Today, Unibail-Rodamco-Westfield unveils its biggest retail trends report to date,‘Westfield How We Shop: The Next Decade’, which predicts 2025 will be the experience tipping point in retail when more than half of retail space in stores will be dedicated to providing experiences.
The new report reveals the needs and wants of 15,700 consumers across ten countries in Europe including The UK, France, Spain, Germany, Austria, Sweden, Poland, the Czech Republic, Italy and the Netherlands and predicts five major trends to shape the industry over the next 10 years including:
- UPSIDE-DOWN RETAIL – the entire retail model and people’s shopping habits will turn on its head by 2025, with 59% of consumers expecting more than half of retail space will be devoted to experience rather than product by this time. 75% of consumers have the view that this will happen by 2027. 81% of customers globally are willing to pay more for experience1 – making this a worthwhile investment for retailers and shopping destinations alike. The report finds that 43% of Londoners want more creative experiences in-store.
- ANTI-PRESCRIPTION – 52% of UK consumers are frustrated by inaccurate online recommendations, rising to 69% in London, providing retailers need to stay close to their customers through data. Nearly 72% of UK consumers want to browse full ranges, not curated edits. Smart brands that use their online space to showcase the full range, and their physical stores to surprise and delight, could become tomorrow’s star performers. Consumers are requesting more of their loved online brands to enter bricks & mortar, with the likes of On the Beach, Boohoo and Réalisation Par all proving popular.
- SELF-SUSTAINING STORES – consumer conscience will rapidly accelerate a demand for more sustainable solutions. Already, 70% of UK shoppers claim they would like products made instore, which rises to 73% of Londoners. 76% of Europeans want retailers to do more to address environmental concerns. The most pressing sustainability issues for shoppers overall are single-use plastics – with 67% of UK consumers prioritising the banning of single-use plastics amongst desired sustainability initiatives.
- RETAIL SURGERY – retailers will take personalisation to the next level using science to diagnose precise needs, which could be worth up to £40 Bn per month, just in the UK2. More than a third of UK customers (35%) are willing to provide their DNA or health in return for accurate recommendations.
- LOCALLY-MORPHED – retail spaces of tomorrow will become community hubs with 69% of UK consumers desiring them to reflect the people who live in the area. 50% would prefer local brands to well-known ones.
The launch of the ‘Westfield How We Shop: The Next Decade’ report follows the roll out of the only global shopping, leisure and dining destination brand, Westfield, across Continental Europe. Ten flagship destinations and two future developments were rebranded in France, Poland, the Czech Republic, Sweden, Germany and the Netherlands in 2019 with more locations to follow in 2020.
Christophe Cuvillier, Group Chief Executive Officer, Unibail-Rodamco-Westfield said: “The ‘Westfield How We Shop: The Next Decade’ report is one of the largest European studies of consumers’ retail habits and is an industry first. Understanding customers’ needs today and tomorrow is part of our commitment to driving the industry forward and ensuring we provide the ultimate destinations for our visitors to enjoy and our retailers and brands to thrive in.”
Myf Ryan, Chief Marketing Officer Europe and Group Director of Brand and Strategic Marketing, Unibail-Rodamco-Westfield, commenting on the emerging trends said: “The important role of the physical store is changing and retailers need to enter another decade of reinvention to remain relevant. Retailers that lead on sustainability, devote more space to experience, provide free-range browsing online and in-store, deliver accurate product recommendations based on science and think local will reap the benefits.”
TRENDS: IN DETAIL
Upside down retail
The experience economy has changed the face of retail where today’s European shopper looks for 40% of retail space to be given over to experiences, but this is set to accelerate. The Westfield How We Shop report has identified 2025 as the experience tipping point. By this date, 56% of UK consumers expect retail spaces to hand over more than half of their square footage to seeing and doing, with nearly three quarters of all UK shoppers (73%) predicting it will happen, at the very latest, by 2027.
37% of UK shoppers and 41% of Londoners want more creative experiences in store – from studios where you can create your own podcasts to video games. With rise of co-working across Europe, nearly 30% of city dwellers are seeking workspaces and educational opportunities within stores.
Research shows that despite the rise of automation in their lives, shoppers want to feel in control of their purchasing decisions. 56% of European shoppers overall are not happy with their online recommendations with the most frustrated countries Poland at 70%, Spain at 63% and Austria at 62%, demonstrating the critical need to truly understand your customer. UK shoppers sit at 52%. This is triggering a movement of anti-personalisation, with over 70% of UK shoppers stating they enjoy the overall vibe of shopping in physical retail environments.
More online brands are looking to expand into physical retail for the first time to deepen their relationships with their consumers. The research unveiled the online brands that European consumers would like to see in a physical store setting in the next 10 years with 47% of shoppers wanting to see a Netflix store and 33% want Spotify.
As consumers become even more conscious of their ecological impact on the planet, they are looking to brands to help them create a more sustainable future. The research shows that 290 Mn shoppers across Europe demand that the stores of the future become truly self-sufficient. Moving to a self-sustaining store model requires significant infrastructural change for big businesses. Smaller, nimble start-ups are likely to lead the charge and put pressure on larger businesses to change.
An impressive 70% UK shoppers and 73% of Londoners want brands to make products in-store whilst they wait or are created in-store beforehand to minimise waste, marking a trend for factory stores. 67% of UK shoppers also want to ban single-use plastics and 78% want retailers to do more to address environmental issues.
The store of the future will extend this self-sufficient approach and will include allotments on the roof to grow ingredients, a 4D-printing factory and studio allowing design teams to create product on demand. In addition, shoppers will be assured of zero-waste packaging solutions that will happen instore and will even be able to pay for goods through points programmes where customers are rewarded for their positive eco-friendly practices.
Rental retail is also a growing trend amongst European consumers, all leading to the store of the future being more sustainable. Nearly half of all UK consumers want to rent some products rather than buying them. More than three-quarters of British shoppers want to rent items for their home and almost half of all Londoners would rent fashion and beauty items, making London the fashion rental capital of Europe.
As we enter the new decade, research shows retailers will be able to, and be expected to, diagnose precisely what a shopper needs based on fact, rather than presumption. Over a third of UK shoppers look to stores to offer personal consultations in order to identify the perfect products for them. The Retail Surgery market of tomorrow could be worth up to €4 Tn per year3 across Europe.
Retailers will start to act like doctors, prescribing specific, personalised and accurate solutions that will enhance shoppers’ day-to-day lives. The trend comes to life through the research as 35% of UK shoppers reveal they are happy to hand over their DNA in order to receive products better suited to them. The DNA market alone could be worth in excess of €18 Bn across Europe, presenting an exciting opportunity for retailers over the next decade4.
A trend for town hall malls is set to change retail destinations as we know them, as they morph into their surrounding environments, shaped by the individual communities they serve. Almost half (47%) of UK shoppers have a strong desire to be more connected with their local community, with nearly seven out of ten UK shoppers (69%) revealing they want the retail environments of the future to reflect the individuals and communities in an area. Interestingly, 34% of Londoners go to shopping centres to socialise more than shop.
Half of UK shoppers say they would prefer to see home-grown brands over well-known ones in the retail environments of the future. There are also signs of rising nostalgia as consumers desire experiences such as book clubs, social clubs and community fairs, harking back to former times.