Paul Hanegraaf, Milligan’s Creative Navigator and Malcolm Lea, Head of Development discuss how the industry is evolving and how the ‘talk’ needs to shift.
Reporting, stories and speculation on the new normal have been overwhelming. What is your take on what’s going to happen next?
M: It is all becoming a bit tiresome and we need to start seeing less predictions and more ideas. It is blindingly obvious that no shopping = no income = no rent = no new developments for the ‘traditional’ retail/leisure thinking. The real news would be if developers were not pausing new schemes for a rethink, but implementing new ways to deliver the same experience, with safety in mind.
P: True, but there are some key themes behind all the stories, which are what we need to take note of. Mothballed developments essentially point to risk. The next couple of years will be challenged with how to manage and balance risk… risk as consumers, risks as retailers, risks as restaurateurs, risks as developers and risks for money. It might suggest that reducing risk on as many fronts as possible can migrate us closer to success.
Many have talked about Covid as a catalyst or accelerator for trends that were already playing out. Is the industry agile enough to do something different now?
P: Who knows where this goes in next three years, but today we also have to work with our responsibilities towards sustainability, at the fore. The reuse of existing buildings is amongst the most sustainable practice our industry could entertain. This will also give us the ability/agility to listen, question, discover and then deliver at a pace with the times.
Business friction is another aspect to watch closely. The old business models come up against barrier after barrier. When that happens, it is often a space for the very fast paced transformation of new ideas, new formats and new solutions – the outliers become central.
M: The impacts we see playing out as a result of Covid, are trends we discussed back in 2015. Everything changes and moves on for a reason which will affect people’s behaviour. Terrorism changed airport security and was initially seen as a pain by most, but people still want to travel, for the enrichment and experience of it, so we got on with it. Similarly, people will still want to go out, meet people, have a drink and a meal in a nice place (and not just in a glass box for two) and go shopping. As we keep saying – it is all about the experience and how people choose to spend their time.
So where are we going to end up?
M: We will of course be more health aware and this will affect premises and people but some of these measures are long overdue. Remember how many pastries were displayed on counters without sneeze screens before Covid? And it will come back to the experience that people want and finding a safe way to create that for them. People will accept restrictions of all sorts for health reasons, but they will not accept a lower value experience.
P: There will be new retail solutions, there will be new operating strategies and there will be management challenges. There will be a convergence of values and the necessity for new collaborative operating entities… a big shift for those just used to collecting rent.