By Derek Rossel
Amidst retail market headwinds in the UK, not least fueled by everything Brexit, an increasing number of retailers and investors are looking across the Irish Sea to the Republic of Ireland, where things are looking a great deal brighter. Underpinned by a strong and stable economy, the retail sector on the Emerald Isle is, well, glistening.
Irish consumers have much of the confidence that the British currently lack; the Irish economy grew by 8.2% in GDP terms in 2018, while unemployment fell to the lowest level in a decade, and personal consumption saw an increase of 3.4%. This is reflected in the retail spend, not least in the Dublin region, which has continued to exceed the national levels with a 4.5% growth YoY in 2019. According to a recent report by Retail Ireland and Ibec, the retail sector has increased by 3.4% in value and 5.3% in volume in 2019. A major contributing factor is the growing tourism industry; tourism spend in Ireland increased by 6.7% YoY in Q2 2019, while it went up by 8.7% in Dublin.
The retail market is, in other words, flourishing. However, surprisingly large parts of Dublin have long been underserved in terms of quality retail; brands lack the modern retail and F&B space to meet future needs, while customer preferences have evolved, and they are now demanding new and exciting concepts and brands. This is particularly true for one area of south Dublin, despite it having the most affluent catchment in the country. That is why Hines is developing Cherrywood Town Centre, located at the heart of the largest urban center development in Ireland. The 350,000-square-meter town center scheme will be comprised of residences, workplaces, community facilities, and a next-generation retail center, and when it opens in 2022, it will offer something completely new in terms of convenience, place and experience.
PwC Ireland recently published a report on Irish retail and consumers, in which they took a close look at what the Irish consumer want from retail. Some of the highlights of the report described customers now wanting – and being willing to pay for – a seamless experience that merges together online and offline retail, and the increased importance of the so-called Experience Economy, where retailers and landlords measure return on investment in terms of Return on Experience (ROX). The report also showed that physical stores are still highly relevant to Irish consumers, with 54% still shopping in-store on a daily or weekly basis, which, interestingly, is up from 41% two years before.
With Cherrywood Town Centre being developed from the ground up, it provides Hines with the unique opportunity to listen to the needs of the community, customers, and retailers and to deliver a fit for purpose, next-generation retail center in Europe.
In Ireland, as elsewhere, perhaps one of the key competitors to traditional malls is online commerce. This presents a need to better cater for the convergence of offline and online sales, with purpose-built features to support omnichannel retail on the physical customer journey. At Cherrywood Town Centre, this need is accommodated by the provision of convenient customer vehicle drop-off and pick-up locations and Click and Collect facilities that are well-coordinated with back-of-house logistics areas. This focus on the future also extends to the ability to accommodate digitally native retail and F&B brands, with the potential for dark kitchens and home delivery facilities to further support these operators.
In the age of online shopping, convenience and navigation matter more than ever. We are ensuring that accessing Cherrywood Town Centre is as convenient and frictionless as possible. Seamless integration with two major motorways, priority access for public transport, and a light rail network running through the scheme all supports this, while a simple retail racetrack layout and effortless parking arrangements also support this focus on convenience.
A strong emphasis will be placed on things that cannot be replicated online, which includes places and concepts that create social connections within the scheme. To that end, we are targeting an exceptional tenant mix for both day and night-time economies, focusing on mixed-uses, convenience, place, and experience. There will be a strong representation of community, F&B, leisure, and entertainment elements to attract different kinds of people at different times of the day for different reasons – all ensuring that Cherrywood Town Centre will be a vibrant retail destination.
We call it Ireland’s Future of Retail.