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Embracing the Concept of ‘Third Spaces’

Embracing the Concept of ‘Third Spaces’ 1

In an age where online shopping is dominant, this article by Nicky Lovell, Head of Outlets and Business Development at Global Mutual, will explore how the role of brick-and-mortar retail outlets is evolving. Beyond serving as merely transactional, these spaces have the potential to become vibrant hubs of community engagement and social interaction. By embracing the ‘third spaces’ concept, retailers can create environments that foster connections, spark creativity and cultivate loyalty among customers.

It’s not surprising that, with the rise of online shopping, traditional retailers have felt the pressure to adapt. The convenience and variety of choices offered by online retailers has dramatically changed consumer behaviour.

This shift towards digital shopping accelerated during the pandemic, with the UK and much of the world confined to their homes, which led to many traditional stores struggling to compete. According to Statista, in 2023 there were almost 60 million e-commerce users leaving only a minority of the population as non-digital buyers.

Beyond retail, as lockdowns eased, our reliance on digital technology remained. Now, virtual connections often substitute face-to-face interactions, but this newfound dependence on digital connectivity has sparked a renewed interest in physical retail centres.

But why, when customers can get almost anything they ever need without leaving the house, are we seeing a revival in shopping centres? The reason is because it’s not the products they’re searching for, it’s much more than that.

The answer is simple. As social beings, we crave real-world experiences and interactions – more so now than ever – and herein lays the opportunity. No longer confined to being merely transactional spaces, these vast hubs have the opportunity to evolve into vibrant nerve centres of their communities.

In 2024, physical retail centres have a unique opportunity to redefine themselves, to think beyond transactions and embrace a new approach to retailing. Retail centre managers are increasingly adopting a fresh mindset and exploring innovative paths to success.
While the end goal remains the same – driving footfall and sales – the route to get there is changing. The key lies in understanding emerging consumer trends.

Recent reports, like Euromonitor’s 2022 consumer trends, show a significant shift in consumer behaviour. More than ever, consumers now prioritise experiences over products and retail centres are poised to fulfil these needs. Retail Futures 2022 also found that 56 per cent of global Generation Z globally visit physical stores for a fun experience.

‘Third Spaces’, distinct from our first space (home) and second space (work or school) are needed to serve as vital hubs where people can connect, create and engage with others. By embracing this concept, retail centres can transform into dynamic environments that foster connections, spark creativity and cultivate customer loyalty.

The Retail Futures 2022 report explains that in a post-Covid landscape, changing consumer needs are driving retailers to rethink bricks-and-mortar stores to be more engaging, sensorial and memorable, but centres shouldn’t leave this to their brands. Centre managers must drive this change from a higher level, offering a more altruistic, reimagined third space, create emotional connections with their customers and foster a sense of affinity for the centre – by offering value beyond just stores.

Let’s face it, shopping trips can be forgettable, but immersive shopping experiences can also be the catalyst for repeat business, positive word-of-mouth referrals and a loyal customer base who serve as brand ambassadors for years to come. Research institute, Motista, found that customers who have an emotional relationship with a brand have a 306 per cent higher lifetime value.

Amid lockdown, forward thinking Dalton Park Outlet partnered with Climate Action North to transform an underused garden into a Pollinator Parks® Garden. This made it the first retail destination in the North of England to introduce a wildflower meadow, which provided a key point of difference in a crowded market.

Today, they’re reaping the rewards, with footfall thriving amid widespread decline across the sector. Is this all down to their gardens and green space? Of course not, but they offered a vibrant, safe space for people to enjoy whilst the local community, like the rest of us, was adapting to uncertainty and change and it didn’t go unnoticed.

Catering to children is another powerful strategy for retail centres. Creating a safe space for parents during those early years or rainy school holidays is always a key consideration in our business case. This will not only get the parents on board, but enchanting moments tailored for kids enhance the shopping experience making them more enjoyable, whilst cultivating trust.

By prioritising experiential offerings for children, retail centres can secure present-day patronage and lay the foundation for a loyal customer base that spans generations. At Affinity, Staffordshire, the children’s play area and surrounding relaxing space is not only well-used but hugely appreciated by local residents and this is regularly communicated back to the centre staff.

Retail centres can also provide a welcoming environment for remote workers, freelancers and students seeking a change of scenery. Integrating wellness amenities like meditation spaces or fitness classes is another option that not only promotes holistic well-being but encourages visitors to linger.

Livingston Designer Outlet, Scotland’s largest designer outlet, offers a unique, multi-use space in its centre. The centre benefits from being under domed windows, which flood the space with natural light throughout the day. They use calming bubble installations to create a relaxed atmosphere whatever the weather. By night, the ambience of the space can be manipulated by clever coloured lighting. This means it can be calming and welcoming by night as it is by day, which makes it the perfect space for locals to visit during those dark winter evenings.

For years, physical stores have been on the back foot, competing with the giant that is e-commerce. The challenges of lockdowns made the future seem bleak at times. However, these dark days have paved a new path for brick-and-mortar retail. It’s up to us to be brave enough and creative enough, to take it.