23.06.2021
Future-proof retail needs continuous transformation
The Corona pandemic continues to have a firm grip on the retail and shopping center industry. The situation we have been in for more than a year now demands everything from retailers and tenant partners, investors and operators, but also from customers. And the industry will have to deal with the effects of the lockdowns for quite some time to come. The fact remains that leasing today has to focus on more than just retail. It must explore new avenues, secure the portfolio and find and try out new concepts, offer innovative space management and diversify the tenant mix - while already keeping a firm eye on the time after Corona.
Landlord & Tenant: Partnership solutions essential
The importance of a permanent and cooperative exchange with tenant partners cannot be overestimated. Many retailers feel their existence is threatened, are thinking about closing locations, and are streamlining their branch networks in order to counter the economic effects of the pandemic. Constructive approaches are therefore all the more important in order to implement viable solution concepts individually and quickly: At ECE, this has been achieved well: With regard to Germany, we were able to work out solutions together with more than 90% of the tenants affected by the temporary closures ordered by the authorities during the first lockdown. And in the second lockdown, too, we have in many cases been able to make and already implement a 50/50 support offer for rents - all with the aim of helping tenants through this difficult period.
Retail leases: more flexible solutions are needed
In the future, more flexible contractual solutions will also be increasingly in demand, precisely to give new and innovative concepts the opportunity to try out and grow - and thus bring fresh ideas to retail locations. Or to offer tenants and landlords more flexibility - because, especially in strong and particularly sought-after retail locations such as well-established shopping centers, the term is only one of several criteria for a successful partnership. It remains important to reach balanced solutions with all parties involved. More than ever, tenants and landlords are dependent on each other.
Digitization retail accelerated by Corona
In addition, the process of digitization in retail and centers has also gained significant momentum thanks to Corona. On the one hand, it is important to implement and further expand future-proof concepts for linking online and offline, which were already in development before the pandemic, as quickly as possible. The overriding goal: to offer retailers multiple ways to reach their customers. In this respect, it is also essential for retailers today to integrate online into their business processes. Shopping center operators in particular can provide them with optimum support in the form of technology and expertise. At ECE, for example, we set up a dedicated department years ago that consistently drives forward and continues to expand digital innovations and connected commerce services, such as our "Digital Mall".
Shopping centers are places of leisure and experience
Even if many centers do not currently have the visitor numbers they had before Corona due to the restrictions, you will be more in demand than ever as lively and dynamic marketplaces after the pandemic. According to a study by Simon-Kucher & Partners, customers miss brick-and-mortar retail: 90% of respondents look forward to being able to visit local stores again once the lockdown is lifted. 60% want to use the local shopping trip to meet friends and family. And the phases of the lockdown have also shown us how quickly customers are returning to brick-and-mortar retail. Customer interest continues unabated. So new and innovative ideas, exciting store concepts and gastronomic offerings are still in demand. Shopping and strolling as a social experience was and is sorely missed by many customers.
Despite or because of COVID-19: Boosting the appeal of centers.
These customers expect a great ambience and shopping centers as places of leisure and experience, which always offer new and exciting additional offers. That's why it's important to continue developing retail locations consistently and with even more emphasis: eSports arenas, escape rooms or trampoline parks, innovative new store concepts and comprehensive refurbishments, but also service offerings such as health or beauty centers and shopping centers as mixed-use assets that combine shopping with living, working or hotels are important components of shopping centers of the future.
We have been implementing many of these for a long time, the realization of other ideas was accelerated by Corona, and yet other concepts had to be completely rethought in a very short time. Because one thing is clear: stationary retail and shopping centers must continue to change and constantly reinvent themselves - then they can and will be successful in the future.