In the retail edition of “Transition of the Dutch retail structure: from value to vitality” Colliers Research & Consultancy analyses recent market developments and gives her views on the significance of these developments in the future of shopping. The effects of the transition are far-reaching. The established order is put to the test and that requires a different approach for policy makers and real estate professionals.
In recent decades the retail market was boosted by population growth, increasing prosperity and expansion of urban areas. However, the market has changed dramatically in a short period of time and has even become part of the public debate. Media reports about the success of online retail, increasing vacancy and / or bankruptcies of established retailers appear almost every day. This also reached the political arena. Minister Kamp of economic affairs recently announced the assembly of a national team that will be cooperating with the retail sector, real estate professionals, municipalities and provinces to start thinking about solutions for the excess square meters of retail space.
"Vacancy is considered a social problem that needs to be fought from within the quality of life in towns and cities."
Many people summarize these current changes in the retail market under the heading 'transition'. However, the transition is comprehensive and still has a long way to go. Although the transition has been much discussed – doomsayers predict the end of physical stores is near, and opportunists claim that old times will return - there is little known about the actual significance of the transition for the future of shopping.
"The real problem is not so much the transition and its consequences, but how the retail structure and shopping areas must adapt to the demands of the new era."
It is a recognized fact that our shopping areas will have meaning in the future, but in a different way than before. The added value of physical shopping is becoming less and less prominent in terms of supply (to go somewhere to buy something), but more prominent in interaction and experience (love to go somewhere, with and between other people). Vital shopping areas are places where users (consumers and businesses) come first, where there is room for innovation (driven by local entrepreneurship and creativity of people) and where the place has its own identity (the distinctive character of the area). It is these vital areas that are best able to change along with the time, and therefore these regions have the future.
"The value of an object is not calculated in bricks, but in the nature and intensity of use. Vital areas are able to change along with time, and therefore, these locations are the future."
In a rapidly changing market the real estate profession too will get a different meaning. Previously property was mainly statistical, reactive and conservative, but now more often a flexible and proactive approach aimed at generating vitality is needed. In the past a retail project was approached from different disciplines, nowadays the boundaries between them have largely faded. Additionally, professional knowledge is interactively shared and tested. Speed of action is essential, use of data and information is a prerequisite, and knowledge of user groups is structurally increasing.
"The paradox of commercial real estate becomes visible: real estate parties aspire macro-level security, but the market in itself demands flexibility and proper attention for the user."
From a real estate profession perspective a clear trend is visible, with a growing need for knowledge and resources at macro level (e.g. information systems), with an increasing demand for micro level solutions on performance (knowledge of the local market). This shift is delineated among all involved real estate parties (retailer, owner, manager, broker, marketer, government agencies, etc.). Real estate professionals who understand how the retail market is evolving, also know how to change themselves.
You can download the complete edition on the transition of the Dutch retail market here