Westfield reveals what’s next for retail
14 Jan 2020
Shopping centre group Unibail-Rodamco-Westfield has unveiled what it predicts will be the biggest retail trends for the next decade in Europe, including that 2025 will be the experience tipping point in retail when more than half of retail space in stores will be dedicated to providing experiences.
The ‘Westfield How We Shop: The Next Decade,’ report explores how consumers in the UK and across Europe will be shopping by 2029 and has revealed five key trends that will create “seismic shifts” within the retail industry from upside-down retail to anti-prescription, as well as self-sustaining stores, retail surgery and locally-morphed retail.
Myf Ryan, chief marketing officer Europe and group director of brand and strategic marketing, Unibail-Rodamco-Westfield, said on the emerging trends said: “The important role of the physical store is changing and retailers need to enter another decade of reinvention to remain relevant.
“Retailers that lead on sustainability, devote more space to experience, provide free-range browsing online and in-store, deliver accurate product recommendations based on science and think local will reap the benefits.”
The trends have been identified after asking 15,700 consumers across ten countries in Europe including the UK, France, Spain, Germany, Austria, Sweden, Poland, the Czech Republic, Italy and the Netherlands, what their needs and wants are when it comes to retail.
Retail Trends - Upside-Down Retail
One of the key trends to emerge is the concept of ‘upside-down retail,’ which states that the entire retail model and people’s shopping habits will turn on its head by 2025, with 59 percent of consumers expecting more than half of retail space to be devoted to experience rather than product.
By 2027, 75 percent of shoppers expect to see this, explains Westfield’s report, with 81 percent of customers globally adding that they are willing to pay more for experiences. Shoppers it adds want to see more creative, health and gaming experiences in-store, as well as ones that help them to improve themselves.
Westfield adds that the retailers of the future will need to trade in the business of upskilling as well as selling, as 30 percent of city dwellers are seeking workspaces and educational opportunities within stores, due to the rise of co-working across Europe. In the UK, 37 percent want more creative experiences in-store, while in London this increases to 41 percent.
Matthew Drinkwater, head of innovation agency, London College of Fashion, University of the Arts London, added: “The development of immersive technologies, especially within the retail space, has allowed consumers to form richer and deeper relationships with brands and their products.
“We have seen across various categories – fashion through to entertainment, storytelling has become a ‘must’ for the consumer and are shaping new business models and consumer interactions. Whether that be through technology, how a space is curated or how it can be made personal to them. This new approach is shaping the future of retail, enhancing the consumer’s enjoyment, but also the minimum expectancy.”
According to Westfield, retail is entering the age of anti-prescription, where frustrated shoppers are rejecting prescriptive retail experiences based on inaccurate recommendations, in favour of free-range browsing and impulse shopping. 52 precent of UK consumers are frustrated, rising to 69 percent in London, showing that retailers need to stay close to their customers through data.
Some of the frustration is down to retailers limiting choice, as nearly 72 percent of UK consumers said that they want to browse full ranges, not curated edits, which means that online stores that use algorithms poorly to restrict choice may find themselves struggling in the future.
To keep attracting consumers, the report reveals that smart brands that use their online space to showcase the full range, and their physical stores to “surprise and delight”, could become tomorrow’s star performers.
“The shoppers of tomorrow want more free-range browsing experiences in physical retail environments. Impulse shopping in these spaces is set to become the new normal. Consumers are also requesting that more of their loved online brands enter physical retail spaces, with the likes of streaming services Netflix, Spotify and Tinder all proving popular,” explains the report.
Westfield shares its vision for the future of retail with its ‘How We Shop: The Next Decade’ report
As consumers become more conscious of their ecological impact on the planet, they are looking to brands to help them create a more sustainable future, explains Westfield, and research shows that more than 290 million shoppers expect the stores of tomorrow to prioritise being self-sufficient.
The survey reveals that 78 percent of UK shoppers want retailers to do more to address environmental concerns, with 70 percent adding that they want brands to make products in-store whilst they wait or that are created in-store beforehand to minimise waste, marking a trend for factory stores, and 67 percent want to ban single-use plastics.
Moving to a self-sustaining store model requires significant infrastructural change for big businesses, the report notes, as they will need to reimagine their business models from the bottom up, to create factory stores that are 100 percent self-sustaining. The whole supply chain will collapse down to the point of sale.
The concept of self-sustaining stores will be easier for smaller, nimble start-ups, which the report state will “put pressure” on larger businesses to change.
The store of the future will extend this self-sufficient approach and will include allotments on the roof to grow ingredients, a 4D-printing factory and studio allowing design teams to create product on demand. In addition, shoppers will be assured of zero-waste packaging solutions that will happen in-store and will even be able to pay for goods through points programmes where customers are rewarded for their positive eco-friendly practices.
Rental retail is also a growing trend amongst European consumers, with nearly half of all UK consumers wanting to rent some products rather than buying them, while more than three-quarters of British shoppers want to rent items for their home and almost half of all Londoners would rent fashion and beauty items, making London the fashion rental capital of Europe.
“Forget retail therapy - the future is retail surgery,” explains Westfield, with retail outlets becoming more like doctors’ surgeries, diagnosing shoppers precise needs based on fact, not presumption. To succeed it notes that retailers will need to take personalisation to the next level by acting like doctors and using science to diagnose precise needs, as over a third of UK shoppers look to stores to offer personal consultations in order to identify the perfect products for them.
Retail spaces of tomorrow will become community hubs, providing everything from local brands to nostalgic community experiences, as 69 percent of UK consumers said that they want shopping centres to reflect the people who live in the area, with 50 percent adding that they would prefer local brands to well-known ones.
Shoppers also desire more locally-flavoured experiences, particularly nostalgic ones, with 42 percent of shoppers wanting future retail environments to offer nostalgic social clubs, such as gaming cafes for board games and social events for the local community. The report adds that currently, 34 percent of Londoners go to shopping centres to socialise more than shop.
Christophe Cuvillier, group chief executive officer, at Unibail-Rodamco-Westfield said in a statement: “The ‘Westfield How We Shop: The Next Decade’ report is one of the largest European studies of consumers’ retail habits and is an industry first. Understanding customers’ needs today and tomorrow is part of our commitment to driving the industry forward and ensuring we provide the ultimate destinations for our visitors to enjoy and our retailers and brands to thrive in.”
Helen Dickinson, chief executive of the British Retail Consortium, added: “Retail is an exciting, dynamic and diverse industry which constantly pushes the boundaries of creativity and experience. As identified in the ‘Westfield How We Shop Report’, retail needs to cater to changing consumer habits and as a result the next decade will be the most innovative to date.
“With 2019 showing the worst sales growth on record, new thinking will be crucial to reversing this trend. The 2020 climate will also provide retailers with the opportunity to deepen relationships with their local communities.”
The launch of the ‘Westfield How We Shop: The Next Decade’ report follows the roll-out of Westfield, across Continental Europe, where ten flagship destinations and two future developments were rebranded in France, Poland, the Czech Republic, Sweden, Germany and the Netherlands in 2019 with more locations to follow in 2020.
CGI image of the Self-Sustaining Store courtesy of Unibail-Rodamco-Westfield