Channelling the future

Aneta Cichla, ‘Eurobuild CEE’: The retail market has been going through some significant changes. Which of these do you think will turn out to be the most important and how will they change the face of Polish shopping centres?

Monika Pyszkowska, director centre management international, ECE Projektmanagement: There are many trends that are shaping the shopping centre market. However, what precise effect they will have depends on the specifics of a centre and its location. Each individual centre is affected by different factors and is therefore changing in a different way. For example, our emphasis at the moment is on expanding our entertainment services. Malls in city centres don’t need much redevelopment to achieve this. For instance, at Galeria Dominikańska in Wrocław we have extended the food and beverage area but we are not going to invest very much in the entertainment section, because it is a relatively small building in the city centre and requires a slightly different approach. Nor do we intend to create a specially designed entertainment section for our Galeria Krakowska mall – at least not for now. But it makes sense for those centres operating on the outskirts of a city to have a range of services that is both wide and attractive enough to bring in shoppers from a much greater distance. Entertainment can be an important feature for such centres – and I’m not only talking about cinemas but also other forms of recreation that fall into this category. Another very important trend, which is still growing, is to improve the food and beverage range. In response to this we have devised our ‘We Love Food’ programme. A food area is now not only the food court – which is now just one form of this kind of space – but also other areas with food and beverages that meet different customer needs, such as going out with the family or business partners, or just the desire to stop off in a café. These are also tending to include casual and fine dining options. It’s also worth mentioning that sales channels are beginning to merge. One example of this is the Digital Mall pilot project we’ve launched at our Alstertal-Einkaufszentrum mall in Hamburg. The project allows shoppers to search on the shopping centre’s website for a particular product that interests them from those retailers in the centres taking part in the scheme. Customers can view the product, choose the right size, reserve it, pop into the centre, try it on and finally buy it. This omnichanneling trend is growing because although online shopping is popular, people still want to visit shopping centres, spend their time there, try on and feel the products, and meet up with their friends – so I don’t see any threat to their existence. Of course, they will keep evolving. Perhaps some of the weaker ones that are not willing to embrace the change at all will disappear, but people will continue to want to meet up and they will choose to go to places like shopping centres to do so. Therefore they have to become the ‘third place’ to be, after the home and the workplace. They need to provide people with an alternative to other leisure options.

How would you characterise the current shopping centre customer and who will this be in the future?

We are seeing a change in the generations. More and more people are now using smartphones. We can’t say that this latest generation is already dominating the customer base, but the trend is clear and in a few years probably no one will go shopping without their smartphone. This is a trend we are responding to and have come up with a number of approaches for it, such as smartphone apps and websites designed for mobile phones. Another example is the Easy Dining pilot project for ordering food and paying via an online platform and then picking up a ready meal in the shopping centre without having to wait in a queue. This service was recently introduced in Skyline Plaza in Frankfurt. We are also seeing a number of tenants taking a similar approach. Many have been introducing a variety of systems and loyalty programmes and other ways of engaging with the customer in the online world. We are in the middle of these changes and shopping is continuing to move into the digital world, which is linked to the development of other fields, such as telephone payments. Poland is very advanced in this respect. We are using our cards to pay much more often and making use of other systems and new technologies that have yet to become commonplace in other countries.

In mid-September this year, ECE announced a recommercialisation of its centres to focus more on entertainment and food & beverages. How will this strategy be applied to shopping centres in Poland?

