Shopping centres are continuing to grow and increase their share of the retail market moderately this year. Rather than being viewed as a threat, online retail is seen as a useful sparring partner.
Pertti Vikkula, Chairman of the Finnish Council of Shopping Centres, wants to dispel the idea of a conflict between online retail and traditional retailers. The retail industry needs brick-and-mortar shops and online channels to support each other. In a successful retail chain, the online store is one important component of the shop network.
His view is echoed by Henrik Stadigh, Director of Sponda’s Shopping Centres unit, who takes the idea even further.
“Instead of referring to retail premises, I prefer to talk about places of trade. The growth of online retail is not a landslide that puts brick and mortar shops on shaky ground. Instead, the two retail channels support each other”.
Stadigh points out that consumers can compare products on a retailer’s website and then visit the physical shop to pick them up. Brick and mortar shops can create experiences for customers.
Large retailers are best at productising online retail, but the multi-channel approach is part of the future for all retailers. Online services are an important element of the retail concept.
In Sweden, the interface between online services and brick and mortar stores in shopping centres is being developed to allow customers to access product inventory data online to confirm whether a given product is currently in stock in the shop. Similar developments are also in progress in Finland.
“Our objective is to make it as easy as possible for the customer to get added value by using a shopping centre’s services online,” Vikkula says.
According to Vikkula, customers today purchase approximately half of the products they buy in brick and mortar shops, even if they have originally browsed the products in an online store. In certain product categories, such as footwear and sports equipment, it is important for consumers to try the product on and to see it first-hand before buying. However, payment may be made online.
The total sales of shopping centres grew last year to EUR 5.8 billion (+5.0%) and the number of visitors reached 356 million customers per year (+6.4%). The growth is explained by new as well as renewed shopping centres such as Citycenter and Kaari in Helsinki, Ainoa in Espoo, and Capri in Lappeenranta.
The comparative sales volume, excluding new shopping centres, decreased by 0.5 per cent from the previous year. However, the share of shopping centres of the total retail market grew to 15 per cent.
During the past five years, over EUR 1 billion has been invested in Finland in the renewal of existing shopping centres and the development of new shopping centres.
There are also several new shopping centres currently in the pipeline in locations such as Pori, Hämeenlinna, Lahti, Ikaalinen and Oulu, with a combined floor area of approximately 147,000 square metres. Expansions will also add another 50,000 square metres to the total amount of shopping centre space in Finland.
“We are expecting growth this year, although the weather has had a negative effect on the clothing market. I am hesitant to predict large growth, but I estimate that many shopping centres are targeting growth of a few per cent,” Vikkula explains.