“Footfall will finally stop being compared to pre-pandemic 2019 levels. There is a change in the way shoppers are using their centres, but reduced footfall hasn’t translated into reduced turnover. Even accounting for inflation.
The rise and rise of Frasers – the strength the retailer has in negotiating deals will continue, and there will be more locations transforming old department stores into new Frasers and Flannels.
The investment market will return…..but not until the 3rd quarter. There is a lot of stock available, but the debt markets have stopped trading volumes improving. With debt starting to reduce in cost towards the second half of 2024, we will see more private equity back in the market.”
“This will be the year when asset managers and retailers finally embrace the ESG agenda together, finding practical ways to share their Net Zero targets, generate valuable data and reach out to the communities that use our centres and high streets.”
“Generally positive, hopefully, interest rates will soften which will help with consumer sentiment. The occupational market is polarised with strong demand for major regional destinations.”
“Challenging year with a combination of high-interest rates stifling investment in real estate in general, though retail warehousing may continue to see some growth. Policy questions to remain unanswered over the course of the year due to pending elections.”
“Partnership with customers on ESG matters as well as commercial success becoming more pressing – and being recognised as coming hand in hand.
Landlords haven’t always needed much from their tenants, beyond their presence, signature and rent. Now property companies have Net Zero Carbon Roadmaps and clear objectives to create social value alongside shareholder returns.
Green leasing – and wider responsible leasing – will stretch beyond the office sector and asset-owned industrial parks to cover retailers of all sizes. As it starts to be brought to smaller retailers and occupiers then need to make the positive case for good growth and landlord-tenant partnership becomes all the more important. Small businesses might (!) ask proactively for a green lease, but more likely it is the landlord initiating the discussion about new terms.
Making sure that small businesses understand, are equipped to take advantage of, and feel the real benefits of good growth and responsible practices will have to happen to bring everyone along on the journey to a greener future and will be imperative if we are not to only bring about a transition that is just (with everyone relatively no better or worse off) but that is better.
At Places for London, we are taking inspiration from those of our peers doing great work to support their retailers to thrive long term by seeking to offer free responsible business skills programmes to our customers and a truer partnership and alignment of values, alongside our version of a green lease.”
“I think a rapid acceleration in public disclosure around ESG will create more awareness of the broader scope leading to more investor needs. I think retailers will increase their ESG communications in relation to this.”
“I think that the start of the year will be very difficult for retailers and that experiential Marketing will be more important than ever. Giving an extra reason for people to visit a shopping destination will be key, through place-making and community-focused activities.”
“Less cheer more Fear!
In the ever evolving world of destination marketing, there currently seems to be an atmosphere tinged with apprehension and uncertainty. As we stand at the intersection of economic change and the intricacies of destination marketing, it is crucial going into next year to dissect the factors contributing to these concerns and explore strategies to navigate the path ahead.
There is undoubtedly an unease gripping the industry which is rooted in the current economic landscape, where key indicators such as GDP growth, unemployment rates, and inflation play a pivotal role in shaping marketing strategies. Emerging trends and issues influenced by global events have added a layer of complexity to the challenges faced by destination marketers.
The impact of major global events, from geopolitical tensions to public health crises, has cast a profound shadow on destination marketing strategies over recent years. The fear of the unknown still looms large, influencing decision-making at both individual and organisational levels within the destination marketing sphere.
Technology and automation, while always promising progress and efficiency, have also brought challenges to destination marketing. The reshaping of consumer behaviour and the digitisation of marketing channels contribute to the overall fear of economic instability in the destination marketing landscape.
Government responses to economic challenges and policy decisions, particularly those affecting the travel and tourism industry, play a pivotal role in shaping the narrative. The effectiveness of these responses becomes a critical factor in either alleviating fears or exacerbating them. Striking a balance is essential to ensure stability and to foster growth in any marketing efforts.
