and they try to build a strategy around that.
Ultimately, retailers want to give customers their brand experience across all channels, according to Peter Gold, CBRE: Managing Director of EMEA Retail Cross Border Retail.
Gold will be attending the Annual Congress of the South African Council of Shopping Centres to be held on 20 -22 August in Cape Town and he will speak about Customer Behaviour. His presentation at the congress will coincide with the launch of the Broll Retail Consumer Survey 2014 – conducted by Broll Property Group, an affiliate of CBRE - a leading global commercial real estate and investment firm.
This survey, conducted by a third party, IPSOS was based on a sample size of 1 000 individuals undertaken throughout South Africa in order to understand the retail consumer market in the country.
One of the themes that came out of this report is that consumers in South Africa think about the overall experience of the shopping destination and not just about the choice of retail offerings.
But more importantly, when it comes to where to go shopping, consumers think about many factors: mall cleanliness tops the list (being most important), followed by security, price of products, availability of coffee shops and free Wi-Fi among others.
Gold explains that globally, wherever consumers shop, they expect landlords to get the basics right - they want value for money, a secure and clean centre, convenience and parking facilities.
“The experience comes with the brands, the types of retailers, size of store and the differentiating factors such as Wi-Fi, restaurants and the social aspects of shopping,” points out Gold.
According to CBRE’s latest survey “How Consumers Shop 2014” consumers also want to visit shops that regularly host events such as fashion shows/movie launches and those with a variety of coffee shops to enhance their mall experience. However, this is not as important as the basics.
The CBRE report reveals that many consumers have seen improvements in their shopping centres over the past three years, with countries such as South Africa, Turkey, Romania, France and Poland seeing the most improvements.
Gold says shopping centres in most of these markets (excluding France) are relatively new in comparison to the rest of Europe and Central and Eastern European markets, especially Turkey have witnessed many new centres open in the last few years.
Similarly these markets are also under-represented in terms of international retailers compared to the top retail destinations of the world so it is only natural that in terms of new brands coming in they would see activity, he says.
Online retail challenges
Furthermore, the CBRE survey shows that consumers are reportedly comfortable using multi-channels for researching and buying process, however, in South Africa, Belgium, Hungary and Spain, they prefer going to an actual store compared to buying online.
According to Gold, online retail poses challenges - retailers have to create a seamless experience across all channels and some are still trying to figure out how best to do this while in some markets, online is still a fairly new territory.
“Consumers have the same expectations of an online experience as in store, so retailers need to ensure they give consumers the same experience with their brand across all channels,” he says.
Delivery costs and logistics are also challenges as consumers do not want to pay for delivery nor do they want to have to wait for that delivery when they can go into a store and pick it up for free and have the product there and then. It’s not country specific but retailer specific, points out Gold.
South Africa and Africa retail markets
In South Africa, we are starting to see a lot more retail centres in previously disadvantaged areas outside of main cities and towns, notes Broll CEO, Malcolm Horne.
“Perhaps one thing that could be improved is that when these centres are built, public transport becomes a part of that because consumers who would normally use these centres take taxis. They spend money on transport thus reducing their retail spend,” according to Horne.
Referring to the Broll Retail Consumer Survey 2014, he says South African consumers have over the past three years seen great improvements in shopping centre renovations and addition of international retailers in some centres.
Asked what impact international retailers have on local retailers, Horne says consumers now have a range of goods and services to choose from, however, because international retail brands are aimed at more affluent areas and shopping centres, we don’t think this affects the entire retail market in SA.
In Africa, while there is a need for sophisticated and formal retail, a lot of investors still replicate the South African model. Africa is a diverse continent, and markets differ, as such, countries have to be looked at individually, says Horne.
“Retail in Africa was/is traditionally in the form of high street shops and mostly informal trading and now with the rise of the so-called emerging consumer, we are seeing retail developments coming up in Ghana, Nigeria, Kenya, Rwanda and Kigali.”
Horne says it points to a need and readiness of consumers to embrace this type of retail format.
However, as to whether this consumer story is sustainable is a bit of concern because Africa’s population is still young and youth unemployment in some parts of the continent is very high and so this could curb consumer and retail spending.
Horne points out that African consumers know more about global brands than retailers often think. They are connected and are aware of international fashion trends and prices.
A lot of these consumers are young and travel often to cities such as London and New York and would undoubtedly buy what they want either while visiting or can simple travel to shop.
“For a retailer wanting to target this type of consumer, a copy and paste model of what works in SA is not ideal, they want quality at a good price,” adds Horne.
Author: Broll