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Immersive Experiences the Future of the Shopping Centre Retailweek Connect Reports

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Immersive Experiences the Future of the Shopping Centre Retailweek Connect Reports RetailWeek CONNECT In association with REPORTS Immersive experiences The future of the shopping centre RetailWeek CONNECT REPORTS RETAIL WEEK FOREWORD JameS KNOWLES HEAD OF COMMERCIAL CONTENT OPERATIONS oday’s consumer buys into new set of criteria; does this centre offer experiences. Not just within the the immersive experience the modern stores they visit, but also from customer wants? Retailers have to base retail destinations themselves. Understanding this is key. What store openings on a TAs a result UK shopping centres do today’s consumers expect from the are rising to the challenge by giving experience shopping centres provide? new set of criteria consumers more reasons than just retail And how will these expectations evolve? to pay a visit. What are centres doing, and what can they – does this centre Look no further than intu. The do, to meet these demands? offer the experience shopping centre operator will open its To find out, this Retail Week report, first Nickelodeon park at intu Lakeside, produced in association with intu, has consumers expect? strengthening its appeal to the family- surveyed a nationally representative pool day-out market. of 2,000 UK consumers to find out. This is a clear indication that shopping Over the coming pages we will reveal centres are about much more than simply how the shopping centre landscape has shopping. changed, bringing you the exclusive While not every centre is going to insights from our survey, identifying feature an all-singing, all-dancing fun examples of centres leading the way, and park, it does mean retailers now have to arming retailers with key takeaways on base store-opening decisions on a whole what they need to consider. RETAIL WEEK CONNECT: IMMERSIVE EXPERIENCES Head of Creative Insights 020 7715 6167 Production Manager Contributors Rebecca Dyer, Nicola Harrison 020 3033 2837 [email protected] Paul Moran 020 3953 2676 Mark Faithfull, Dan Harder [email protected] [email protected] Commercial Head of Commercial Production Editor Account Director Content Operations Abigail O’Sullivan 020 3033 2940 Lars Fiddy 020 3033 2953 Cover image: ION Orchard James Knowles [email protected] [email protected] shopping mall, Singapore 2 | March 2018 In association with PARTNER COMMENT CONTENTS CHAPTER ONE THE CHANGING LANDSCAPE Millennials and Gen Z have new expectations The market is now driven by the experience economy F&B and entertainment will be key CHAPTER TWO DAVID FIScheL WHAT THE CONSUMER WANTS chief EXecUTIVE, intU We asked 2,000 UK consumers what they want from shopping centres 41% of those surveyed see a visit to a shopping hen we rebranded to intu in 2013 we resolved to put centre as a day out the customer experience at the heart of what we do, 74% of those surveyed use the F&B on offer at a recognising that the role of shopping centres was shopping centre evolving. Eating out, sharing experiences with friends Wand family, and being entertained within the shopping centre CHAPTER THREE would become the new norm. Insight from Barclays on the rise of the experience economy INspiriNG ExpEriENCE shows that the leisure sector has doubled in size between 2011 intu Watford acquires space to expand its offer and 2016, contributing around £200bn to the UK economy. At and add a cinema and bowling alley and a intu we’re investing in our centres to create retail and leisure selection of F&B destinations that offer a day-out experience, whether that’s to CityLife Milan opens as the largest shopping shop, eat or play. At intu Watford we’re adding 400,000 sq ft district of its kind in Italy of space to deliver the UK’s biggest in-town retail and leisure intu Lakeside invests in new F&B and a family- destination complete with an IMAX cinema, Hollywood Bowl, focused Nickelodeon centre and a variety of eateries and retail brands that are new to Watford. Even without the all-singing, all-dancing leisure tenant, the CHAPTER FOUR shopping centre of the future needs to deliver a compelling experience by simply thinking like a hospitality brand, from DRAWING CONCLUSIONS world-class service to events, as well as working with the tenants The developer mindset is focused on experience themselves to ensure they deliver great in-store experiences. New schemes will follow global shopping It’s a combination of the evolution of the physical space and the centre trends attention to detail that can make memorable experiences every Digital integration will be inevitable day for customers and help retailers flourish. METHODOLOGY s well as identifying experience Retail Week surveyed a nationally shopping centre experience trends within the shopping representative pool of 2,000 UK today, and what they would centre