2015 Trends and PredictionsDigital Editor
As the year comes to a close, the Innesco team is excitedly looking forward to what 2015 has to offer! It’s vital for us to recognise and monitor trends. Here is our list of the most intriguing forecasted trends to look out for in 2015. We have included various predictions from retail experiences and technology advances to housing and office real estate.
PWC reports the retail industry is “becoming more complex and changing at an ever-increasing speed”. The PWC 2015 Global Trend report listed strategic outsourcing, targeted collaboration and the importance of technology as integral developments for retailers to understand. The following information connects these three trends. Meredith Smith, Senior Consultant at GDR Creative Intelligence, states that shoppers spend around 15 per cent more when they are comfortable and relaxed. Smith believes retailers can make customers more comfortable with their purchases by merging physical and digital store experiences. This way, customers are in control of their data and using it to their advantage. Also, retailers must focus on improving their buying environment to reflect the consumers’ life and create a deeper engagement through e-commerce.
For in-store relaxation, retailers should consider parking, store entrances, convenience of getting to the location and drinks available. Smith stresses that mobile apps are helping retailers to understand their customers’ tastes, as well as improving the in-store purchase process. For instance, Lynee Wood, the Head of Customer Experience at John Lewis, reports that their ‘Click and Collect’ service has driven growth, allowing John Lewis to expand regionally. Furthermore, John Lewis stores’ famous in-store customer service is not lost online by allowing their loyal customers to chat with in-store representatives. This omni-channel approach is imperative for older, as well as younger demographics. PWC reports “Older generations are becoming more service, and experience [oriented]”. Thus, it is imperative to create a relaxing and simple experience for customers.
On the other hand, PWC reports, “Younger generations are more likely to approach goods, services and experiences as an integrated continuum”. Digital technology within centres will create this effortless experience for younger consumers. WhatsYourTech reports that in 2015 retailers will implement the digital experience in their bricks and mortar establishments, specifically using iBeacon and Kinect technologies. Apple’s iBeacon reinforces Meredith Smith’s emphasis on comfort by offering customers with the option to download the mobile app to receive coupons and sales notifications based on their proximity to the retailer. Following a successful three-month trial, Land Securities property Trinity Leeds shopping centre has engaged iBeacons throughout the centre to include the customer service lounge and Trinity Kitchen with plans to integrate the car park facilities. Microsoft’s Kinect technology, which analyses and recognises human movement, is being considered in shopping centres, as well as online retail platforms to superimpose clothes by size and colour on customers as a virtual fitting room.
PSFK believe the idea of “Experiences not Products” is the future of retail in 2015, such as product immersion in the form of expert-led test-drives outside of the store. T-Mobile, the mobile phone carrier, provided consumers with the opportunity to “cheat on their carrier” by trying the iPhone5 on the T-Mobile network for 7 days. Also, PSFK favour living showrooms that partner experiential involvement and like-minded partnerships to immerse customers in their products’ ecosystem. In the US, Uber and Lay’s crisps united to garner participation around Lay’s crisp flavouring contest with Uber delivering Lay’s picnic baskets to riders.
Experience-led shopping and leisure centres will also be popular with investors as the retail market and real earnings continue to recover. Savills forecasts that, due to a 5 per cent rise in DIY sales and multiplatform access, retail warehouse parks will experience “an up-tick”. Also, stable high streets and popular shopping centres will out-perform, especially those in the centre of the UK, around the M25, and local multi-let estates close to affluent suburbs. Mindful Money favour retail warehouses for providing retailers with efficient and affordable space, and convenience stores for offering ‘small basket shopping’.
Considering the forthcoming general elections, rise of interest rates and unequal rental growth across the country, 2015 is shaping up to be an interesting year for commercial property investment. The reduced level of availability means London will continue to experience strong rental growth. Savills expects risk-averse international investors to maintain levels of strong demand, stating “the City of London [is] still looking comparatively cheap, and some edge of core West End submarkets are currently starved of new-build office stock”.
However, other non-London regions remain early in the cycle, but are expected to experience interest from investors as £21.4 billion non-London asset purchases were made this year, the largest proportion of asset purchases outside of London since 2006. Furthermore, the office sector is expected to continually grow in the top nine regional markets of Manchester, Glasgow, Bristol, Cambridge, Cardiff, Leeds, Birmingham, Edinburgh and M25, as well as in outliers Aberdeen, Reading and Brighton.
The Centre of Economics and Business Research (CEBR) believes the housing real estate market may be looking up as the economy recovers. Across the UK, average house prices are expected to dip by 0.8 per cent with the most substantial decline in the South with a 2.6 per cent. Scott Corfe, a director at the CEBR, states, “We are not anticipating a crash. The market is adjusting after getting ahead of itself at the start of 2014”. This projected slip in 2015 won’t last long as prices are projected to rise by 2.6 per cent in 2016, 3 per cent in 2017 and another 2.7 per cent in 2018. Following the projected theme of the year, technology will also help homebuyers and estate agents alike. More estate agents will integrate full property, 360-degree virtual tours for buyers.
It seems the UK real estate industry is in for an exciting year. We are eagerly anticipating how these projected trends turn out and for new ones to emerge. Happy New Year from the Innesco team! We look forward to seeing you in 2015.
Taylore Hunt, Account Executive