LOGIN

Shopping areas need a luxury hotel feel — soft chairs and even a fireplace. Adele Shevel reports

25 September 2005

SOUTH Africans already spend a lot of time in shopping centres, and now property managers are getting ready to turn these places into a home away from home.

"It’s critical, now more than ever, for shopping centres to create a sense of place, a destination and a home away from home," says Anthony Stokan, an expert on consumer behaviour.

This is in contrast to many of the homogenous, uninspiring retail environments.

"We’re suffering from the sameness syndrome. Malls are looking tragically homogenous," he adds. Stokan was speaking at the South African Council of Shopping Centres conference, held in Cape Town this week.

"Competition for the consumer is overwhelming," says Stokan.

"We must romance our customers. It’s not about being all things to all people, it’s about being special."

It involves in-store displays and creating memorable environments. He advocates use of the common areas to create a luxury hotel feel — putting in soft chairs and possibly even a fireplace.

Among his words of advice to retailers is to simplify choice for customers, especially in the over-35 age group which, he says, suffers from "complexity nervosa" — they have too much choice and are paralysed by this choice.

This does not apply to the youth, who live "in the makeover decade" where anything can be made over "from foreheads to kitchens".

Delegates to the conference describe shopping centres as curious animals. They are among the most evolutionary and malleable of all properties. They have taken the place of town squares, with gatherings and, in some cases, art and photo exhibitions.

Some go so far as to say that shopping centres rejuvenate shoppers, delivering a sense of wellbeing, surrounding the shopper with rampant consumerism and an ordered and controlled environment that creates a new reality for a few hours. This is more commonly known as retail therapy.

Stokan, in his book Naked Consumption, published earlier this year, says today’s most successful retail players have a flair for creating clear expectations of the retail experience.

They deliver, and then exceed those expectations. Stokan notes that low prices are not always the key to retail success.

"A retailer can thrive by creating a strong brand that responds to consumer desires, creating a satisfying experience for its customers at every point of contact."

Stokan uses the example of Apple computer stores: the Apple store aims to generate excitement.

On weekend nights some stores have DJs spinning tracks on iPods, and all have free workshops on how to get the most out of Apple products.

Some of these workshops have been taught by big-name instructors such as director Spike Lee and singer Moby.

"Not giving customers an exceptional in-store experience is like sending an invitation to your competition to lure them away," writes Stokan.

Stokan, in a whirlwind tour of several shopping centres in his visit to the Cape, says he was impressed with the standard. He highlights home-decor stores particularly, which are, he says, well designed and offer great products.

"They’ve created idiot-proof environments with a mix that makes customers feel very sophisticated when making decisions."

Simon Susman, CEO of Woolworths, says his sense is that malls remain critical to the business, especially for younger clientele and families. But the slightly older and higher-income markets are pushing Woolworths into convenience outlets.

Meanwhile, Woolworths offerings linked to some of the Engen garages are some of the highest returns in unit sales anywhere in the world. Online shopping is still a tiny business.

"We don’t know if we haven’t done a good job, or it just hasn’t caught on; 99% of our business is done out of shops."

A critical problem is that of security in shopping centres, and Susman urges the retail and property world to address this issue together.

"It can’t be that shopping centres are a soft target." Retailers and property owners are looking back over the past few fat years with smiles on their faces, but are wondering whether the massive growth spurt is set to continue.

Over the past few months, the big retailers have all announced big capital expenditure plans, driven by the steady pounding of consumers’ feet at shops and centres around the country.

Chris Lawrence, president of the SA Council of Shopping Centres, says another 860000m² of shopping space is under construction or on the drawing boards.

"There has to be some blood-letting" and sees potential casualties on coastal resorts.

"We do spawn shopping centres because of lack of planning and control," Lawrence told Business Times. He says centres recognise they need to remodel and update themselves because of this.

But, after hearing the calls for more retail space at the conference, he says he does not think there is an oversupply at the moment.

Tony Taylor, deputy managing director of Truworths, says the company is desperately looking for more space.

Professor Brian Kantor, economist and investment strategist at Investec Securities, is bullish about the economic prospects and says more growth at even higher levels is sustainable.

He says the actual borrowing levels of South African consumers are relatively low in world terms but, with growing confidence in the economy, the consumer spending spree has got legs.

Spending by blacks particularly has fuelled the consumer boom as many emerging buyers are earning more and using their greater spending power.

The South African shopping boom is not unique. Mike Kercheval, president and CEO of the International Council of Shopping Centres, says the retail industry worldwide is booming with $8-trillion in world sales last year.

Kercheval says three-quarters of all sales (excluding cars) took place in shopping centres in the US. There is still huge untapped potential in more developing countries, especially in Asia and notably in India and China "where the shopping-centre industry is in its infancy", and where it is more acceptable among the younger generations to pursue wealth than it was for the older generations.