Demand for commercial real estate has remained stable and is expected to preserve that stability, which also applies to real estate commercial terms, which were not affected significantly during the time of Covid and are also expected to remain stable
Shopping centres, just like retailers, need to intensify the shopping experience permanently and steadily, as the combination of experience and pleasure is the trigger to the act of buying. More retailers develop hybrid retail models, making better use of the opportunity provided by the internet to complement their physical store.
How is the growth of online sales channels reflected in demand for commercial real estate?
Physical shopping is not merely the act of buying. It is a much more sophisticated overall process: this is a journey, a unique experience, a combination of interactions that give you pleasure. You cannot recreate that experience through e-commerce, because you will not be able to have all those things together at the same level and at the same time.
In my opinion, ecommerce is growing on the back of the weakness of physical retail, and in that sense last year was a good barometer for retail centres, customers and retailers to realise that shopping is about emotion. Shopping centres, just like retailers, need to intensify the shopping experience permanently and steadily, as the combination of experience and pleasure is the trigger to the act of buying. Just as hypermarkets in the physical world are struggling to sell things other than basics, e-commerce should also become a place for just basic purchase process, provided we succeed in giving a unique flavour to physical shopping.
Retaining a position as market leader isn’t only about size and dominance, rather it is more about how relevant the products are for customers – the creation of value for customers. As regards demand for commercial real estate, it has remained stable and is expected to preserve that stability, which also applies to real estate commercial terms, which were not affected significantly during the time of Covid and are also expected to remain stable.
Retaining a position as market leader isn’t only about size and dominance, rather it is more about how relevant the products are for customers – the creation of value for customers
Do you expect online players to open physical retail outlets?
It will happen in time, since online and offline synergy will intensify, due to increasing customer awareness and therefore needs, and strong brands will need to have a physical appearance, just as the opposite is already the case. This will be an overall trend, but it will take time to invest in such a development and an innovative approach in the Balkans. Retailers also mostly have traditional business as a starting point, and only then expand to online operations.
What are the post-Covid industry trends and changes?
We can divide them into three categories: consumer habits changing due to them becoming more environmentally oriented; the synergising of online and offline retail; and the importance of loyalty programmes.
Retailers need to evolve alongside the consumer, in order to hold onto their brand relevance in 2022 and beyond, while brands need to show off their culture and purpose. Sustainability must be at the heart of their business model and across the entire supply chain, because consumers are more concerned than ever about sustainability.
After the boom of e-commerce platforms and digital growth in general, we should expect most shopping journeys to start online, but – on the other hand – that doesn’t mean they should always finish there. In many cases, an online shopping journey’s best and most convenient destination is a physical store. We are seeing more retailers develop hybrid retail models, making better use of the opportunity provided by the internet to complement their physical store. But physical shops still have no competition when it comes to shopping and the key is synergy to find the best mechanism – for shopping to start online, but finish in store.
At a time when consumer behaviour is changing fast, the customer experience is becoming more important than ever, so brands will have to work harder to emotionally engage with consumers and retain their loyalty. With the rising cost of acquiring new customers, loyalty will become the new frontier for growth.