Inside

Why retail must reachout to Citysumers

Urbanisation is one of the biggest macro trends of our time, with Europeansincreasingly choosing to live, work and play in the city.

As a result the retail real estate industry has returned the modern mall conceptto the city and retailers and landlords are chasing a growing urban population oftrend leaders – linked by interests and attitudes that transcend borders.

Among this new generation of ‘Citysumers’ (for City-Consumers), who numberin their hundreds of millions, are experienced and sophisticated urbanites, fromBerlin to Beijing, London to Los Angeles, who are ever more demanding and moreopen-minded, but also more proud, more connected, more spontaneous andmore adventurous, eagerly snapping up a whole host of new urban experiences.

So how can retailers and retail developments reach out and engagewith this influential yet fickle urban tribe?

We’ve talked to four of you who shared with ‘MORE Vision’ their view in anexclusive interview - Together with key data, useful links and must-see video,it makes the second issue of MORE Vision.

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every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

MORE+ Vision n°2September 2011

• The trend briefing • Interviews:Greg ClarkGDRBoxparkPerella WeinbergECEHammerson

• What is MORE+ Vision?• What is MAPIC?

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every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

Where does the trend come from ?*The big cities are getting bigger. If it wasn't for China (43%), Africa (33%) and India (29%),the world would already be significantly more urbanised than the 50.5% it is today (CIAThe World Factbook). Close to 180,000 people move into cities daily, adding roughly 60million new urban dwellers each year (Source: Intuit). By 2050, the global urbanpopulation is expected to be 6.3 billion, or 70% of the global population at that time(Source: UN). By 2030, China will have 221 cities with more than 1 million people, andIndia will have 68. In 2010, Europe had 35 (Source: Foreign Policy).Serving Citysumers within their urban environments requires brands, retailers and mallowners to differentiate their offers from out-of-town malls and to tailor their products,environments and campaigns to appeal to savvy urban audiences and the sense of place.This can be for anything from practical reasons (offering appropriate shapes, sizes andfeatures of urban goods and services), to showing the brand 'gets' it (addressing busy anddiverse lifestyles), to contributing to the quest for social and environmental sustainability.

Here are just three drivers behind the Citysumers trend:• Urban boom: The huge and continuing increase in the number of urban dwellers allaround the world.

• Urban might: The ever-increasing disposable wealth and power of cities and thosewho live in them.

• Urbane: The wider spread of urban culture and values across borders and beyond the cities.

The trend briefing

*Source: trendwatching.com a London-based, independent trend firm, scans the globe for the most promising consumer trends, insights

and related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”

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Consumption-wise, the fast pace and ever-chan-ging nature of urban life guarantees Citysumersan endless number of new and fleeting socialconnections, experiences and (commercial) temp-tations. In fact, urban culture is the culture thesedays. In thriving mega-cities, whose economic andcultural power already often surpass that of entirenations, Citysumers' identities will often be closelytied to a city's culture, its brand, its heritage, its'being'. This means retailers delivering city-specificproducts, services and communications that trulycapture a city's character can find a great, humanand fun way to pay respect to Citysumers.

Citysumers tend to be more open-minded. Thismeans that a large urbane audience is up forretailers that challenge, thrill, titillate, or even shock(just as long as it's done in the best possible taste;-). At the very least, retailers and shoppingenvironments need to show some personality,loosen up and embrace urban culture, in all its grittyglory. Risky? Yes. But not as risky as being bland.With online access making everything available toconsumers from Copenhagen to Cairo, impose anoft-forgotten scarcity through limited locationproducts. The upside? That scarcity will be reflectedin Citysumers' engagement, excitement, the senseof a store or mall as destination and ultimately theirwillingness to pay premium prices.

Opportunity 1: Urbane culture is the culture

Opportunity 2: Challenge, thrill and locate

*Source: trendwatching.com a London-based, independent trend firm, scans the globe for the most promising consumer trends, insights

and related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”

every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

Selected linksJohn Lewis Partnership is the officialdepartment store partner for the 2012London Olympics and will have adedicated in-store Olympics section atits new Westfield Stratford Cityflagship, directly opposite the mainstadium.

DKNY Fragrances are a popular way tocapture a city's essence and high-endUS fashion brand and retailer DKNYreleased a fragrance "Love from NewYork for Women", while the city ofBeverly Hills created its own line ofthree scents to "evoke what life is likefor the Beverly Hills woman".