One of the major issues is public sentiment and consumer behaviour, obviously heavily influenced by economic fears which further complicate the landscape. Understanding the psychological impact on travel decisions, spending patterns, and destination choices is crucial for developing resilient marketing strategies.
Industry specific challenges and regional variances also play a role in the economic drama within destination marketing. Disparities between urban and rural destinations, coupled with the unique struggles faced by specific tourism sectors, create a ripple effect that resonates throughout the entire destination marketing ecosystem.
In the face of these fears, destination marketers must consider innovative strategies and mitigations. Collaborative efforts between industry stakeholders, governments, and local communities are paramount to address the root causes and pave the way for a more stable and resilient destination marketing future.
In conclusion, the fears surrounding the economy in 2024 are intimately tied to the realm of destination marketing. By understanding the contributing factors and embracing proactive measures, destination marketers can navigate these uncertainties with resilience and pave the way for a more robust and sustainable future.
Stay informed, advocate for positive change, and actively participate in shaping the destination marketing narrative of 2024 and beyond.”
“Let’s Talk AI
Increased Customer Segmentation and Targeted Marketing:
AI’s ability to analyse vast amounts of customer data will enable shopping centres to go beyond broad demographics. It will enable the creation of highly nuanced customer segments based on individual preferences, behaviors and purchase histories. By leveraging this information, shopping centres will craft hyper-targeted marketing campaigns, delivering personalised promotions and ads to specific customer groups.
Predictive Marketing Analytics:
AI excels at predicting future trends by analysing historical data patterns. In the context of shopping centre marketing, this means a more informed understanding of customer behaviour. Predictive analytics will assist in forecasting trends, enabling shopping centre to tailor their marketing strategies in real-time. This not only ensures campaigns stay relevant but also optimises the allocation of marketing resources for maximum impact.
Chatbots for Customer Engagement:
AI-powered chatbots will play a pivotal role in customer engagement. These AI powered bots will provide instant responses to customer queries, offer information on promotions and events and guide customers through the purchasing process. By automating routine interactions, shopping centres will enhance customer service, ensuring a seamless and responsive experience across various channels.
Social Media Listening and Engagement:
AI tools will actively monitor and analyse social media platforms, providing shopping centres with valuable insights into customer sentiments, preferences and trends. This social listening capability will enable businesses to adapt their marketing messages in real-time, respond promptly to customer feedback and stay attuned to the evolving expectations of their audience.
Content creation can be time-consuming, but AI algorithms will assist by generating product descriptions, blog posts and social media content. AI algorithms will learn to mimic a brand’s tone and style, ensuring consistency in messaging. This will free up marketing teams to focus on strategy and creativity.
Increased Augmented Reality (AR) in Marketing:
AR will enhance marketing initiatives by providing interactive and immersive experiences. Shopping centres will leverage AR applications to allow customers to virtually try on products e.g. visualise furniture in their homes, or preview how items will look before purchasing.
AI-Driven Dynamic Pricing Strategies in Retail Marketing:
AI algorithms will analyse real-time data, adjusting promotional prices based on factors like demand fluctuations, competitor pricing and customer engagement. This dynamic approach ensures that marketing campaigns are agile and responsive to market conditions and provide increased ROI.
AI-Powered Email Marketing:
Email marketing will become more effective with AI-driven personalisation. By analysing customer behaviour and preferences, AI will tailor email content, optimise send times and predict the types of promotions that are likely to resonate with specific customers.
AI-Powered Voice Search:
With the increased adoption of voice-activated devices, shopping centres will optimise their online presence for voice search with real time translation.”
“Digital PR: A Vital Strategy for Shopping Centre Success
In the competitive retail world, shopping centres must continually adapt and innovate. Asset managers strive to maintain steady rent flows, increase rental rates, and secure favourable tenant deals. Centre managers focus on meeting targets, boosting footfall, enhancing customer experiences, increasing sales, and managing costs. Digital Public Relations (PR), especially when aligned with industry publications, is a key strategy for achieving these goals, with added benefits in SEO.
