A New Year for Marketing?Digital Editor
Happy New Year everyone – let’s hope it holds strong growth and prosperity for us all!
The holiday period did have some unwelcome news for our community – there was the sad passing of Jean–Louis Solal
widely regarded as the father of the modern shopping centre in Europe. It prompted me to write this blog, especially as he emphasised the importance of good marketing and positioning in successful schemes. Could 2015 herald a new era for real estate marketing?
Each week, and at every conference around the world, the buzz is about strategies to improve centres and high streets. What’s the latest trend? New innovations? Crucially, where are Asset Managers are seeing results? All of this is of course marketing – creating, adjusting, positioning and adapting the asset to be more appealing and boost trade, be that from shoppers or investors. Global competition, tourism and the internet makes these decisions more important than ever before; but all pointless if not communicated promptly and clearly to the market.
2014 was an important year for marketing because it was the first time we could see the real-estate sector’s tangible response to the threats of online retail and shifting consumer behaviours. Proactive asset managers such as within TH Real Estate’s Herald Fund grasped the nettle in several of their centres – notably in Italy and France – and made significant changes to their traditional models in order to strengthen their centres, and with impressive and positive results to prove it. Elsewhere across Europe, other landlords such as Unibail Rodamco emphasised their commitment to those services that are impossible to replicate online – notably food – with its Dining Experience and Fresh! concepts. Their market share and leases signed leapt in the months following the marketing launch, and showcased the listed European company’s ability to move quickly in response to market forces.
As we look ahead into 2015, the emphasis still seems to rest on leisure, but not just food and beverage. It’s now broadening to include wider leisure services. This shift is being fuelled by the abundance of cheaper space available to many operators like gym and cinema operators who need more space than your average fashion retailer. Landlords recognise that together with the inevitable rebasing of rents post 2007 coupled with a surplus of secondary space (such as upstairs or basement), these service providers and leisure operators are extremely good for business. We expect to see lots more gym and cinema deals in 2015.
Out of town there are reports of the major UK supermarket groups – notably Tesco – reassessing their property portfolios, and that many of their under performing stores could be transformed into ‘dark stores’ where online purchases of fresh groceries and other goods are packaged up ready for despatch. In extreme cases we may see these store sites eventually turned into leisure – but this may take place over a number of years not months.
The key driver within real estate marketing is brand strength. Having a clear impression of your asset’s brand strengths (and weaknesses) is essential if you are to introduce any of these often lower rent – sometimes loss-leading – leisure enterprises. It is their impact on the centre’s dynamic, your customer dwell times, repeat visits and carry-sales that you crave. It is also an important shift in tenant mix that could generate additional income by attracting a new and different customer base – perhaps one that’s currently shopping with your competitor. Strengthening and repositioning your brand can also open up a new type of retailer who’d hitherto dismissed your centre from their requirement list – driving rents.
As Solal emphasised, all these extraordinarily complex layers of activity need communicating effectively – and with the pace of change moving so quickly, it’s best reviewed frequently with good intelligence. We hope that 2015 will bring more recognition for marketing and the latent value it can add to commercial real estate assets.
Owner & Managing Director – firstname.lastname@example.org