ACROSS | The European Retail Real Estate Magazine


Embracing the Winds of Change

Think of each of the new challenges you have had to confront over the past decade as a cloud appearing in an otherwise blue sky. From rapidly changing consumer behavior to e-commerce, each cloud cast a shadow on “business as usual.” On their own. none threatened to spoil the picnic. As gathering clouds darken the sky, however, it looks to some like a storm is coming.

By Bill Kistler

Bill Kistler, ICSC’s Executive Vice President and Managing Director of EMEA. Image: ICSC

Recent hurricanes may challenge the conviction of even ardent climate change deniers. Looking at the retail real estate sector, some analysts have concluded that the forces disrupting our industry represent a proverbial “perfect storm.”

Thankfully, the storm we face is not life-threatening. Nonetheless, it represents a business climate change that is equally hard to deny.

Converging winds of economic, social, and technological change are buffeting the retail real estate industry. Taken together, they transcend a normal business cycle and constitute more fundamental, structural change.

The impacts of such change are more global, unpredictable, and unsettling. There is little doubt we are past the point of a “return to normal.”

Much of the media would have you believe that place-based retail is in the throes of terminal decline. This narrative is fueled by stories of retailer bankruptcies, store closings, and the inexorable rise of e-commerce. It would be wishful thinking to dismiss the stories as “fake news” as there is obviously fire behind the smoke. Stories from the US, from department store closures to Amazon’s acquisition of Whole Foods, help fuel the flames.

Europe has suffered the contagion effect from the news in North America. There is a tendency by the media and global investors to tar all retail real estate markets with the same brush. The impact of this can be seen in the share-price declines of some European retail real estate companies.

Owners, investors, and developers in Europe point out the significant market differences across the Atlantic. Foremost is the fact that, by most estimates, the US has four to five times the retail space per capita as European markets do. The US shopping center model is also much more dependent on department stores and, when one of these anchors closes, the negative effect on the rest of the center can be considerable. Lastly, retail real estate in America is more heavily concentrated in suburban malls, while it is more urban and mixed-use in Europe.

This is not to suggest that the forces behind retail real estate “climate change” are not global. The winds of changing consumer behavior, rapidly evolving technology, and retail revolution blow across borders and oceans. Nevertheless, they impact different parts of the world in different ways. For example, in Europe, an aging and declining population poses an additional set of consumer behavior challenges to the rise of millennials that dominates the discussion in the US.

There are essentially three responses to the threat of business climate change. The first is to deny its existence and continue as if current disturbances were only a passing storm. The second is to panic and run for the exit. The third, and fortunately most common in our industry, is to see the challenges for what they are and use them as a catalyst for creativity and innovation.

The most successful people and companies in the retail real estate industry are the adventurous optimists. They embrace change, rethinking everything once taken for granted. They see opportunity in disruption. We all need to adapt how and what we do to profit from change.



fb-art 150

Share this article

Shopping Centers and the New European Data Protection Regime

The European General Data Protection Regulation (GDPR) will come into force on May 25, 2018. It harmonizes data privacy laws across Europe. Companies will be more accountable for their handling of people's personal data and it will change how they handle information about their customers, their employees and their suppliers.

Towards the new reality of shopping malls

All through the years, commercial models in the retail sector have been evolving in alignment with changing consumer habits. It goes without saying that these consumer habits have experienced a huge transformation lately, especially due to the rapid advance of technologies and the digital era. However, I don’t believe that the boom of ecommerce will lead to the extinction of most shopping malls.


Often, the viability of a retail destination is judged by its catchment and the affluence of the local residential population.

Retail Events – Raising the Game

Consumers have the technological freedom to shop whenever and wherever they want, and brands are expected to work much harder than ever before to maintain their loyalty.

Digi killing the bricks- and mortar star?

Digitalisation, especially in the form of online trade, often gets blamed for dramatic changes in the retail sector, and the death of the classic old-school store. One might think that it is putting an end to the brick and mortar star, currently shining brightly in the investment sky.


Since real estate has become both more professional and specialised, dedicated undergraduate and postgraduate real estate education has become widely available. Investing in optimising through ongoing professional development yields returns for both the individual and the organisation.