Asset Managers: Enhancing Rent and Tenant Relations
Asset managers can use digital PR to ensure their shopping centres remain prosperous and appealing.
- Attracting Quality Tenants
A strong online presence built through digital PR can attract high-quality tenants. This presence, bolstered by SEO, ensures the shopping centre ranks highly in search results, making it more visible and attractive to potential tenants.
- Boosting Shopping Centre Reputation
Effective digital PR campaigns elevate the shopping centre’s profile as a top destination, aiding in tenant negotiations and increasing the property’s value. The SEO benefits of these campaigns further enhance the centre’s online discoverability and reputation.
Centre Managers: Achieving Performance Goals
Digital PR is an invaluable asset for centre managers aiming to hit their operational targets.
- Driving More Foot Traffic and Sales
Strategic digital PR can greatly increase visitor numbers, often leading to higher sales. Promoting events and special offers online, optimised for SEO, can draw larger crowds. This approach ensures events are easily found in search results, attracting more attendees and improving overall footfall.
- Improving Customer Experience
Using digital channels allows centre managers to directly engage with consumers, gather feedback, and enhance the shopping experience. This approach, supported by SEO, ensures that promotional content reaches a wider, more targeted audience.
- Efficient and Cost-Effective Marketing
Digital PR offers a budget-friendly way to reach a broad audience, crucial for managers who need to balance marketing impact with budget constraints. The SEO aspect of digital PR ensures that marketing efforts are not only cost-effective but also highly targeted and measurable.
Measuring Success: Analytics and Feedback
The effectiveness of digital PR campaigns can be evaluated through analytics and customer feedback.
- Analysing Online Engagement
Assessing online interactions and engagement helps gauge the reach and impact of digital PR efforts. This analysis includes monitoring SEO improvements, such as increased organic search traffic and higher search engine rankings.
- Feedback Loops for Continuous Improvement
Feedback obtained through digital channels offers valuable insights for refining strategies and aligning with customer preferences. This continuous loop of feedback and improvement is essential for maintaining a competitive edge in the digital space.
- ROI Assessment for Asset Managers
Asset managers can use engagement metrics and customer feedback, along with SEO analytics, to assess the return on investment of digital PR campaigns. This assessment links marketing efforts to tenant satisfaction and property valuation.
Digital PR is more than a marketing tool; it’s a critical component of a successful shopping centre strategy. It offers asset managers a way to enhance property value and tenant relationships, while centre managers benefit from increased footfall and improved customer experiences. The added SEO benefits of digital PR further ensure that shopping centres remain visible and appealing in the digital age, helping them navigate the complex retail landscape with greater success and efficiency.
“In the ever-evolving landscape of retail marketing, several forthcoming trends are set to structure the industry next year.
Personalization continues to be a dominant force, with an emphasis on hyper-personalized experiences driven by AI and machine learning. Centres and Brands are leveraging data to create tailored recommendations, customized content, and individualised shopping journeys, aiming to forge deeper connections with consumers.
Furthermore, influencer marketing is evolving beyond social media endorsements, with brands collaborating with micro-influencers and content creators to reach niche audiences authentically. The fusion of online and offline experiences, again facilitated by technologies like augmented reality (AR) and virtual reality (VR), is gaining traction, enabling retailers to create immersive and interactive shopping experiences.
In addition, sustainability and ethical practices are increasingly becoming central to marketing strategies, with consumers favouring brands that align with their values, pushing retailers to emphasise transparency and eco-friendly initiatives in their messaging and operations.”
“2024! A year when fortunes will be made!
With a high likelihood of an Autumn 2024 election, riding on the coattails of potentially falling interest rates, the question is whether the current Government can present a convincing and coherent case, that will attract investment into a demonstrably growing UK economy. In the final weeks of 2023, while the Government was focused on responding to headlines related to past decisions or on legally and practically challenging policy areas unrelated to economic growth, clarity on direction of travel seemed in short supply.
