Your recent leader column brings to mind the Mark Twain quote: “The reports of my death have been greatly exaggerated.”
As an industry we are often rightly accused of ignoring the end customer. Landlords frequently focus on their tenants (and largely on the covenant), not on how people’s needs are met by the location, space and that occupier.
Consumers are becoming more demanding and discerning. There is a bifurcation in need between convenient/local and experiential retail. Occupiers and locations that are stuck in the middle need to examine how to move one way or the other.
Local centres don’t need to be small but they do need to deliver on service, diversity and an increasing drive to localism and the story behind the product. Consumers desire to have the product or service, not just a product or service. No one is inspired by their regular Starbucks these days and why would you buy from a physical store when you could get it delivered to you – perhaps by a drone?
Slashing rents and other occupational costs isn’t going to create a wholesale high-street revival, but nor should such moves be ignored as a symptom of the malaise. How many retailer administrations have truly been a surprise when we reflect on their trading proposition?
Find out more - Retail trends: the high street paradox
The onus is on both sides: occupiers have to have a relevant, engaging store, value or premium, while landlords need to understand the purpose of a place and adjust their model, expectations and product to appeal to this.
The Greek agora became a meeting place to exchange ideas, goods, experiences, food and more. High streets weren’t always dominated by retail; it’s just that retail offered a better financial return, so it forced alternative uses out of town.
By focusing on what people want from a place, we can adjust the balance to deliver diverse, sustainable locations. These will still provide investment opportunities but landlords, asset managers and advisers will have to work harder and more collaboratively to provide more creative solutions, different leasing models, flexible locations, social engagement etc.
These are exciting times for those that want to embrace change. Those that don’t – given some of the comments in your article – should tread carefully.