American Apparel The controversial USfashion retailer promotes its verticallyintegrated business model, highlightingthe fact that it minimises the use of sub-contractors and offshore labour andthat knitting, dyeing, sewing,photography, marketing and design allhappen in its Los Angles facilities. Thisshows that a ‘Citysumer’ heritage canbe transferred to the mainstream.

4More links on trendwatching

Selected linksUniqlo This August the Japanese fast-fashion retailer opened four pop-upstores around New York ahead of theopening of two city flagships. Two of themobile-stores were moved around keyholiday locations and New York festivals.

Shaftesbury and Cap Co The Londonlandlords for ‘retail villages’ Seven Dialsand Covent Garden successfully workedtogether to be included in Vogue Fashion’sNight Out event on 8 September this year,extending it beyond the West End.

Starbucks In August 2010 the coffee chainlaunched a new range of ultra-premium,single-origin coffees only available inlimited quantities in metropolitan marketsincluding: New York City, San Francisco,Los Angeles, Washington DC and Miami.

Yahoo! In December 2010 in San FranciscoYahoo! installed digital screens in 20 busshelters on which commuters played videogames against each other. Passengers couldchoose which of the 20 specifiedneighbourhoods they would like to representand the winner was rewarded with a musicblock party featuring the band OK Go.

4More links on trendwatching

Can a shopping environment capturethe city in the same way as a product?

Can the influence of Citysumer tastebe taken to smaller towns or across

borders?

Post your answer4here

Selected videoForever 21, Times Square

How do you see it?

Which retailers for you havesuccessfully conveyed

personality?

Have you played, or would youplay, a street game in a public

realm space?

Post your answer4here

Selected videoYahoo!

How do you see it?

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every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

*Source: trendwatching.com a London-based, independent trend firm, scans the globe for the most promising consumer trends, insights

and related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”

Despite ever-increasing amounts of time spent online,audiences aren't retreating into virtual worlds. Aucontraire, Citysumers will forever enjoy connecting withother, real-life human beings, and embrace the choice,the excitement, the frenetic pace, the spontaneity, thechaotic vibrancy offered by urban life. In fact, 'online'(especially with smart phones being the new laptops),increasingly drives and enables offline encounters, forwhich shopping centres are the ideal platform.

Surrounded by the urban panoply, many time-starved,choice-rich, smartphone-clutching Citysumers look toretailers and shopping centre owners to bring themever more varied and instantaneous experiences,especially if those experiences are fast-paced,transient interesting, physical, interactive etc. Savvy,wired urbanites increasingly have temporary access toalmost everything. Retailers and retail destinationsneed to engage with super-spontaneous and seriouslyspace-deprived consumers who want to be more thansimply sold to.

Opportunity 3: Enabling contact

Opportunity 4: Enriching the urban canvass

Selected linksGeomium is an iPhone app launched inSeptember 2010 in London that informsthe user of where their friends are, whatevents are on in their area, as well asfeeding them special offers andpromotions in the area.

Best Buy In June Best Buy confirmedthat it is to roll-out its shopkick walk-inrewards initiative to all of its 1,300 storesfollowing a successful trial in August2010. Shopkick provides unique rewardincentives, offers and engaging gamingfeatures for customers in-store.

Gowalla This Foursquare competitordecided to curate its content for selectcities via City Pages, providing a displayof popular places and what's "hotnow.” Malls are featured, includingthose offering free Wi-fi.

Ticketmaster has added Facebookintegration to its interactive seat maps.The feature allows users to share liveevent plans by tagging themselves intheir seat, thus allowing their Facebookfriends to see where they are sitting.

4More links on trendwatching

Selected linksRalph Lauren In November 2010 theUS luxury brand and retailershowcased a 'four dimensional'display on the facade of its stores inNew York and London to celebratethe tenth anniversary ofRalphLauren.com. The images werecombined with music and fragrancesfor an extra special experience.

Snapgoods enables people to rentother people's belongings, whileRent the Runway allows women torent designer dresses (with same-daydelivery available in NewYork City).

IKEA For one week in December2010, Parisians waiting to catch thebus had the opportunity to wait incomfort as the Swedish furnituregiant had decked out 12 (oftencrowded) bus stops with comfy sofas,shelves, lighting and decorations.

4More links on trendwatching

Can shopping centres use location-based applications to bring people

together at their venues or will theysoon be viewed as intrusive?

Do shopping centres do enough toact as platforms for people to meet

and engage?

Post your answer4here

How do you see it?

Selected videoRalph Lauren

How do you see it?

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Selected videoTicketmaster

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Have you seen a quirkypromotion on the street which

has inspired you?Would you ever rent rather than

buy to save money and space?