And yet the world has changed. Accelerated during the Covid pandemic, the changes are leading to increasingly user and occupier focused real estate that deliver realisable value to occupiers and businesses. The imposed solutions of yesteryear are giving way to a more curated and fluid offer through responsive management which delivers resilient income with social value.
The new understanding creates opportunities that unlocks individual buildings, places and whole town and city centres. With most investment businesses having rebased their portfolios, there is now value add headroom for decision making.
The Levelling Up and Regeneration Act 2023 introduces potentially wide ranging powers that could be revolutionary in their application, if triggered by enabling legislation. Across the political parties, there is an increasing political appetite to add balancing voices to the single issue entities or self-appointed voices, that are hamstringing planning decisions and stifling the changes needed to support economic growth, especially needed outside the key metropolitan areas.
With all political parties recognising the criticality of real economic growth in sustaining the country, enabling social mobility and to pay for the services needed, there is significant private sector capital ready to support investment but only if the political will is strong enough to ensure change can occur within a definable horizon.
2024 is the catalytic year when careful assessment of opportunities, coupled with a political imperative to show potential economic growth in the short term and from 2025, will lay the foundation of fortunes during the next Government.”
“2024 is going to be a pivotal year for our high streets, towns and shopping centres. After the long-lasting impacts of the pandemic in 2020/21, and the economic and political chaos of 2022/23, we need a period of stability to help plan and fund the growth and transformation of our towns and shopping centres. But we are faced with political uncertainty. The Conservatives are likely to call an election in the second half of 2024 – which is going to place a “drag” on effective decision-making and investment as politicians prioritise campaigning and winning the election.
The Government-backed capital funds (including the Future High Street, Towns Fund & Levelling Up Funds) have helped to deliver some critical projects in town centres, but rising costs (fuelled by rising inflation and the cost-of-living crisis) will most likely mean that many projects will not be delivered – and promises made to local stakeholders and communities will be broken.
More than ever, the success stories in 2024 will be where the public and private sector work together, and engage more effectively with stakeholders and communities, to understand what is needed to ensure the long-term transformation of our centres from an economic, commercial, environmental and social value perspective, and how this can be effectively achieved and funded.
Hopefully Homes England will take an even more proactive role in 2024 to help deliver the regeneration of our centres, and build more quality and affordable homes.”
“Retailers’ occupational strategies will be key as they determine demand for shopping centre space and the necessity of repurposing vacant space.
Increasing costs versus consumer demand and constraints of the cost of living crisis. Q1 2024 will be a very telling time.”
“Retail will continue to be a tough environment – despite falling inflation, retail sales growth is muted and, coupled with ongoing cost of living pressures (which will continue to bite through 2024) and direct cost pressures on the retailer (staff wage demands and cost of debt) I think retail as a sector will struggle. We’ve seen some consolidation across markets and perhaps more to come. That said, the better retailers who really know their customer, have strong omni-channel presence and invested in their brand/products, will outperform.
As a retail property sector, a lot of rent rebasing has already taken place and buyers should be looking forward. Strong locations will remain so, weaker ones pose a challenge and need new ideas and capital (the only issue being where this capital comes from….).
From a retail property management perspective, the scope of the tasks being undertaken continues to grow, with ESG and Customer Experience becoming increasingly important amongst the more sophisticated investors, less so for the speculative invester. We’re also seeing technology advances (both in terms of building tech and tech to support our business) and the use of AI will continue to rise – at JLL we launched JLL GPT, which is being used frequently by colleagues, however the scale of opportunity continues remain and we are investing time to thoroughly understand how we can maximise its potential. Other key points for 2024 –
- The role of the Property Manager will continue to evolve and we need to invest in the best people (be they Surveyors, Centre Directors, wider Centre Managements teams or Asset Managers) in order to deliver for Owners and Customers.
