Evolution not revolution

If it is already possible to do shopping on mobile phones, why do developers want to continue investing big money in shopping centres? Have iPhones become the biggest competition for such facilities? Not at all, insists Yann Guen, vice-president of Mayland Real Estate - traditional retail will embrace the new technology

Mladen Petrov, 'Eurobuild CEE': People are saying more and more often that e-commerce could post a threat to traditional retail. Do developers share this opinion?
Yann Guen, vice-president of Mayland Real Estate: Yes and no. On the one hand the internet could be a threat but it also creates new possibilities at the same time. I do not believe that we will divide retail into traditional, internet-based or whatever else in the future. We will simply have global retail. Of course we have to take into account the fact that consumers' habits change. They are increasingly well informed. I do not view the internet as a competitor; I consider it to be a complementary tool for shopping centres. The internet and the shopping centre are not two separate worlds. Customers may do their shopping in a shopping centre and at the same time use the internet to find out more about the products on offer.

But shopping centres are increasingly being used as a place to try on clothes, which are later bought on the internet...
I do not agree. People will continue to try on clothes here and buy them because the prices are competitive, whereas internet shopping is not as much fun as when it is done in a shopping centre. The centres themselves are also changing, they have become more ?specified' in order to respond to the needs of specific customer groups. It was the same with advertising in the past, when everyone had to find something for themselves in the advertising message. Nowadays adverts are made in a very detailed manner, for specific target groups. These days adverts track us down on our mobiles, and here we return to the issue of technology helping shopping centres.

There is a lot of talk about shopping centres becoming an integral part of cities. People come to spend some time with their friends. It is nice, but how do shopping centres make money out of such time-spending, which, after all, is not connected with shopping?
And who said that customers do not spend any money while spending their time with friends? On the contrary. They could buy some clothes for themselves or use some of the services available, for example, joining a gym. The services we sell do not have such a big financial significance, but they do cost money.

We have been living in the grip of an economic crisis for a few years. Are we already so used to bad news that we have stopped paying any attention to it, which consequently means that we care less about spending money?
The question is not whether we will spend but what we will spend money on. We can already see now that we are spending more on health and a healthy lifestyle. However, there is no danger of giving up on spending money because that would result in the collapse of the global economy. We cannot allow this to happen. Developers must control their expenditures and keep up with the offer of products. We used to spend more on food in shopping centres ten years ago. Nowadays, as a result of contemporary lifestyles, we cook less and eat out more. Nonetheless, we continue to spend money.

How do these changes affect tenants? Are some of them disappearing and being replaced by others who address customers' requirements in a better way?
The positioning of brands has been changing. We are moving away from the mass market and specialising. There are fewer and fewer brands for all. Customers have got used to the fact that they deserve to get a good price. So we cannot attract them by just by offering a good price. They have internet access and can compare prices. Shopping centres will ultimately offer brands specially selected for specific customer groups, with reference to their social status, gender and their lifestyles. This means that the number of shops will not change, but their offer of products for each of the groups will be better thought out, and all within one shopping centre. Nowadays a new shopping centre does not just mean constructing it. You also have to offer something new. I am really excited to be working in the 21st century. However, I am of the opinion that there will not be a revolution, but evolution.

Unless we take a look at China. Every new shopping centre there is bigger than its predecessor, offering highly exclusive products at the same time. So how will Europe continue to attract customers?
Copying China is certainly not the way, because our markets are completely different. Our European shopping centre market is over 50 years old, theirs is only 15. Moreover, they do not really have a middle class over there. I do not wake up every day thinking how fast the retail market is developing. There are also a lot of shopping centres being built here, but they are not so huge. And this is fine. As Europeans we should focus on sociology and demography, both of which say that society is getting older. What will our response be to this trend? There will be new brands and services, but a shopping centre will not cease to exist just because we are getting older.

Which European country will lead the way when it comes to the changes?
There is no leader that could be followed by other countries. However, this is where our advantage lies, as we have a lot of different concepts. We can pick what we like in other markets - for example, the French put a lot of emphasis on their culinary offer - and creating something interesting on this basis.

Does something interesting also mean more original architecture for shopping centres? The project visualisations look promising. However, only a few of these bold projects actually see the light of day..
Architecture has been a very important issue throughout history. We need to be aware that nothing lasts forever. Each period has its facilities that stand out and initiate discussions. Some buildings look very nice but will they stand the test of time? Will they look as good in the future as they do now when a given style in architecture is fashionable? It needs to be remembered that historically only a few streets have retained their retail character throughout the centuries in cities such as London or Paris. That is why a developer builds a centre bearing in mind that the project will not stand at a given site forever. Let us be realistic in such cases.

Has the lifespan of a shopping centre become shorter nowadays, taking into consideration the speed of changes?
We need to separate developing a shopping centre from what is going on inside the facility. We do not just build centres but also create a new direction for shopping that stays in consumers' minds. It is the same with our houses: when we get bored with a certain wallpaper, we do not sell or demolish our house. We simply change the wallpaper for another that we like more. Then we change the furniture, etc. We should allow developers' imaginations to keep working. Ten or twenty years ago nobody in Poland expected that Arkadia or Złote Tarasy would be opened. Still, they were eventually built. Let us allow ourselves to be surprised. ?

The french connection
Yann Guen has 20 years' experience in several large French and international real estate and retail companies. Over the years he has managed the commercial and mixed-use projects of major French property developers. He has been working in hypermarket development In Poland since 1999, with Géant Polska and King Cross. In 2006 Yann Guen became vice-president of Mayland Real Estate, in charge of the real estate development and the relations with Mayland present and future markets. In 2009 he participated in the sale of three shopping centres in the largest transaction in the Polish retail sector since 2007.