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every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

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The city expert’s view: Greg Clark, city advisor andstrategist

Are Citysumers really dif-ferent and why do theymatter?It’s important for people tosee the bigger picture and tounderstand that urbanisationhas been one of the pheno-mena of recent times. We arein a process of social and eco-nomic change and this urbani-sation of Europe’s populationis going to become stronger,so this is a transition that hasbecome and will remain fun-damental and Citysumers willbecome increasingly influen-tial. Their needs are differentbecause they are living andworking in the core of theircities and they are choosingto spend time and interactwith those around them, sothe retail and leisure offerneeds to match their needs

as residents and providethe amenities and facilitiesthey demand.

So what should retailspaces look like to appealto Citysumers?Citysumers have taken anactive decision to live aroundpeople and a lot of their workand social time is encounter-driven, so it’s vital that retailenvironments and highstreets create those opportu-nities. Leisure plays an im-portant role, such as cafesand coffee shops, while theoffer will undoubtedly needto be biased towards ser-vices – from hairdressing andnail bars to specialist food,fashion and eating places.There are opportunities for allsorts of retail niches.

And what can develo-pers do to enhance theircentres?Firstly, we have alreadyseen the emergence ofmixed-use development wi-thin urban spaces whichmix retail, residential andleisure. The advantage forurban developers and ope-rators is that city centre re-tail will continue to makesense even in the face of e-tailing and multi-channel re-tail, it is very muchcomplementary. Invest-ment in public realm is alsovital in attracting those Ci-tysumers to the retail andleisure offer and here cen-tre management – whetherfor a mall or open streetsenvironment – will reallypay dividends.

Are Citysumers really dif-ferent and why do theymatter?Citysumers in advancedeconomies are likely to bemore culturally and ethni-cally diverse, to have higherexpectations in terms of in-frastructure, transport andconvenience, and a 'want itnow' attitude to retail withlate opening hours and on-demand home delivery op-tions. Their lives areincreasingly integrated withsocial networks and thosenetworks are increasinglyinteracting with the built en-vironment. Self-promotionand personal brand buildingis becoming the norm in di-gital formats, and this is be-ginning to find expression inpublic arenas where crowdsgather.

So what should retailspaces look like to appealto Citysumers?They should recognise andreflect the mix of local cul-

tures in terms of design andservice provision. They mustprovide for convenient pu-blic and private transport,with as broad a range of op-tions as possible, includingsecure storage for cyclists,whose numbers continue togrow. Retail spaces shouldprovide interactive opportu-nities both for real-world so-cialisers (publicentertainment and educa-tion spaces, for example),and the digital equivalent forsocial networkers in theform of public screens, inter-active walls and other hi-tech communicationchannels. I'd advocate a mixof fast and slow options, theformer using technology tospeed service up and pro-vide multi-purpose activities,and the latter to provideeducational, culturally-richexperiential activities.

And what can develo-pers do to enhance theircentres?

Citysumers are often star-ved of nature and greenery.Developers could makemore use of the excellenthydroponics now available.They should investigate in-teractive surfaces - walls,walkways, large scalescreens, all of which couldbe used to communicatewith consumers and pro-vide a canvass for artisticexpression. The building ofthe future will reflect, in itscolour and interactive mes-saging, the mood of thepeople passing through it.It goes without saying thatmalls should have wifi, withgeo-location available to vi-sitors. Contactless pay-ment systems andaugmented reality gamingand mall navigation shouldbe on the developer’s radar,as should audio signage.There is a general trend to-wards malls being always-open, digitally enabled andculturally integrated withthe local community.

Guest view: Kate Ancketill, managingdirector, GDR

GDR is a research consultancyproviding brands and companies withthe thought leadership they need toremain ahead in retail and hospitality.Kate Ancketill will give a Keynoteaddress at MAPIC, Cannes, France,Friday 18th November,11 am, 'ScienceFact: Future Retail'

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every 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up

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The brand/developer’sview:Roger Wade, managingdirector of ‘pop-up mall’Boxpark

Are Citysumers really dif-ferent and why do theymatter?People want their local retailcentres to be vibrant and toreflect the local area but itcan be very difficult to re-build a high street if it hasbeen left in neglect. Whatthey are looking for is loca-tions which bring togethershops, food and beverageoffers, experiences andcommunity services, whichthen acts as the basis for re-generation.

