There is a shopping centre boom taking place across the UK, with new research from global real estate adviser DTZ stating investment transactions reached £2.7bn during the first three quarters of 2013, more than in the whole of 2012.
One of the instigators of this development and a beneficiary of it is the Australian retail giant Westfield. Despite opening up Westfield London in a global recession back in 2008, sales at the shopping centre have grown by over 40 per cent and footfall by more than 20 per cent in the past five years. Two years after Westfield’s Stratford City opened it has notched up annual retail sales of over £940m and proudly tells of its 99 per cent shop occupancy rate.
With Kidzania, Cath Kidston, Fat Face, Clarks, Bobbi Brown and Molton Brown becoming the latest brands to join Westfield London this autumn, adding to the recognisable retail names of Top Shop, Zara and Longchamp, the group is in good stead to continue its impressive progress.
A part of this vast growth is the focused and thorough Director of Operations, Bill Giouroukos. Following nine years in various marketing, leasing and management positions, he kicked off his Westfield career in 1994 and oversaw Management, Marketing and Specialty Leasing across the Australian and New Zealand real estate portfolios throughout the nineties. From 2002 he was involved in establishing the company’s Chicago office that oversaw the Midwest and East Coast of the US portfolio.
With the shopping centre group tying up a £1bn joint venture partnership with real estate firm Hammerson in January this year, Croydon is next on its to-do list. Speaking to Retail Gazette at the annual British Council of Shopping Centres (BCSC) conference in West London, Giouroukos explains future plans, why Stratford is such an exciting place to be and how the new mega-mall in Croydon could differ to its British counterparts.
“The Croydon development is going well, he says. “We’re just working out the plans that are the most relevant to the marketplace. We’re in the early stages of it but we’re very keen and positive on it.”
Westfield can divide opinion with consumers, some, especially young people love its convenience, cleanliness, entertainment offerings and huge range of shops but others complain about the lack of air inside and overcrowding that can occur on busier days. Will the proposed Croydon store be different to Westfield London and Stratford City?
“Every centre is different. Croydon will be different to Stratford City and Westfield London and we have about 200 retailers who work across both. A great example is Apple who houses two flag ship stores at Stratford City and London. There will be elements that will be new and exciting and there will be areas which are new and innovative that none of the other two have because life has moved on again. These are things we are working through with Hammerson all the time.”
‘Pop-up shops’ is a buzzword of 2013, and with Philips recently producing a memorable example in London’s Brick Lane, which boosted footfall and increased shopper engagement in one weekend, it doesn’t look like the pop-up trend will leave us just yet.
“Our best pop up experience was during the London Olympics in the street at Stratford City with Mini who did a phenomenal job, he says. “They had a car, merchandise, technology, information about the legacy and the story of the brand and you could tailor your own car in the back so it was a really terrific opportunity to try pop up. The days of old with pop-up’s being very dingy are long gone - now they can be extremely sophisticated.”
With shopping centre investment soaring in the UK and with 836 shopping centres now in the UK according to the BCSC, there is an awful lot at stake when choosing the right site. As Bill says, the process of research is fundamental.
“We do extensive research in every market that we go into, to not only understand what is available in terms of weighted average spend but to make sure there is an opportunity in the first place. Then we go into deep focus groups and other forms of research to try and extract what is needed.”
“(When deciding where to build), the research is the most fundamental thing. We ask ourselves is there an opportunity when you take into account where people are living, who they are, where they shop, what the competitive landscape is, infrastructure, how people are going to get to you and how they are going to navigate around you? All those things need to come together to create an opportunity.
“Then we start breaking down the site as a very site has a different layout. Some centres may be more vertical or spread out, depending on what we have to play with. The most important person is the customer because if we get it right for them then we’ll all reap the rewards - retailers, ourselves and shareholders.”
Westfield shopping centres are simply enormous –with all its UK’s centres sprawling by at least one million square foot. Buying up prime land in the UK is no mean feat with house prices and land prices rising year on year. How do Westfield do it?
“It’s a complex question and I don’t think there’s a model answer to that; sometimes we do joint venture partnerships and sometimes somebody is opportunistically selling. It can also be about amalgamating spaces and can involve working with local authorities, where they may be land that may have had a different use and that needs to be gentrified,” he says.
“Stratford is a unique example as it was a total regentrification of a whole area that wasn’t just about a shopping centre. It was about bringing residential, retail, commercial, hotels together – and of course the legacy of a park that will live on to create a true town centre and a infrastructure. That’s a completely different evolutionary story to Shepherd’s Bush, Merry Hill, Derby or World Trade Centre. So every story’s different!”
Last week, the shopping centre turned heads with the announcement that you can now test drive and buy a car at Westfield London. Giouroukos says the ‘exciting’ move, which will allow customers to test drive a Tesla Model S electric car from the car park for the first time, will bring together sustainability, high-end technology, retail and theatre. How much of a role will new technology play as Westfield moves forward?
Giouroukos immediately sits forward and seems very keen to talk about this part of Westfield’s future. “Every touch point is somehow going to be involved with technology and we’re very keen to continue that journey, he says with sincerity. “We’re very big believers of technology and its role in our lives and moving forward. I can tell you what we’ve done to date has been quite successful.”
He talks up Westfield’s partnership with digital media company Ocean Outdoor, who analyse people’s gender as they walk past the shop front to make offers to them. “It’s doing very well and that’s a success story. We also feel very positive about mobile technology and recently launched the first personalised app for consumers who can now receive tailored offers from their favourite retailers,” he adds.
“In terms of the technological future, there is so much coming at us and I’m not sure what will win out in the end, he says with a pause. “But we’re very keen to partner up with people and explore! We’re very excited about the way that retailing is going.”