By Susan Hagerty Bonsak | CEO at Placewise Group
As we near the close of the year, it’s wise to reflect on the journey the retail and shopping center industry has undertaken in 2023. The waves of change brought on by the pandemic have receded, leaving behind a reshaped landscape where the resilient not only survived but thrived. This is great news and promising; centers that have been proactive and embraced the opportunities have proven that the structural upheaval has led to a revamp of the industry. And the centers that will lead the way in 2024 already have plans to incorporate relevant trends into their strategies.
Shopping centers have not met their demise; rather, they’ve undergone a metamorphosis. Far from being rendered obsolete by the rise of e-commerce, they have not only survived but are alive and energized. The secret lies in their ability to seamlessly coexist with e-commerce and omni-channel experiences. The way to achieve this is through digital synergy – combining physical and digital experiences which cater to the needs and expectations of shoppers. In Deloitte’s US Consumer Business Retail Outlook 2023, it pointed out that the leaders of the industry have made “meaningful progress on key, long-term initiatives” in several key areas, one being a “heightened focus on the customer experience and tapping into loyalty programs”.
Another lingering challenge which seems to be less pressing as we near the end of the year is the supply chain odyssey. Strides have been made in rectifying the supply chain disruptions of 2022, but echoes of still persist. The result is a reminder of the need for resilience and adaptive strategies in an ever-changing global landscape.
I think Deloitte summed up 2023 in their report in a concise manner:
2023 witnessed a surge in sustainability initiatives, with both retailers and shopping centers acknowledging their roles in the broader environmental landscape. The industry is increasingly adapting sound practices, from eco-friendly centers to green energy solutions. The pursuit of sustainability should not be merely a trend! It needs to be a fundamental shift in mindset – consumers can easily spot lip service and it is important that actions taken are genuine to earn their loyalty.
Not surprisingly, adaptability will remain a winning strategy! I don’t think this industry will ever – should ever – stop evolving! Market conditions will continue to change, and the winners in 2024 and beyond will be those who seize the possibilities. The ability to adapt and be resilient will be the forever be the defining trait of thriving shopping centers.
The shopping center’s role as a community hub is more critical than ever. Beyond commerce, creating a sense of community is not just a trend; it’s a cornerstone of sustained success. Multi-use centers that cater to the needs of the local and surrounding communities will have a strong advantage. But even single-use centers can build a sense of belonging to the same target groups though building relationships with their shoppers – this is not just a job for the individual retailer.
Economic recovery in 2024 brings a beacon of hope. As consumer confidence is expected to rise, the resulting surge in spending and visits to shopping centers will transpire. And in reference to the above, shopping centers that provide a safe, enjoyable, and community-driven environment should be poised to reap the benefits of the anticipated economic upturn.
Deloitte mentioned that investment in areas such as marketing and digital transformation are key for the future. We at Placewise work with customers across the globe and confirm that the leaders in the different regions we operate in use technology and data to support their overall corporate strategy.
This view is supported by McKinsey. In their article “Retail reset: A new playbook for retail leaders” they emphasize the importance of the use of technology combined with long-term digital and loyalty strategies. They write, “History tells us that retailers that take decisive action and focus on the long term outperform peers both during and after a downturn by as much as fivefold in total shareholder returns.”
The industry continues to be shaped by technology and digital innovation. Any industry guru will advocate for the adoption of relevant software and data analytics to streamline operations, foster tenant collaboration, and enhance customer engagement which in turn increases loyalty, frequency and spend.
Integrating technologies like augmented reality (AR) and artificial intelligence (AI) will continue to impact the retail real estate space and these tools will not just remain a recommendation but will become a necessity. Enhancing shopper experiences and personalizing communication should be at the forefront of retail strategies, and these tools can play a big role in achieving this.
Loyalty programs will continue to play a pivotal role, and this should not be a strategy followed exclusively by the retailers themselves. The forward-thinkers, the successful centers have already embraced this fact. The strength of the individual tenant’s efforts, combined with the power and draw of the shopping center, is very impactful!
The use of influencers will become even more significant. Influencers possess the power to sway consumer behavior and should be considered for the mall industry. Hustle Media point out that influencers collaborating with shopping malls drive brand awareness and foot traffic. The statistics are many and impressive, for example, that 84% of consumers trust content generated by influencers or that influencers contribute to +57% higher brand exposure.
Entering 2024, the retail and shopping center industry must not only adapt to change but proactively pursue the possibilities with open arms. The changes we saw in 2023 and the trends continuing or increasing in importance in 2024 will continue to propel the retail real estate industry forward. The future belongs to those who dare to transform, to those investing in relevant technology, data-driven decision making, tenant collaboration and digital transformation. It’s powerful and effective stuff and holds the key to the continuing success and revitalization of the industry.
Susan Hagerty Bonsak
CEO | Placewise Group
I had the pleasure and honor of starting at Placewise in October 2023. I am an almost-native Arizonian, but have been living in Norway and working internationally for over 3 decades. Placewise is an amazing SaaS company that offers a technology stack covering data management, advanced marketing and segmentation, automation and machine learning, data analysis and visualization, content management, and apps. We help mall management be more efficient and effective. Placewise proudly serves over 1,000 shopping center clients across three continents. Reach Susan via LinkedIn