Based on expert forecasts, we expect inflation to remain high, along with interest rates. Realistically, this will have two impacts: people’s purchasing power will be reduced and it will be more difficult for businesses and organisations to finance new investments. In the retail real estate sector, these challenges are further compounded by the competition from the online retail sector. This means that brick-and-mortar retail outlets will have to find creative, courageous approaches to make their spaces attractive “lifestyle” destinations if they want to remain successful in the long term.
Regarding trends and developments, the Harvard study on happiness, which took place over 85 years, recently reinforced the importance of people’s need for connection. In our rapidly changing world, where single households are on the increase, the importance of communal and public spaces shouldn’t be undermined. This presents significant opportunities for shopping centres that innovate and transform into locations where people choose to use as places to meet and interact. This transformation demands strong concepts to add atmosphere and opportunities for experiences. In the future, shopping centres will look different to how they do today, but if they lean into the change, they can be just as successful as they have been in the past.
Fundamental and sustainable changes
Like all other sectors, the place-making industry needs to be doing what it can in the face of today’s ecological and social sustainability challenges. The requirement to be transparent about this, thanks to new EU regulations, is already making fundamental and noticeable changes in this sector.
Sustainability isn’t just a trend. It concerns us all and will continue to affect businesses in the retail real estate sector and elsewhere in the long term. At MK Illumination, are investing significantly in this area, which we see in a positive light. Sustainability not only helps us to protect our planet but also inspires us to find new, innovative solutions and approaches, which both anticipate and respond to the changing needs of destinations.
Therefore, my recommendation to the industry is: Approach the transformation from shopping destination to lifestyle and experience location with optimism. Yes, we will need bold approaches. Yes, we will need creative ways to innovate. And the rewards will be tangible: it’s possible to be just as successful in the future as we were in the past – if not more so. Because, as I’ve mentioned, we humans crave connection and places to connect. Those who succeed in creating attractive places to meet, gather and share experiences will be the winners of the future.
Thomas Mark
Thomas Mark is President of MK Illumination, and Member of the ACROSS Advisory Board.
