Architecture, Consumers, Design, Developers, Middle East, Perkins+Will, Portland Design Associates, Retail, Retail architecture

Developers must sell space based on consumer data, not square footage

Ibrahim Ibrahim, managing director at Portland Design Associates, the London-based branding, retail strategy, and design consultancy part of the Perkins+Will group of companies, discusses the changing face of retail.

Ibrahim highlights that part of the firm’s design process is based on research and an understanding of markets, consumers, sectors and technologies.

“We have intentionally created an insights team to ensure our designers are informed by future behaviours and mindsets of consumers. For us it’s consumer journeys and missions that drives the concept and should be the focus of developers and architects,” he said.

“It is this data capture ability which has lead us to the realisation that the space race is over for retailers. For anchor stores, or major space users, the idea they need more and more space is no longer the case. What has in fact happened is a percentage of sales has moved online and space is evolving from transactional use to experiential.”

Roger Wilson, managing director at Perkins+Will’s Dubai studio, explained: “Through the shift to online shopping, the e-commerce market is currently valued at $7 billion globally. The e-commerce market in the UAE is expected to reach $2 billion in 2018.

“An annual Mastercard behaviour study in 2014 revealed nearly 35 per cent of Middle East citizens had previously accessed the internet to shop online, 44 per cent of whom made at least one online purchase in the previous three months. With a local internet penetration of over 90 per cent, there is so much data available to us which we are in turn able to translate into a clear path developers should take.

“It’s imperative we take a look at the data made available to us by the likes of Portland if we are to stay ahead of the curve, boost the retail sector across the UAE and become the proposed fashion destination of the Middle East alongside the likes of Paris, London and Milan.”

Ibrahim added: “I am a firm believer the internet will not kill shops, it will liberate them, increasingly we are looking at money not changing hands in-store. Retail is about three things: Recruitment (sourcing customers), Transaction (sales) and Retention (loyalty). More and more we are looking at transactions happening online and physical stores being about recruitment and retention

“The space retailers do have, will be used more and more for experiences rather than for transactions, much like the Apple store which is designed to be entertainment and leisure-driven. Retail will take on more of a hybrid role, for the most part anchored by food and beverage whilst turning into more of a social destination. A good example of retailers turning experiential are beauty stores. Brands will create a hybrid of products and services, like make up stores selling products as well as offering services like manicures and pedicures on site.

“Tenants of shopping malls are changing, so developers have to change too. The issue for the developer is the changing net-to-gross ration whereby there will be  a convergence of the public and tenanted spaces. Sales-per-square-metre will no longer be how one values a piece of real estate, developers need new ways to show a tenant the value of taking space within a specific mall or destination. Developers are technologically able to capture granular data and hence charge based upon quality of audience. A developer’s asset is also its audience, not just its space and like it or not, this shifts developers from the property business into media business where they must begin to think and behave like a media brand that owns a media platform.”

He concludes: “Let’s now look at the future planning of retail destinations. As designers who are looking to design a retail destination, we must understand the shopper. To ‘future proof’ a retail destination you need to understand how the aforementioned data will impact upon design. If we say retail destinations are to become media platforms and brands need physical space to engage with customers, we are looking at very different designs. These are designs which will ultimately include hybrid, ‘soft’, progammable spaces acting as destinations which are not limited to transaction but engagement and experiential opportunities. Smart architecture will be designed with anthropology, not architecture at its core.”