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Changing consumer behavior

1st February 2015

Technological, societal and economic changes alter the way we shop which has implications for those involved in the retail sector. Retailers, developers and investors alike need to be innovative to stay on top of the game in the shopping centre industry.

As digital technology advances and the process of globalisation strengthens the interconnectedness of marketplaces, economies and our societies change, and so do our shopping habits.

Changing consumer behavior and expectations impact on the role shopping centres play in the modern retail experience and dictate the ways in which retailers, developers and investors must act in order to stay ‘on top of the game.’

In April last year, CBRE conducted a study titled ‘How consumers shop 2014’ to discover where and how consumer shop for non-food, particularly in relation to their changing expectations of different types of shopping destinations. The firm surveyed 21,000 consumers in 20 European countries, as well as in South Africa, in an effort to understand how shopping destinations and those involved in their development and management need to adapt to maintain or win market share in an environment of dynamic change.


Overall it seems that, whilst preferences slightly change from country to country, today’s consumers have the same priorities when it comes to shopping, irrespective of their geographical location.

For example, CBRE identified price, cleanliness and security as the main factors that consumers expect to be present in shopping centres.

We spoke to Andrew Phipps, Head of Retail Research and Consulting for EMEA, CBRE, about his view on today’s consumer behaviour and how this has changed over time.

“Shoppers expect convenience, transparency (in terms of pricing and quality) and in many cases, a social experience.  Shoppers have always had high expectations of their retailers; when people were served in a local store they wanted good quality and would soon let the shopkeeper know if that wasn’t the case,” Phipps commented.

However, with the advancement of digital technology, in particular social media, the nature of conveying the message about our shopping experiences has changed.

“The difference is now that with social media the message about a retailer can travel round the world more quickly than someone could have told their neighbour about a disappointing experience,” Phipps explained.

Naturally, this poses challenges to retailers in maintaining their brand protection. But more than that, according to research, a ‘satisfying’ shopping experience is multi-dimensional and thus more complex.

“Shoppers expect good value and this doesn’t always mean the lowest price. Shoppers want a good price but the total experience is a combination of, price, availability, service, and delivery options,” Phipps commented.


One would expect the focus of shopping centres to vary between countries and cultures, depending on whether a mall is primarily seen as a place to shop or more as a social gathering point. However, across all markets, CBRE sees the importance of cleanliness, security and convenience scoring very highly among consumers, and this is no different in the Middle East.

“In the Middle East, the scale of many shopping centres makes them the default locations for social gatherings as well as the place to shop; with great epicurean delights on offer at places such as the Dubai Mall and the Marina Mall in Abu Dhabi, [these malls] make a natural location to meet friends and socialise.  With cultural events taking place during Eid and Ramadan they surpass the sole function of being a commercial entity and become something akin to a destination hub for all people,” Phipps said.

As the retail landscape grows and competition increases, new and existing shopping centres need to come up with innovative ways to attract customers.

“We are seeing the refreshment cycle shortening and the need for capital expenditure remains and perhaps even increases in importance.  It’s about ensuring the basics are delivered and then focusing on what’s going to be new and innovative, there is little point in just being a ‘me to’ centre just offering the same as everyone else,” Phipps said.


CBRE’s study on consumer shopping habits in 2014 also highlights the different expectations from different age groups with regards to the qualities shopping centres must possess. “As we might expect, younger age groups appreciate some of the social aspects of shopping centres much more than older groups – including meeting friends and taking advantage of services – notably entertainment services such as cinemas and free Wi-Fi. Because such groups tend to use public transport more, they are less concerned with parking. Interest in services generally appears to decline with age overall. Naturally, the 55-64 age group tend to look for covered shopping centres with free parking, information points, presence of independent shops and favour cleanliness over price,” the report reads.

Andrew Phipps explained that it’s not so much about providing different offerings for different age groups, but more about the way in which these are presented.

“Different age groups actually want many of the same things, just delivered in a different way.  So for all age groups the access to the shops and brands they want alongside the opportunity to enjoy food and drink with their friends and family remain important,” he said.

It’s about the “importance of having the varying elements that are going to appeal,” Phipps said, adding that in some locations, the weighting of the focus will differ, with leisure activities coming to the fore if the shopping centre is seen as more of a destination for younger people.


Lastly, online shopping is also part of today’s shopping experience and hence needs to be taken into consideration when analysing consumer behaviour. CBRE research shows that whilst consumers are comfortable with juggling a range of channels in the research and buying process (such as smartphones, tablets and desktop computers), store visits will dominate.

Perhaps comparable with the analogy that the advent of the digital newspaper has not (and most likely will not) extinguish the physical paper, online shopping will not replace shopping in physical stores.

“Online shopping is an important part of the overall shopping environment, however the simple truth is that the experience and the social side of shopping as a leisure activity cannot be subsumed into online retail,” Phipps said.

The CBRE expert added that people will continue to favour the innovations being driven by physical retail stores and shopping malls.  “The chance to dine, to shop, to be entertained all under one roof cannot and should not be overlooked.  Online will remain important but in no way will it take over retail as known today.”


Given the rapid changing nature of consumer shopping habits, what ultimate challenge does this impose on operators and investors if they want to stay ‘on top of the game’? According to Phipps, it’s knowledge.

“It’s all about being aware of what’s happening elsewhere in the world and looking at the true spots of innovation in order to be in front of the competition.  This means understanding what is a true change in behaviour versus what is just an over-hyped small everyday adjustment.  It’s also the challenge of not reacting to everything, but to being sure of what is important and looking to change the relevant things,” he concluded.