ACROSS | The European Retail Real Estate Magazine

Center Management

The leisure formula

Gastón Gaitán, Manager and Director of theleisureway. Image: theleisureway

In every article that I read, in every discussion that I have, and in every forum that I attend, everyone continuously repeats that the times of those traditional concrete boxes full of standardized shops are over.

By Gastón Gaitán

That is completely true, but in many cases I see that their visions still remain as empty as these words by the time strategic investment decisions need to be made. The metamorphosis has begun and will continue unstoppably until the sector is transformed into the new paradigm. The one who does not transform or does not do it correctly and in time will become a dying breed.

The business has changed. Now, the business model design and analysis are not straightforward processes where you first do your research, then locate the right piece of land, and later try to shape a very good looking and functional building to attract tenants to fill those boxes and sign ambitious long-term leasing contracts. That mathematical formula with sum effect does not work anymore. The old puzzle is broken and the new pieces are made of different materials. It is a more complex but exiting challenge.

The challenge is to write and tell the appropriate story on each project through leisure-thinking; storytelling becomes essential because we have to develop a completely new relationship with our visitors. This disruption of the paradigm has brought us an incredible frame of mind because all the historical rules are not working anymore. We cannot fix or develop a shopping destination by thinking exclusively about generic issues like location, demographics, competition, catchment area purchasing power, etc. The approach to primarily use this kind of information to prepare and fill the commercial leasing dossier to invite tenants is now like wistfully watching TV with a Smart-TV in black and white.

Demanding visitors

People first! Today, our potential visitors have become very demanding. It’s not easy to convince someone to pay attention and lift his body from the couch to come to our locations. These guys will only move if they have a very good reason to do so, that is, if you have a very good story at hand to tell. Remember that for purchasing goods we can all select the best option from a wide range with just our fingers and without taking one step forward? So, what can we do? Well, there is not one answer, each case requires a complete made-to-measure approach and therefore we must develop the skills to read and interpret the market in a completely different way.

Leisure-thinking is not just design. It also means design to influence behavior. Content today matters, people are expecting much higher experiential returns from their visits, for their time. And time is of the essence. They want more, they expect more and therefore the selling proposition must not be based on offering quality materials embedded in beautiful architectural designs combined more and more with entertainment brands’ prefabricated offers alone. It is perfectly fine that customers are asking for having great moments for them and for their loved ones, but they are also demanding a genuine purpose for visiting, inhabiting and living that proposed environment.

In order to generate more and sustainable traffic, combining entertainment with food and beverage is not enough, that strategic move will not make a difference in few years. We have to work very hard on building relations that bring a completely different character to the environment and to just cater all the members of the family as a whole is not enough anymore. The programming and curation of the space has to address each customers’ behavior individually. We are in an era of the individual, and each person wants to be taken into consideration. Today, the internet ensnares each individual with virtual customer experiences, Therefore, they are expecting this and much more when they come to our shopping environments.

Image: theleisureway

Projects with visionaries

Maintaining a long-term relation with our clients demands much more flexible centers that must be able to adapt quickly to different situations, not only from year to year but also to different seasons, creating momentum and singularity at the same time. We have to leave room for the next step, and not build constrained spaces that act can become straitjackets for new ideas that will come in time. We are facing a tremendous amount of changes in the industry. Many different new formulas are being developed, bringing many new uses and experiences to our locations. The challenge is to give the right answers to all these different users who look for a communal space to spend their time.

In each project there is a visionary, somebody who develops ideas and can identify, envision, and express the willingness of others with words. These people are in high demand, now more than ever. There are new stories to be told and the copy paste machine is broken. We are in transition from the standardization of spaces to the curation of them, and the mission that needs to be accomplished is singularity, the unique selling proposition that will conquer the hearts of our future clients.

When I was in 5th grade I had a lot of discussions with my Math teacher. She was trying very hard to make me think straight and remember all these mathematical formulas to deliver the expected results. I was very bored, it didn’t interest me at all to think that way. As you know, if you would like to achieve a different result, you have to take a different approach. She disagreed and said I was just dreaming. Today, I still like to dream. I still have those moments where I am just picturing a place, creating it as I walk through it, feeling that I can build that magical place with each step, that place I would like to go, stay, and come back to. When I started to work in the shopping industry many years ago, I felt a bit like with my 5th grade teacher, and of course I didn’t fit in that well. People very rigorous with their numbers, all a commercial dossier showed me was a lot of info that wasn’t interesting for me. Instead I was looking for that place that I created in my mind. Here, as in many other fields, numbers show the business model rather than guide the design of it. That is the great mistake and the reason of many failures.

I’m sorry, but I have to say that there is no mathematical formula one can incorporate in the design process… I know, you are disappointed. You were expecting something different to bring expected results, at least on paper, numbers that add up and a clear argument to make the right decision. I can do this and I get it. As an investor, you need to know your return or at least forecast the outcome of your effort. That is understandable, but remember that without a story those numbers may lie.

Follow ACROSS

Download

fb-art 150

Share this article
Center Management

A Breath of Fresh Air at Westgate Shopping City

A change in ownership has taken place at the mall in Zagreb, Croatia. Denis Cupic, Head of Asset Management, comments on the background as well as the effects on tenants and customers.

The Footfall Creator

Holistic consulting and servicing of retail real estate is becoming increasingly important in the industry. The Austrian Centerprise Group has dedicated itself precisely to this purpose, even beyond national borders.

„Security is not a taboo subject“

A new collaboration with SES promotes cooperation between Austrian police and retail. Shopping centers in general are focusing more and more on security.

Delightfully epicurean Portugal

Food services and drinks represent more than 70% of retail investment in this southern European country.

Starting a new life with a new name

The “Freeport Outlets” have become “Affinity Outlets”, “Puerto Venecia” is now called “intu Puerto Venecia”. These are just two current examples that show that retail properties are regularly rebranding themselves.

Developers continue to push pop-up spaces

With these spaces, they give online brands the opportunity to launch a test balloon and find their footing in stationary retail. But also car companies like Tesla and Volvo work with this retail format.