The rapid growth of e-commerce will completely transform the retail market within the next few years. Shopping centres will need to adapt to changing consumer needs in order to stay in business but experts believe that many will not survive. Booming online sales, on the other hand, present a great opportunity for further growth in logistics. Members of the retail panel at CEE Property Forum, moderated by Andreas Ridder, Chairman CEE at CBRE, discussed the future of the business.
The rapid growth of e-commerce is a global phenomenon. Online shopping is quick and convenient, that’s why it is most attractive to customers of Generations X and Y. Currently 25% of shopping is done online in the UK but this figure is estimated to grow to 50% by 2020, said Tim Davies, Head of EMEA Industrial and Logistics Agency at Colliers International.
Péter Karai, Sales Director at Futureal believes that e-commerce will not completely eliminate shopping in classic shopping centres. The way we buy things is changing but there will always be demand for offline shopping, he added.
One of the most important changes is that shoppers are becoming less patient. They want their products delivered to them as soon as possible which is a phenomenon shipping companies have not fully adapted to. Less patient customers present a great opportunity for providers of logistics space. According to Martin Polak, Senior Vice President and Regional Head for CEE at ProLogis, online retailers rent up to seven times more space than traditional retailers in order to make sure that they have the storage capacity needed to have products available at all times.
Shopping is a part of social life, said Zsolt Müller, Director of Retail and Consumer Markets at KPMG. What owners of shopping centres can do is invest in infrastructure in order to make shopping more attractive, i.e. making malls more accessible, providing free parking, offering cash-free payment opportunities and so on.
Experts of the retail panel at CEE Property Forum 2017 agreed that well located and dominant shopping centres will have better chances of retaining customers, but opinions differed on the future of smaller malls. According to Tim Davies, secondary shopping centres will not survive on the longer run.
Karel Zeman, Head of Investment Operations Poland at CBRE Global Investors believes that location is one of the keys to survival. Shopping centres need to be more flexible and shopper need to be entertained. Secondary shopping centres may survive future changes by transforming into logistics centres, he added.