So what should retailspaces look like to appealto Citysumers?I feel that a lot of people arebored with their retail cen-tres looking the same, withthe same brands making

high streets and out-of-towncentres all look the same.That’s ridiculous. For Citysu-mers the retail offer has tobe based first and foremostaround the retail, mixing in-dependents, food and thebigger brands – but thosebig names need to do so-mething different for the lo-cation. For me it has to stopbeing about the covenantsand come from a retail base– if a tenant needs a shortlease, let them have it; if abig brand comes in makesure that they are going tobring something new. Mostof the brands really buy intothe idea.

And what can develo-pers do to enhance theircentres?

Of course the big problem isthat retail developmenttakes a long time, firstly be-cause planning takes solong and secondly becausemany local retail offers arenot controlled by a singlelandlord, which makes brin-ging change very difficult.What we’re doing with Box-park is effectively a pop-up,we’ll only be in Shoreditchfor five years so the plan-ning issues are much lesscomplicated and we havethe single ownership requi-red to push forward withchange. But what we can beis a catalyst to effect changeon a high street which hasneeded regeneration for 40years and hopefully that willmean a long-term legacy forthe area.

Urban retail centres havebecome increasingly popularamong investors acrossEurope because they are ina position to meet needs-based requirements for thegrowing urban population,while offering the singleownership advantages ofstandalone centres.Germany and the UKarguably have some of thebest examples of successfulurban retail integration, withprojects reaching out toinfluential Citysumers withmanaged projects whichretain authenticity.Leon Bressler has expandedPerella Weinberg'sinvestments in retail propertyin Germany, including theacquisition of Mfi, to becomethe second largest investorand operator of Germanmalls. He cites strong

performance in thecompany’s urban portfolio butwarns would-be investorsthat even in Germany “Youhave to be extremely focused- we have become a majorplayer in German shoppingcentres and we intend todevelop that activity.”Alexander Otto, managingdirector of ECE, adds thaturban schemes enabledevelopers to get away froma fixation on dominant,super-sized centres scale butstresses that a schemeshould aim to be the pre-eminent shopping offerwithin its local environment.“At city centre level what youwant is to hold the dominantposition in that town or city,”he explains. “There is also abig change in the way suchprojects are asset managed.Anchors are changing and

social networking isbecoming a vital way ofreaching out to urbanconsumers. It is somethingdefinitely not to be missed.”David Atkins, CEO ofHammerson, adds thatdevelopers and investorsalso need to be aware of thechanging needs ofCitysumers. In Birminghamthe company’s flagshipBullring centre had sixrestaurants when it opened,but having acknowledgedthat the companyunderestimated the diningrequirement has sincecreated a further restaurantquarter to improve andenlarge the food andbeverage. “We learned ourlesson,” reflects Atkins. “AtAberdeen, which is half thescheme size, we startedwith 26 restaurants.”

Investor reflections:Mark Faithfull, editor, RetailProperty Analyst

@markfaithfull1

@BoxparkLtd

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Vision Pavilion

For regular upades, questions, comments …

is a new initiative by MAPIC, The international market for retail real estate 16 – 18 November 2011, Palais des Festivals, Cannes, France.

Every 2 months, MORE+ Vision will pitch a new trend thatinfluences retail property strategy. MORE+ Vision is a multi-channel service composed of:• A general trend briefing, including a background on thetrend, facts & figures, useful links, exclusive interviewswith retail real estate professionals

• An open and animated dialogue on MAPIC web platforms

MORE Pavilion is a special MAPIC exhibition area,grandstanding four key trends for 2012: multi-channel,culture & shopping, SLOW and client gratification. Thepavilion will mix with an exhibition of new retailing conceptsand innovative technologies. It will also spotlight the natureof tomorrow’s shops and stores in a demonstration areadeveloped by the Lille retail industries cluster (PICOM) called'The New Shopping Experience.' Last but not least, retailsocial media strategy will be covered in a conference series,on the MORE Pavilion, throughout the duration of the event.

ContactsAny questions on MORE+ Vision, please contact Editor: jean-marc.andre@reedmidem.com

Want to advertise in MORE+ Vision, please contact wendy.genteuil@reedmidem.com

CreditsContributors: Mark Faithfull • Joanne Archibald • Jean-Marc AndréAcknowledgement: MORE+ Vision wishes to thank the interviewees for their kind participationDesign: Frédéric Beauseigneur

Source: “trendwatching.com, a London-based, independent trend firm, scans the globe for the mostpromising consumer trends, insights and related hands-on business ideas. Its free monthly Trend Brie-fings get sent to more than 160,000 business professionals in 180+ countries.”

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