A strategic response to challenges in our town centres

Chris Wilkinson and Steve Wilde, Queenstown’s Town Centre Manager

Chris Wilkinson and Steve Wilde, Queenstown’s Town Centre Manager

New Zealand’s town centres and CBDs face challenges as consumers adapt their shopping behaviour.

Increasingly blending digital browsing and purchasing with traditional visits to stores. This shift in demand and relevance is being felt acutely by retailers and their landlords.

 Chris Wilkinson of retail planning strategist, First Retail Group, explores some of the key dynamics driving these changes, and how stakeholders can respond.

The digital revolution is transforming the way people shop, interact and see relevance in town centres and CBDs. Online spending attrition continues to grow, translating into fewer visits to stores and less opportunity for retailers to prosper within their existing marketplace.

“These are key factors driving an increase in shop vacancy, which is a concern to our property sector and society. Empty stores don’t earn money or support jobs and are often early signs of a challenged commercial and social environment,” says Wilkinson.

“It’s in everyone’s interest to see New Zealand’s towns and cities prosper; however some councils have yet to recognise this or put effective strategies for confidence and growth, in place.”

Wilkinson queries whether traditional town centres are a dying breed?

“Will shoppers of tomorrow favour malls, big-box retailers and the internet? As a company that works with retailers, property owners and local government across the globe, we don’t believe so. Simply, towns need to meet the new market, which requires joined-up thinking and actions – best led by local government and property owners.”

Wilkinson emphasises that to appreciate the solutions, it’s important to understand drivers influencing shopper behaviour and lifestyle trends.

Consumers’ needs and expectations are changing

Increasingly, consumers are looking for convenience, certainty and comfort when they shop.

Aspiration is another key factor as retail destinations must be places people actually want to visit – not have to. Collaboratively, councils, property owners and retailers need to be mindful of these priorities when planning both physical changes and stakeholder support or capability building programmes.

Convenience is about consumers being able to satisfy their needs and wants in the most efficient way possible. Malls naturally lend themselves to this through aggregating an optimum mix of stores and hospitality businesses in one “curated” environment. “Townships lack this degree of influence so they need other strategies to help consumers see them as a credible alternative,” adds Wilkinson..

Area constraint is vital for town centres if they are going to foot it against other shopping destinations or online options. “Retail and hospitality areas that sprawl uncontrollably are some of New Zealand’s biggest barriers in the way of inner city revival,” says Wilkinson.

“Defining, then actively ‘curating’ the offer is achievable through strategy and collaboration between councils and property owners. Understanding what an ideal town centre could look like and how to achieve this begins with a comprehensive retail strategy.”

Purposeful consumer trends

Increasingly busy lifestyles mean people are leveraging technology to browse then plan shopping destinations and purchases. Today’s’ purposeful consumer prioritise retailers that have strong online visibility, assurance of product availability and are easily accessible. “These priorities often sit ahead of price or service,  reflecting just how time-poor and solution orientated, people have become,” says Wilkinson.

“Ensuring retailers and town centres are digitally enabled is vital to stemming spending attrition. Building profile, searchability and customer centric content helps ensure local businesses win and keep customers.

“Buying online and picking-up in-store is a growth area for retailers. Councils that have developed contemporary retail strategies are factoring this trend into their town centre proposition with free 10-minute ‘collect and shop’ parking zones.”

These forward-looking local authorities are also supporting retailers to build online capability and thereby ensure businesses can reach beyond traditional trading boundaries.

Certainty and assurance
Consistency of hours is a further challenge town centres face, says Wilkinson. “Typically, CBD shoppers make a special trip; however it’s often a lottery whether stores are open during weekends and public holidays. This compromises goodwill for inner city areas, effectively handing trade to competing malls and retail parks.”

Recognising the value in consistency, councils are increasingly providing guidelines to help retailers achieve a uniform offer. In some areas, landlords are including minimium hours in their leases to help protect and strengthen neighbouring traders.

Smart parking strategies

Parking costs are seen as an issue for traders in many towns. Retailers typically believe charges are the reason shoppers are deserting CBDs for free alternatives  such as malls.

A number of councils have elected to provide the first hour of parking free. This is a cost that has shifted from the user to the ratepayer and is often made reactively without consideration of other initiatives that could help retailers more strategically.
“Implementation of smart parking systems in tandem with a retail strategy is a way council can drive inner-city resilience. Leveraging the dynamic charging ability of this technology, costs can be altered or even removed to assist traders when most needed,” stresses Wilkinson.

Solutions with reach

These are just some of the many initiatives necessary for town centre renaissance and growth. It starts with an integrated strategy that develops and drives solutions specific to each area and market,” says Wilkinson.

“While many councils are actively working to support inner-city commercial stakeholders, others have yet to recognise or respond. If New Zealand is to stem spending attrition these types of initiatives need to be prioritised.

Stakeholders should talk with their councils to understand what commercial guardianship and growth strategies they have in place, their progress and future plans. Property owners must be a key part of the equation.”