Insight

Five things driving demand for retail space

Colin Flinn looks at what's still driving demand for retail space as shopping habits change

Last year, accessories retailer Skinnydip opened 12 stores across the UK including five at intu shopping centres.

Some might say that for a youth-focused business with an already very successful online model, this kind of investment in physical space is a very brave move.

But savvy multichannel retailers like Skinnydip certainly don’t see it that way. For them, the so-called divide between online and physical retailing has never been smaller.

After all, the best businesses go where their customers are - Skinnydip employs data showing the locations of their online shoppers and the performance of in-store concessions to help decide where to open stores.

And with a 96 per cent occupancy rate and 60 new leases signing in the first three months of this year alone, a lot of other brands are choosing physical space at intu’s high footfall destinations. But what is driving this continued demand?

1. Instagrammable content

A picture of an enticing shop display at one of Skinnydip's new stores

In Skinnydip’s case, it’s about creating what co-founder James Gold describes as ‘instagrammable’ stores that not only generate new sales but also invaluable new content to drive up brand awareness and engagement.

Thousands of Skinnydip customers share pictures and videos of the stores’ signature products and designs with friends, reaching many more potential customers who might decide to go in-store or online so as not to miss out.

Store openings for Skinnydip are also big, not-to-be-missed events featuring live DJs, meets and greets with social influencers, giveaways and experiential food concepts - all live-streamed to millions of Facebook and Instagram fans, of course.

Other more established names like Lush and Lakeland are also getting in on the act by running in-store demonstrations that showcase their product ranges and expertise while bigger retailers such as Next are creating more experiences in their stores by introducing gyms, barbers and restaurants.

A picture of Mercedes Benz at intu Trafford Centre. It is one of an increasing number of brands taking pop-up space in intu shopping centres

Visit an intu centre and you’ll find plenty of these social media-friendly experiences outside of the stores there too. Brands such as Mercedes Benz, Lego, Playmobil, Sylvanian Families and Nickelodeon have all chosen intu to deliver live events and pop-ups within the malls that drive up brand engagement and create new experiences to keep customers entertained.

2. International expansion

Abercrombie & Fitch’s first UK store outside of London will also be carefully designed to give intu Trafford Centre shoppers even more to enjoy and share when it opens there this summer, featuring state-of-the-art fittings rooms with interactive lights, music and phone charging docks.

It’s the first example of Abercrombie & Fitch’s new concept store in the UK and plenty more ambitious international brands are selecting our high-footfall, experience-based destinations as part of their expansion strategies.

Victoria’s Secret is already one of the largest international brands in the UK and it continues to open at more intu centres while Australia’s biggest homewares retailer House will launch its first store with us at intu Chapelfield this summer as it begins to expand across the country.

3. Big stores getting bigger

Some of the UK’s most popular retailers are coming back for more and more space and Next, Primark, Zara and River Island are all expanding their existing units in our centres this year.

The trend among these brands is for big flagship stores in the very best, high footfall destinations where they can showcase their whole product range.

A look inside a giant new Next store at intu Metrocentre

Sometimes we can take advantage of vacant space to accommodate these upsizes – Next at intu Metrocentre and Primark at intu Merry Hill have both expanded into former BHS units for example – but with most units already let, more often it’s a case of employing creative asset management to reconfigure stores, bring together multiple units or carve out other spaces that satisfies everyone’s demand for the right space.

4. Climbing walls and hotels

Climbing wall operator Rock Up is among a new breed of leisure operators taking space in shopping centres

It’s no secret that leisure operators are becoming even more exciting and entertaining. Climbing walls, escape rooms and trampolining parks are all looking for more space in our centres and with occupancy and demand already high, we’re having to be increasingly inventive with where they go.

That can even mean building on car parks. For instance, a deck of intu Derby’s car park was converted into leisure space last year and we’re redeveloping an entire car park at intu Lakeside for brands like Hollywood Bowl, new mini-golf and bar operator Puttshack and Nickelodeon, which is launching its first UK shopping centre attraction at the centre.

This is transforming shopping destinations like intu Lakeside and intu Trafford Centre into retail resorts, with leisure and entertainment offers for all ages as well as hotels on site that give visitors more time to take advantage of all there is to enjoy.

An image showing what intu Lakeside's leisure extension will look like when work completes next year

Customers can still pop in to do a quick shop but most will choose to make a day or even a weekend of it, and spend quality time with the family.

5. More than just space

intu offers brands like Skinnydip, Abercrombie & Fitch, Primark and Nickelodeon more than just great spaces in the very best locations.

Our entire business revolves around providing customers with their perfect shopping experience: curating the best brands, events and activities and creating compelling, day out destinations for all the family, packed with surprising moments that make people smile.

And we know that the happier our customers are, the longer they stay and the more often they visit, which helps all our tenants to flourish.

With a 96 per cent occupancy rate and 60 new leases signing in the first three months of this year alone, a lot of brands are choosing physical space at intu’s high footfall destinations.

Colin Flinn

Regional managing director, intu

Mark Thomson

Job title PR manager

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