We have a number of plans. Their timing depends very much on the life cycle of each individual centre. Not every shopping centre will see huge changes – for example, in food and beverage areas, where changes can’t always be introduced immediately due to such limitations as ongoing lease contracts. Nor is it possible to introduce the same strictly defined concept everywhere. We always adapt the formats we feel are appropriate to each specific centre, its location, its customer structure, the services offered by the competition as well as many other factors that define the character of a given centre. Sometimes you have to look for a completely new way to stand out and offer something completely new. Last year, for instance, we introduced changes to the food court in Silesia City Center in Katowice. This year we began work on modernising Galeria Łódzka. We are paying close attention not only to what we offer but also to such factors as how the restaurant zone is laid out and how it functions. This space is seen in a different way today than it was just a few years ago and you have to give it an attractive form so that it will pull in customers. In addition to this, many interesting ideas are being floated that require the agreement of the tenants for organising food and beverage areas in terms of their services and layout. So tenants also want to change and to maybe present themselves in a slightly different way. When we inspire each other in this way, we can create something new and original. One idea is to bring in some additional freshness by opening up a mall to local tenants who are familiar with the residents of the area. To achieve all this, we recruited food service expert Jonathan Doughty, who is now responsible for developing strategies for the food and beverage concepts in ECE’s centres. In addition he is now also responsible for entertainment and placemaking. Our efforts are being concentrated on introducing our most interesting ideas and adapting them to each of our centres. Polish customers are curious about new tastes – and catering services are developing very quickly in shopping centres. In this sector we have come up with many interesting projects. One of the best times to make such changes is when we are modernising or restructuring a centre, and so every building has to be treated individually, since no single idea suits all.

One of the pillars of your strategy is also to strengthen the placemaking role of your buildings. What does this involve?

The placemaking concept involves making centres more than just places for shopping. We have been working on this idea for quite a while now, but we want to put a stronger and more elaborate focus on it in the future. This involves, basically, what I have already mentioned above: food and beverage concepts, entertainment options and leisure offerings such as cinemas, bowling alleys, climbing walls, sports locations or jump houses. All this can contribute to further establishing our shopping centres as places for shopping, dining and leisure – and become even more the “places to be”.

At the ECE Polish Retail Day 2018, ECE Projektmanagement announced that the company is to focus on creating modern commercial space. How do you intend to introduce these plans to Poland?

We are currently modernising one Polish centre, Galeria Łódzka by completing the renovation of the food court, according to the latest trends in architecture and interior design. The area will offer our customers a variety of new amenities and functions. The work will take place until the end of November and should be completed at the same time as the opening of a Lidl supermarket in an area that used to be occupied by a Tesco store. Next year we are planning to renovate its interior and change its layout so that it meets modern standards. Rest zones and new interior furnishings will also be added. In the next two years we plan to start modernisation work on Galeria Bałtycka in Gdańsk and Silesia City Center in Katowice.

There’s been a lot of talk about how technology has been transforming the shopping centre market. Has it already started changing the work of shopping centre owners? How much do you rely on modern technology and employ ideas such as big data?

We are looking at how to introduce such modern technological systems. The Digital Mall project is one of these. We are also currently testing a system that shows us how customers move around a building and how they use it, but these are just pilot programmes. However, we can see that there is a need for such ideas to be introduced. We’re mainly doing this in Germany, where we have many centres and our headquarters with strong and creative marketing and innovation departments. Our general approach is to check and see how well a given system works and whether it’s worthwhile implementing across our entire portfolio. We are also doing a great deal of research and analysing how our centres function and how well they meet customer requirements. Firstly, we look at the local market, what our customers and the local residents expect from a particular centre; and then we track what is being offered by the competition, how much purchasing power the typical customer has, as well as what they consume and who they are. We do this through various surveys and opinion polls, which show us how a customer views a given centre. We also make use of social media as along with the other analytic tools available on the market. There are a many ways to do this. It’s important to accurately identify the needs of local residents and customers and to match our range of goods to their requirements.

What problems does the retail sector currently have to face?

In Poland the Sunday trading ban is certainly a challenge. This is having an impact on the operations of both shopping centre operators and tenants – and could also give a boost to online retail in the long term. As a result those working in the sector now have to look for new ways of reaching the customer. This is also leading to more changes. One such interesting challenge is how tenants are changing their sales methods. But we are still at the beginning of this transformation, with stores becoming more like pick-up points. You have to follow such changes and find approaches that suit all parties. I believe that you need to combine your sales channels while at the same time making use of new technology. Provided that it‘s a two way street for both tenants and managers, I think great results can be achieved. After all, I’m convinced that omnichanneling is the future. ν