Grigory Pecherskiy, Managing Partner at ADG Group. Credit: ADG Group
Feature | Opinion

A Look at Moscow

“Many people believe that commercial real estate projects should learn from theme parks and build upon the concept by planning events and other activities that make them even more of a destination than before.”

By Grigory Pecherskiy

For a while, the situation was quite challenging for us, and traffic still has not returned to pre-pandemic numbers, but market players are launching new tools to attract audiences. For example, we have opened rooftop terraces at our neighborhood centers, which allow people to play sports, watch movies, participate in master classes – all in an open-air environment. The original concept of “Mesto vstrechi” (Meeting Place) involved creating mixed-use real estate projects with community functions, but the rooftop terraces have taken things to a whole new level.

Local and small formats are continuing to gain ground – people need formats in which they feel safe and secure. The need for them to be part of a community is greater now than ever before – a fact that has become even more important and efficient than customer loyalty programs. Of course, this must be complemented by digital approaches – for example, neighborhood centers aim to build communities, and during periods of certain constraints, challenges, or trends, our “Mesto vstrechi” mobile app helps us tackle the issues at hand. It stretches the idea of community beyond the site, helps us to build relationships with both tenants and visitors, and has become an essential tool for security measures.

According to the data, even street retail demand is growing, and that category was probably one of the most affected by the lockdowns; since January 2021, demand has increased by 25%. At the same time, Moscow is currently facing new restrictions, which, of course, has an impact on businesses: Even fashion retail is moving online, so everyone is looking for new tools and ways to attract audiences. For example, many people believe that commercial real estate projects should learn from theme parks and build upon the concept by planning events and other activities that make them even more of a destination than before. I believe that the “people first, products second” approach can also be a game changer. Beauty brand Glossier follows that principle, designing stores that inspire people to find joy and confidence in their personal beauty style, with a customer journey that revolves around self-discovery and belonging. As a result, the company is in the process of opening its first physical store overseas, which originated from a temporary pop-up. I think pop-ups are effective tools that can be used to make sure locations are right and to offer new, engaging formats. French sporting goods retailer Decathlon opened its first pop-up store at one of our neighborhood centers and now offers open-air yoga classes as well as rooftop workout sessions for mothers with children.

I believe that the restrictions will also have a significant impact on the F&B sector. Regardless of what lies ahead, however, there are certain trends that will shape the industry in the near future. First, cafés and restaurants without terraces are doomed to fail. Not only does this have to do with providing nice outdoor atmospheres, but it is also a direct result of the pandemic – people feel safer being out in the fresh air, and everyone is tired of being cooped up indoors. That is why every single F&B tenant at neighborhood centers will have their own designated patio areas in addition to the rooftop terrace. Second, F&B tenants will be relocated to the first floor, which is where the entrance is – and it is also where the customer journey begins. Now more than ever, it is important to focus on customer needs and expectations, and, from what we have observed, essential needs have shifted from shopping to “spending time”.

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