Today we speak with Grégory Pertus, Shopping Center Manager at Focus Bydgoszcz from G City Europe. Grégory dedicates this interview to make a general view of the Shopping Center sector, focusing on topics related with the way physical shops have changed and adapted their strategies to evolve in a challenging environment, where external factor and online commerce have influence their work.
G City Europe Center Manager highlights the importance on investing on new technologies and mentions some of the most useful ones. We also talk about the new client and their changes on behavior and preferences, and the need of adapt marketing strategies to communicate with them.
Despite al the issues and factors that have characterized this last years, Shopping centers have evolve in an incredible way and Gregory is positive
Do you want to know more about his opinions about shopping center sector? Enjoy this interesting interview.
Shopping Center Interview – The future of physical shops
First of all, analyze the current situation… How are you living it?
Current situation is quite challenging because of obvious external factors like the war in Ukraine which has an impact on brands operations, the high inflation and energy prices pressure especially here in Poland which restrains the consumption and make our customers more prudent and very sensitive to promotions. In a consequence we as shopping centers have to adapt to changing situation, concentrate on the right tenant mix for changing customers preferences and also their economic situation. We also adjust our marketing approach working much stronger on creating and helping our communities. We all in the sector have to face an unprecedent situation.
Covid influenced a lot the market and its dynamics, stopping many investments on the market or changing the investment plans. Brands which were planning to enter the market are much slower in taking decisions and wait for more stabilized situation in this part of Europe. Customers are getting back to the shopping centers but the way they spend money is different. More careful shopping, more planning, price sensitive. Looking for good options. Big trend – circular fashion is emerging.
We observe a steady improvement in recovering the figures from 2019 which keeps us optimistic for the upcoming time but we look in detail into numbers, analyzing all data to adjust quickly to market preferences.
People look more into their structure of spent and take thoughtful decisions. Getting out of home and all connected with time spent and socializing is also observed and our center is a great spot to do that.
“Shopping centers have to adapt to changing situation, concentrate on the right tenant mix for changing customers preferences and also their economic situation”
What is the biggest problem or weakness that a shopping center has to face?
There are different challenges and each local market might have them very different but to name few:
1. Energy costs – huge increases affect not only us owners but also tenants.
In our case due to our ESG strategy implementation we are I might say way ahead of many centers.
We undertook several actions in recent years to reduce the consumption of energy like the installation of PV panels, CO2 sensors in ventilation ducts, modernization of BMS, LED technology in the whole property etc. We will continue our efforts in this field as we see a great improvement. This is crucial to optimize the cost level for our business partners and also fulfill with our ESG goals.
2. Development of smaller formats- retail parks
For few years, actually starting from Covid period the intensive development of retail parks was a certain challenge for the owners of bigger and standard malls. It forced us to reinvent our approach to management, marketing and investment in order to keep the attractivity of our assets.
3. Different brands approach to recovery after Covid
Brands also undertake different actions to adjust after Covid. Some act quicker adjusting the offer, client service, operations, for some it takes much longer time to take decisions and evolve. This will probably in the next few years be verified by the market who will survive and who will fail.
The war in Ukraine had also some consequences for us with the unexpected flow of people, especially in Poland. We had to adapt and somehow shape the amenities for them, offering help during the first wave by organizing goods collection and information points. Today we still have a close cooperation with local NGO’s and we can see Ukrainian refugees making a part of the social life and retail Polish landscape.
We keep an eye all the time on e-commerce looking how it connects also. We see a big connection between brick and mortar and ecommerce. It is always a challenge but also an opportunity for us. We see adoption in this field. Our tenants did great efforts for years to adapt their shops, introducing new technologies, new possibilities of purchase/returns making the link between on-line and off-line. We can observe this on a daily basis. Returns from online in our centers also create further purchases.
What role does technology play?
Technology has a crucial role in analyzing the results for shopping centers mainly turnover and footfall. Thanks to new technology we can better understand our customers, their habits and tailor our communication or offer to them.
The footfall counters, heating maps, Wi-fi sensors or chatbots are now standards in modern shopping centers. The AI is looming and sooner or later will probably be a part of our business as well.
New technologies introduced in physical shops allow to give customers unique experiences like virtual cloakrooms or on-line advices inside the store but also helps us to personalize the offer.
Even the digital screens placed on the common parts of shopping centers for advertisement can now have a personalized offer which is quite surprising and gives a unique experience.
Some of intelligent parking system allow to identify the car plate thanks to cameras for a continued tracking giving new opportunities for shopping center teams. This kind of tool may be integrated within a loyalty program to offer special discount or prizes to a certain group of clients. The payment for parking directly by mobile phone within an app is also one of the way to make the experience more convenient. This is what we implemented recently and our customers see all the benefits of that.
In fast-food chains for example the screens dedicated for ordering help the owners to improve their results and cut the costs. It’s proved indeed that the average amount of a ticket sale from an order passed through a screen is slightly higher than the amount made traditionally face-to-face over the counter.