- Placemaking and activation of places needs to be prioritised – those places who have reduced marketing budgets will struggle to differentiate, and that will continue to hurt them.
- The role of retail in communities and creating Social Value is clear and needs to be maximised and invested in.
- Service Charges will increase – there remains a huge backlog of works in older retail locations and owners need to invest to maintain standards. Retailers already have a tough time, they don’t need to be wasting time dealing with leaks damaging stock and lights not working outside their stores.”
- If interest rates come down we might see more developers in the capital
- More drive towards sustainability – achieving sustainability via built environments
- More pressure on office spaces with people returning to work post Covid
“2024 will hopefully see a strong recovery for retail – with the continued falling of inflation and hopes for a cut to interest rates. However air some caution with everything going on in the world and the consequences associated, especially for the supermarket/convenience sector. However there are many positive news stories for retail; many major Landlords and Asset Management firms reported large improvements in void rates at the end of 2023 and various retailer announcements including the opening of Asda Express sites, Poundland continuing to expand, upsizes across many of our well known and loved High St brands and rumours of many London centric brands looking to expand outside the capital; Sephora, Uniqlo, Reserved etc. The general sense is positive – long may it continue!”
“Technology Integration: Continued integration of technology, such as augmented reality (AR) and virtual reality (VR), to enhance the shopping and leisure experience. This could include virtual try-ons for retail and immersive experiences in leisure spaces such as the recent opening of F1 Arcade.
Experience-driven Approach: This has been a predicted trend for years but I really think that in 2024 a notable shift will occur in regards to providing and creating unique and memorable experiences for customers, combining shopping, entertainment, and community engagement to attract and retain visitors.
Health and Well-Being: The ongoing emphasis on health and well-being will lead to changes in the design and offerings of retail and leisure spaces, promoting wellness activities and services. A leading example of this in 2023 is the winner of The Revo’s Best Local Authority/Private Sector Partnership category where The Dolphin Shopping Centre converted a 20,000 sq. ft department store into a vital health facility for Poole and its surroundings in collaboration with The NHS.
Urban Development Trends: Property development is and will see increased attention on urban regeneration projects, transforming areas into vibrant, mixed-use spaces that include residential, commercial, and recreational components. A leading example of this is the Canada Water redevelopment with a vision “To build a place for everyone, from all walks of life: office workers, families, students, retired people, and businesses big and small, international and local. Somewhere that makes a positive mark, but also treads lightly. With the perfect mix of homes, shops, offices, places to go and things to do and see that will make this a great place to live and work.”
“I predict a bit of a bounce back for Retail where it sits alongside uses (particularly leisure) and quality urban place and in well-trafficked areas of city centres and contraction of retail in less prime areas stimulating reinvention through a new focus. Consolidation of retail and an increase of independents interspersed with other local businesses in smaller towns. A greater focus on the wider community and environmental benefits alongside commercial viability and more weight given to the long-term resilience of our urban centres.”
“Backing Bricks – Hotspots for fashion retailers in 2024
The importance of brick-and-mortar fashion stores will become even more prevalent.
Flight for the best – brands will continue to reposition and upscale their offer within key retail markets often in prime city centres, taking space where prominent voids have created opportunities for them to diversify and expand their ranges in line with their online offer.
Affluent commuter and market towns – agile working and a post-pandemic consumer behaviour has seen a strengthening for retail in smaller towns, particularly for food and beverage outlets.
Out of town retail ‘perks’ – the resilience and convenience within this market continues to drive popularity amongst consumers and feed demand for mass-market retailer stalwarts. Limited space will continue to drive up rents.”
The best of the Rest – the move of certain brands out of second tier high streets and a rebasing of rents, is presenting an opportunity and a surge in demand for value fashion retailers to enter new markets, often to become the main show in town and keeping the hopes of survival for challenged town centres alive.”