realm, this report includes consumers in February 2018 to gauge like to see from those experiences A in-depth consumer research. what shoppers expect from their in the future. March 2018 | 3 RetailWeek CONNECT REPORTS The big destinations simply get bigger, more all-encompassing and almost resort-like in their offers The Aquarium of Dubai Mall, Dubai 4 | March 2018 In association with CHAPTER ONE THE CHANgiNG LANDSCAPE n Millennials and Gen Z have new expectations n The market is now driven by the experience economy n Food and beverage (F&B) and entertainment will be key it by the inexorable rise of online has 19 arenas, and chief executive Martyn retail, the shift to an experience Gibbs says the retailer has been encouraged economy, the surge in food by its popularity. Game views Belong as and beverage (F&B) spend and a key part of its future. In February 2018, Hthe growing influence of tech-raised Sports Direct acquired 50% of the rights to millennials and Gen Z, shopping centres the Belong IP for £3.2m and entered into a have changed beyond recognition. loan agreement to accelerate its roll-out into Not so long ago, some of the UK’s biggest some Sports Direct shops. mall operators were still predicting that Colin Flinn, regional managing director F&B would not rise above 6% of the total at intu, says the shopping centre operator shopping centre mix and concerns were has seen a rise in “competitive socialising” being raised about the risk of having a – activities where people compete but cinema attached to a mall. also have fun with their friends. He adds Fast-forward to 2018 and many local that, moving forward, intu sees more centres have been revived and rebadged opportunities around gaming and movies. It for fast and functional convenience, while has already trialled a successful Christmas the big destinations simply get bigger, more VR experience at intu Victoria Centre and all-encompassing and almost resort-like partnered with Nickelodeon last summer to in their offers. create an AR game within its malls. Lewis Allen, director at agency Portland Retail resorts Design, says that, with a lot of retail work Indeed, Martin Breeden, development dedicated to capturing the consumer, an director at UK and Spanish shopping element of that will inevitably be digitally centre specialist intu, says the company led. But he believes it is the narrative – has coined the phrase “retail resorts” for the most advanced of its mixed-use locations, especially those in sunny Spain. Many of the UK’s top-performing cinemas are leisure anchors within centres, F&B is nudging beyond 20% in some of the newest schemes and fresh leisure options are being devised and executed all the time, Fresh leisure options are being from upscale takes on mini-golf to state-of- devised all the time, from upscale the-art entertainment centres, such as the upcoming Nickelodeon attraction at takes on mini-golf to state-of-the- intu Lakeside. Retailers are also embracing the strategy. art entertainment centres In 2016, Game launched its Belong fascia, a dedicated space that sits inside its stores where gamers can pay to participate in a series of multiplayer bouts. Belong now March 2018 | 5 RetailWeek CONNECT REPORTS not the medium – that counts, and that physical spaces must tell a story. As far as destinations are concerned, these changes are best reflected in the TRENDS biggest shopping centres. Breeden cites the intu Trafford Centre in Manchester as “very much a model of the new destination” – pointing to features such as a cinema, Sea DriviNG Life Manchester, Legoland Discovery Centre, F&B zip wire, mini-golf and close by Top Golf, 5 Chill Factor and Airkix – and intu Braehead with the UK’s longest indoor real snow ski slope and events arena. Many Chinese and Southeast Asian CONVERGENCE centres operate with 25% or above Expect more leisure operators to offer F&B dedicated to F&B, while the Middle East’s tie-ups with specialists as the pick-and-mix, indoor ski slopes, giant aquariums and Deliveroo-style concept comes to leisure. focus on family days out has become a blueprint for Europe’s largest centres. In the US, New Jersey’s American Dream is nearing completion with a leisure mix that may well reshape the North QUICK-SERVICE COMEBACK American market. A number of quick-service brands have Closer to home, Spain has also been refreshed their offers after the challenge of mixing retail, F&B and leisure. Breeden casual dining, with higher product quality says one of the best examples is intu’s and the operational capabilities to handle Puerto Venecia in Zaragoza, Spain high volumes. New and differentiated offers (circa 2.2 million sq ft), which is set for McDonald’s and, in the coffee sector, around a lake. Starbucks, are good examples. Another is Xanadú in Madrid (1.2 million sq ft and co-owned with TH Real Estate), which has an indoor ski slope and will add Nickelodeon and an aquarium.
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