Another good example of the important role of the technology is the use of full-secured free parking for bicycles. Just using a city-card or a phone you can easily have access to this amenity and we know the share of people coming to our asset by bike is constantly increasing.
Modern technology can also be a useful tool for technical purpose like detection of water leaks, wireless readings of meters, level of CO2 etc.
During Covid time restrictions, we use the footfall sensors and a special app to control how many people were at the same time in the mall to be in line with therefore local health requirements.
All those technologies are evolving, new appear and this is our role as shopping center managers to be aware of the cutting-edge tools which can improve our results, our understanding of the market and built a real added value for both owners and customers.
How does it help a Shopping Center in the current situation?
First of all it helps us to maintain the center, make it more efficient in terms of energy consumption and costs, more effective in managing service teams, personalize our communication and offers for customers. Thanks to modern technology we can reach precise groups of clients with lowers costs and attract them to return to our center more often.
“Technology has a crucial role in analyzing the results for shopping centers mainly turnover and footfall.”
The advertisement market has changed a lot and nowadays the communication has to be shaped and adapted to a special group of clients. The traditional press is not existing anymore in our budgets, the weight of OOH is shrinking but google ads, reels on FB, stories on Instagram, cooperation with influencers and more generally digital ads. are the real core market.
I would say that digital campaigns are even more exigent for us because they have to change faster. We need to be kept updated all the time, that’s why we cooperate with specialized marketing agencies who know how to optimize the expenses.
How do you achieve customer loyalty now?
We are using a modern CRM tool which gives us a full picture of who is our customer: gender, age, location, preferences, habits etc. We tend to collect the data from our customers in each event organized, to be able to further communicate with them.
The communication is more direct now when we built our own data bases and use our own media channels like SMS, push notifications or e-newsletters which an important role.
The customer loyalty is a constant and systematic work of our marketing team. The customer has to see real and significant benefit.
In Focus shopping center in Bydgoszcz we have the #maszokazje loyalty program which gives e.g. special promotions and additional free hours of parking for members.
Another way to achieve customer loyalty is to make constant market researches so we know who is our customer and we can organize events which will fit to their needs.
Reassuming, we are placing an important part of our marketing strategy on the customer loyalty. All those actions have a crucial goal which is the increase our footfall and
What do you think this new customer is looking for?
Definitely customer in the context of inflation in our location in Bydgoszcz is looking for good and attractive promotions. This is the basic needs but going further, coming to a shopping center the modern customer needs to be surprised. A good tenant-mix and full spectrum of amenities are not enough nowadays to fully satisfy our customers. Take for example the youngsters and Z generation. Their expectations can be drastically other than millennials, not mentioning even baby boomers. In my opinion the key is to reach to each segment.
It’s important to have a good tenant-mix which includes not only fashion but also entertainment, gastronomy and health services like gym.
Today customers are more sensible and aware to locality, pro -eco, aware of trends. They are seeking for authenticity and true experiences in respect of environmental and ethic laws.
How can we offer them an optimal experience?
First and most important – the right tenant mix which needs to evolve towards changing customer needs
Stay close to communities and they allow us to thrive with a good yearly program of attraction, loyalties and entertainment.
Support all basic and additional amenities
Appropriate and attractive marketing events are a huge lever for an optimal experience. In recent years very popular became all kind of gaming contests, regional fairs with local products, meetings with well-known locally influencers etc.
Are you optimistic about the future of this sector?
Definitely yes, because we can see people coming back to shopping centers after two tough years of Covid restrictions. 2022 was a transition year . People care more about spending time out of home and socializing and we offer good environment for that changes in consumer habits require changes also on our side and we are acting fast responding to this needs. The new retail is modern, dynamic, includes technologies, is omnichannel and evolves constantly. We have to get used to this dynamics and act the same way in managing the centers.
What do you think the mall of the future will be like?
Independently of the time we are living, the owners of shopping centers have to adapt very quickly to a changing environment or even be a step ahead anticipating the changes. The mall of the future will certainly have to be an optimal mix of real and digital solutions in the shops but also in the common places. A good access and amenities for bikes, scooters, electrical cars will be necessary.
Surely future malls will be greener and will have to take into consideration all the regulations from conception, through realization and day-by day maintenance. We can observe that certifications like BREEAM or GRESB and more generally ESG goals are evolving and raising the standards the owners have to face. Concentration will go toward mix-used projects for the convenience of the population. People want to save time, money and to have quick access to a wide range of services and entertainment.
One of the aspects we cannot avoid, in Europe in particular, is the ageing of population. This is a big challenge and malls will have to adapt for senior’s needs and expectations implementing health centers or dentists but also from the operating point of view to improve installations and amenities.
For sure there will be an increasing share of food/restaurant, places to socialize and meet in the tenant-mix.