Living in a digital world

On May 31st 2012 in Warsaw?s Marriott hotel, representatives of the sector gathered for the annual Retail Vision conference. It was to be a day of animated debate about a sector that is always changing, but often seems to stay the same. Two topics kept recurring throughout the day: whether online retail threatened sales in more traditional stores, and the necessity to tailor a shopping centre's offer to the requirements of its location. The first dicussion kicked off with a presentation by Piotr Wasilewski, the retail agency director of DTZ, in which the latest figures for the Polish retail market were presented. The panel that followed was moderated by Maria Kobryń of the Trusiewicz & Siwko law firm, while the remaining panellists included Yann Guen, vice president of Mayland Real Estate, Anna Malarczyk, the managing director of Futureal Management Poland as well as Maja Gawrońska, CEO of Etos (Diverse). Maria Kobryń was not much surprised by the data; however, she noted that the figures would be surprising if taken from the perspective of ten years ago. As Maja Gawrońska explained, many cities of over 100,000 inhabitants are now saturated, but in smaller towns the spending power is not there. Still, the market continues to labour from the fall-out after the credit crunch and the resultant lack of available financing. Despite this Anna Malarczyk still regards Poland as an interesting market. Yann Guen also bemoaned the lack of financing and was the first to talk of the need to fit the retail format to a centre's location.

The next discussion focused on the role of the internet in retailing. The moderator was Paweł Lipiec, the editor-in-chief of eCommerce.edu.pl. He was joined on the stage by Marek Górecki, an online retail specialist from Divante.pl, Krzysztof Włodarczyk, the e-marketing coordinator of Praktiker Polska and Jacek Gadzinowski, the president of 360commerce. The internet market in Poland is still regarded as immature, with some sectors doing better than others. Paweł Lipiec talked of the great fear of retailers: competing on price online. However, Krzysztof Włodarczyk pointed out that those who did compete on price alone could not provide the level of service that customers expect. Brands are still important and over time larger players would win out. Indeed, the internet represents a way to extend a store?s reach, according to Jacek Gadzinowski, allowing customers to plan their shopping. The tentative consensus at the end of the day was that the internet need not eat into real world sales and should be used as a tool to complement them.
The discussion became so animated that the scheduled coffee break began fifteen minutes late, after which retail as an investment product came under the microscope. The discussion was moderated by Wojciech Pisz, the associate head of capital markets of Cushman & Wakefield?Polska. Joining him were Katarzyna Cyz, CEO of Atrium Poland Real Estate Management, Martin Erbe, Helaba?s head of international real estate finance for Northern and Central Europe, and Jacek Wachowicz, the director of leasing and sales and a member of the board of Globe Trade Centre. The panel began by posing the question of whether the good days were over, to which Katarzyna Cyz replied that the concern on the market is deep, even in comparison to 2011. Jacek Wachowicz agreed, saying that the investor profile has now changed, with more long-term investors coming onto the market driving down the number of transactions. But Martin Erbe was far more upbeat. He agreed that there was less investment volume, but his bank, Helaba, is open for business. The happy days might be over but there are still good times to come. Wojciech Pisz disagreed, stating that he was more optimistic about the prospects of the Polish national football team than about investment product. Jacek Wachowicz stressed that it is still necessary to tailor the retail offer to the location, making the point that retail has always had winners and losers.

Just before lunch Kathrine Heiberg, CEO of Reteam Group, showed us just how such losers could be turned into winners. She gave an interactive presentation in which she explained that the basic concept of a shopping centre has remained unchanged since at least the 1960s and maybe even for over 100 years. She then invited those in attendance at the conference to design their own ideal mall.
After lunch it was the turn of John Platt, managing consultant of Caci, to give a presentation explaining how his firm models catchment areas. He explained how a location could be analysed using a ?gravity model?, where each shopping centre in a given location attracted shoppers within a 60-minute driving distance. Using this model he demonstrated how and where the catchment areas of different projects might overlap. This led on to a discussion moderated by Nathan North, the deputy editor of the English version of Eurobuild CEE? about the importance of location. The panel also included Renata Kinde-Czyż, the president of Metro Properties, Jonathan Tinker, the managing director and CEO of Helical Polska, as well as Marc Lebbe, the managing director of Liebrecht & Wood. Jonathan Tinker was not much impressed by the gravity model. There are too many different research firms on the market producing what is often contradictory data. John Platt did, however, concede that choosing the right location is as much an art as it is a science. Renata Kinde-Czyż also expressed doubts about the prime importance of location. She felt that the location was probably her seventh consideration when it came to assessing the possible success of a retail scheme. Marc Lebbe held a similar opinion and compared choosing a location to the way a woman looks for a husband. Beauty is good, but purchasing power is of much more importance. Again the topic of matching the offer to the location was discussed, in particular the importance of matching the tenant mix to the average income of the catchment area.

The final debate of the day was also about location, but this time about determining the exact location of a shopper within a mall using mobile phone apps. It began with a presentation by Frank Schuil, CEO and founder of Qubulus. He explained how apps with location sensors could help direct shoppers to stores. Later he was joined on the stage by Gary Thursby, director of the retail agency at Colliers International, Andrzej Łapeta, the strategic director of the Kuc advertising agency, and Marek Kapeliński, the CEO of Wyspa Skarbów. The discussion was moderated by Kathrin Heiberg. The use of apps is still rather novel, and as Marek Kapeliński pointed out the majority of people who download such apps are young. Andrzej Łapeta explained how developers were still waiting for shoppers to download their apps before extending the system, while Gary Thursby related how mobile apps are a maturing market in Poland and how schemes such as ?deal of the day could encourage shoppers to enter stores. All the panellists agreed that online retail and the traditional kind do not have to compete and could even be complementary. Later the discussion was continued over drinks at the networking cocktail party, thus bringing to an end the Eurobuild Retail Vision conference of 2012.