By Christine Hager
The fact that brick-and-mortar retail must re-imagine itself and mount a strategic response to e-commerce and the aftermath of the coronavirus pandemic is beyond a shadow of a doubt. The fundamental solution to problem is universally known: digitalization. Nevertheless, the industry is still struggling to deal with the inevitable transformation in a consistent manner. Thought processes need to go beyond the mere establishment of online stores. Bolder approaches are needed, and retailers must not be left to fend for themselves.
Technological development is advancing at an incredibly rapid pace. Brick-and-mortar retail has the best chance of combining its advantages, which have no equivalent in purely online business, with digital offerings. Combining the physical shopping experience, from the social function of interpersonal encounters to actually touching and handling products, with the convenience of digital features must be the driving objective. No online store can offer that. Mobile apps that provide real-time information about product availability and guide customers to the right shelf are just one example, and the display of alternative offers when goods are sold out is another. Chatbots that automatically feed answers to questions about individual products to the visitors’ mobile devices are already being used these days, thereby alleviating the workload of service staff.
Further opportunities open up just one level of magnitude higher, be it a shopping center or a retail park: For example, joint digital marketplaces that network individual stores or markets can be created, thereby enabling visitors to get an overview of the specific, various offerings, in advance and in the comfort of their own homes, via their desktops or mobile devices. Apps can be used to facilitate local navigation on site, they can provide the locations of stores and pick-up stations, or they can offer information with regard to the parking situation, including the location of gas stations or charging stations for electric vehicles. AI-based apps make it possible to determine the best times to shop locally in cases in which opening hours vary, and they can simultaneously recommend the best public transport connections to ensure users reach their destinations at those times.
All of the aforementioned possibilities are contingent upon property owners and asset or center managers doing their part as well. First and foremost, a well thought-out concept must be implemented at each location – one that features an intelligent mix of entertainment, gastronomy, leisure options, and shopping opportunities – in order to provide visitors with a comprehensive experience at each location. Secondly, the necessary digital platforms must be in place and provide individual stores with the opportunity to connect to them. Fiber optics and 5G technology are prerequisites for digital solutions to work. As such, cities and municipalities are also called upon to ensure the necessary infrastructural expansion.
If all parties involved think and act in solidarity, recognize the technological possibilities, and embrace innovative approaches, everyone will be well served. Retailers can leverage their advantages in the brick-and-mortar, digitally enhanced segment to continue generating stable turnover. A digitally-inclined tenant mix enables property owners to benefit from secure rental income and high occupancy rates. Moreover, municipalities are reaping the benefits of the magnetic effect of attractive shopping areas, which increase the drawing power of their own districts and generate substantial tax revenues.