Transforming the Retail Landscape: Customer Experience is the New Reality
Over the years, the retail sector has undergone a significant transformation from a simple brick and mortar to a leisure and shopping destination. Today malls are no longer primarily for shopping, they have become the heart and soul of communities.
It is no longer a revelation that COVID-19 has profoundly altered the physical landscape. After suffering a huge setback due to the pandemic, the retail sector has recovered quite well. Various industry reports underscore the renewed market confidence. According to the CBRE report, Class A shopping malls and high streets doubled the absorption rate in 2021 compared to 2020.
Further, BCG-RAI in a report mentioned that India’s consumption which was growing at around 12% before the pandemic entered negative territory during the pandemic but has now recovered to exceed the level. pre-pandemic growth at 17%. This is an encouraging sign for retailers and brands to continue with their expansion plans.
Trading with the tendency to win
A host of global trends, namely changing demographics, increased urbanization and COVID-19 related safety measures, are coming together to propel shopping malls to change the role they play in people’s lives. Now, when consumers visit shopping malls, they are looking for multi-sensory experiences, while keeping comfort and hygiene in mind.
Additionally, sustainability concerns are also causing some consumers to prefer mixed-use developments where they can live, shop and work under one roof instead of driving to different locations. Not to mention the e-commerce revolution and the rise of digital technologies that are profoundly reshaping consumer expectations and shifting the function of sales areas towards useful and entertaining customer experiences.
Safety comes first, but convenience matters too
The world may be reopening, but COVID-19 remains a real concern. In a post-pandemic world, consumer behavior is constantly changing and they are likely to prefer places serving as a single destination for dining, shopping and recreation built in a safe and secure environment. Innovative methods of customer service, facilitating a holistic experience and emphasizing customer hygiene and well-being are likely to build consumer confidence and ultimately contribute to customer loyalty. .
Design-centric and innovative format
Today’s most innovative malls look nothing like their predecessors. Many shopping malls being built in urban areas are open and fully integrated into the landscape. Even enclosed malls are now incorporating a more natural vibe into their design, installing plants and trees, wooden walls and floors, waterfalls and lots of glass to let in natural light. Such elements help shopping centers to better integrate into their environment.
Adopting the “omnichannel” path
For the uninitiated, Omnichannel generally refers to brands and retailers that have both a physical and digital presence. Embracing “omnichannel” has become an integral part of the strategies of all successful brands and retailers around the world. However, omnichannelization in shopping malls today is different from the original concept. Customers receive information about deals and offers not only in the physical store, but also on their mobile devices. The digital transformation of retail is not bad news for malls. On the contrary, it presents new opportunities for shopping centers to engage consumers throughout their decision journeys.
One-stop shop: the more the merrier
Shopping malls are moving in a different direction, away from commoditized shopping experiences and towards an expanded value proposition for consumers. Innovative malls incorporate value-added elements with substantial square footage allocated to Family Entertainment Centers (FECs). Think concerts, play zones, food court, high-end gourmet restaurants, art centers, spas, fitness clubs and farmers markets – all in one space. The idea is to make malls the center of the local community – a place to share quality time with friends and family. Some malls make more use of temporary and flexible spaces that can accommodate different stores over time. Pop-up stores and kiosks provide customers with a sense of immediacy and excitement for potential customers.
People don’t visit malls just to eat and shop, what they take home are happy memories or experiences. Customer engagement is essential for shopping malls to reach out to the public with a unique experience by staying in tune with the lifestyle of the customers. Themed decorations, events, activations, live music, entertainment concerts, and child-related engagements are a few key elements that keep visitors intrigued for repeat visits. Such customer engagement activities help malls create a friendly environment where a customer feels a sense of celebration and belonging. Improving the customer experience is key to staying ahead in today’s competitive environment.
The retail world is changing drastically, but shopping malls can remain a center of attraction if they see themselves as purchasable, customer-facing entertainment providers. The way forward will require effective communication, thoughtful planning and creative execution, because the “new normal” in retail is not temporary: it’s here to stay.
(By Abhishek Trehan, Executive Director, Trehan Iris)