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THINK Global: Tomorrow’s World retail

THINK Global: Tomorrow

In our latest retail research report, Angela Goodings, Associate Director of Research, discusses what consumers want and how the top consumer traits are driving investor decisions.

Globally, traditional retailing is being challenged by the growing influence of technology and its impact has been felt across all geographies and retail segments. However, the best retail assets continue to enjoy near-100% occupancy, maintaining strong sales densities. So what ensures these assets continue to perform in the challenging retail landscape? Our research asserts that by focusing on key consumer traits, it is possible to deliver bricks and mortar assets, which will remain relevant and resilient over the long term.  

Our research finds that whilst consumers differ across geography and generations, there are common desires that all individuals possess. We have devised a list of the top consumer traits that drive successful retail formats: experience, convenience, value, wellness, to feel connected and flexibility.  

Experience retail blurs the lines between retail, leisure, restaurant and gaming. It is the 'softer side' of retail investment where capital is used to create emotion and add theatre into retail destinations. Whereas convenience destinations provide accessibility by car, are internet compatible with a large proportion of retailers offering click & collect, and are often grocery anchored, providing greater convenience to families. Consumers love a bargain, and that is what value destinations, which can include outlet malls, provide. Value retailers are known to attract high footfall and in regards to outlets malls specifically, consumers are often willing to travel further and spend longer at the best schemes. Lastly, lifestyle centres offer the best opportunity for investment over the medium term. Lifestyle centres combine retail, leisure and residential development. 

Angela Goodings, Associate Director of Research, comments: "The smartest investors will invest in experiential, accessible, value and lifestyle centres, making sure all types have a focus on flexibility. The fragmented nature of the retail environment means that an asset type, its consumer traits and personality, as well as locational factors, need to be assessed to understand long-term investment value." 

Alice Breheny, Global Head of Research, adds: "Making generalisations in terms of investment advice for Tomorrow’s World retail remains a challenge as no 'one size' fits all. We believe there is a need to blend top-down strategies, which deliver on megatrends and consumer traits whilst understanding local market dynamics. We remain savvy about our changing environment to ensure we do not invest in the past, but constantly engage in new trends and technologies which create spaces for tomorrow, from the products of today. We are investing, helping to create, ready to be part of, and preparing for Tomorrow’s World." 

We predict that technology will be a major disrupter of traditional retailing, but it also presents opportunities to move away from inventory centres. There is a place for both instore and online in a new 'phygital' world and those stakeholders who can combine both channels will thrive into the future. 

Further myths are analysed in our US-specific retail paper THINK US: Retail - De-cluttering the retail landscape.


THINK Global: Tomorrow's World retail Download the full report

Issued by Nuveen Real Estate Management Limited, 201 Bishopsgate, EC2M 3BN. Authorised and regulated by the Financial Conduct Authority.TH Real Estate is a name under which Nuveen Real Estate Management Limited provides investment products and services. TH Real Estate is a real estate investment management holding company owned by Teachers Insurance and Annuity Association of America (TIAA). TH Real Estate securities products distributed in North America are advised by UK regulated subsidiaries or Nuveen Alternatives Advisors LLC a registered investment advisor and wholly owned subsidiary of TIAA, and distributed by Nuveen Securities, LLC, member FINRA. COMP201700701 304196-G-INV-O-11/18

Angela Goodings

Angela Goodings

Associate Director of Research

Angela's biography