“I’m expecting to see more medium sized towns taking positive action in rethinking their retail cores and major retail assets and how these can be repositioned and redeveloped. I think we will be busy in developing Visions for our towns.
Thinking may not be immediately followed by action. With interest rates high, I expect the delivery market to remain challenging, particularly around major investments, though there will likely be space for important enabling works.”
“Property will continue to be a relatively turbulent sector, with things stabilising and greater access to sustainable funding from Q3 onwards. Good quality imaginative retail will continue to be attractive and hold a key place in the evolution of mixed-use town centre repurposing.”
“I think we can expect to see a continued trend towards repurposing, with densification of towns and cities. I think there is a new space for reduced retail, but increased entertainment, food + beverage space.”
“Some real challenges ahead for 2024, have covered them from a retail/shopping centre and ultimately a people-centric view;
- Impacted consumer spending- cost of living crisis, inflation, mortgage rates, interest rates,
- Pace and scale of digitalisation- AI, social commerce, omni channel, service retail
- Political landscape – Russia-Ukraine (Israel-Palestine) conflict impacting commodity prices and supply chains. UK Government policy as we near an election.”
“Retail will continue to experience a period of significant change.
During lockdown disposable income increased, and spending in certain categories (such as clothing, outdoor equipment and home products) spiked. But over the last year or two the cost of living crisis has resulted in consumers becoming more cautious. Product demand is difficult for retailers to predict, and the current market is very challenging. That said, retailers with strong customer relationships will be in the best position, particularly those who understand that many customers care about the authenticity and values of businesses, not just what they sell.
New entrants are beginning to appear in the high street in the shape of niche independents. Local food and drink producers and independent retailers are well-placed to provide the unique experiences visitors now demand.
But these potential opportunities need to be supported by a real emphasis on people shopping locally, fit-for-purpose social services to help attract more people to city centre living, and businesses encouraging workers to return to their city centre offices, rather than simply accepting that hybrid working is here to stay and assuming that home-working continues to be the new normal.”
“With the potential in 2024 for the introduction of the Protect Duty as it passes through parliament before becoming law, then I think what’s in store for the industry is confirmation of the importance of safety and security in our Publicly Accessible Locations. In an industry where margins are small, and budgets are challenged it is important that safety and security is never overlooked. It is also important that as an industry we shouldn’t wait for a law to be passed to be confident that our premises are safe and secure whilst also evidencing to the visiting public that a duty of care towards them is being given its highest priority. Unfortunately, the next crisis is always around the corner and being prepared and ready to meet that crisis head-on, has to be a priority!”
- Martyns Law (protect legislation) and the impact this will have on shopping centres, retail destinations and events
- Increase in national minimum wage and how this will potentially shift security away from manned teams to more hybrid options to keep costs reasonable for business
- Car park safety bill
- EV vehicle risks – a more robust approach taken by insurance companies
“2024 will see a continuation of disruptive events that will affect our sector. Things that occur thousands of miles away can and do have an impact here at home. Protest activity will continue on many fronts – environmental, political and humanitarian – with escalations likely, particularly if international conflicts continue. We should bear in mind that over half the world’s population will be invited to vote in national elections throughout 2024 with the potential to have a further destabilising effect.
The scourge of antisocial behaviour is also likely to rise with perpetrators becoming braver and law enforcement continuing to struggle with resourcing challenges. Thieves will continue to feel as if they can act with impunity in the knowledge that there will be little if any consequences for them in the unlikely event that they are caught.
We, as a sector, need to work closely together to target constructive challenge towards partners and press for more meaningful support if we are to maintain a safe space for retailers and shoppers.”
“There is going to be a big shift in the requirements of security teams in 2024 – minimum wage increasing is going to put tremendous pressure on service charges and there is a potential for reductions in manned guarding and more of a push towards hybrid models (tech and manned guarding).
The protect legislation may be published this year and will change the way in which security and safety is managed in all publically accessible locations.”