The Big Emerging Trends in Commercial Retail Space
After a sharp contraction during the COVID era, the retail sector is making a strong comeback – and like many sectors of the economy it’s returning in a very different shape and form.
As retail sales continue their recovery with a 2,3% surge in March 2024, despite a lacklustre economy, new trends are emerging and shaping the future of the industry. Knowing what’s happening at shop level is crucial for anyone involved in both the retail sector and commercial property in general.
Let’s take a look at the latest big trends in the SA retail industry and find out how property owners and tenants can take advantage of these for ongoing prosperity.
Retail becomes an immersive experience
In 2024, the world of commerce is simultaneously online and physical.
Customers frequently use apps and devices to select real products – even tonight’s dinner – remotely for convenient delivery. If anything goes wrong in the process, they expect real time assistance from customer service representatives who may not even be located inside the country’s borders.
This combination of digital and physical goes far beyond a simple dinner order. In fact, it has come to shape the entire nature of the retail industry.
- The advent of online shopping reached its peak during the lockdown period and has given customers around the world, including South Africa, a taste of what a modern retail experience could be.
- The days of driving to the mall simply to see what’s in the window are long gone as customers are able to browse entire catalogues and read reviews online.
- While some South African consumers may not be fully comfortable with a totally online retail experience in contrast to some of their counterparts in the US and Europe, the rise of the hybrid online and in-shop experience is clear to see at malls across the country.
Shop owners and managers will need to embrace this phenomenon in order to stay relevant in a fast-changing market to create memorable experiences that go beyond a simple transaction.
Here are some strategies that may be useful:
- Fitting the shop with the latest tablet devices, including large size tablets and smart TVs as wall displays.
- Training staff in the use of these devices in a professional manner to help guide customers through the digital shopping experience.
- An awareness of the safety and security requirements that come to exist once expensive digital equipment is introduced into a regular retail environment.
The internet becomes an integral part of our shopping culture
As consumers become more comfortable using the internet to order goods and services, the integration of technology is becoming more commonplace in retail spaces.
To attract shoppers’ attention in a world that has become increasingly technological, retail businesses are investing in hybrid online/offline experiences in their stores.
These days, it’s no surprise to see a large tablet in store, displaying interactive shopping guides and customisation options that let consumers take control of the buying process in a style that simulates the online shopping experience.
Similarly, the ability to order online and pick up in store using a QR code or similar system adds a level of convenience that can significantly boost customers’ perception of the store’s, efficiency, and on-trend status
In order to remain competitive in the era of hybrid digital and physical retailing, store owners will need to ensure that they have the following amenities available:
- Fast Internet access. Fibre optic cable is a necessity in every office today and this has also become the case in retail shops as the devices being used in the sales process require fast internet connections to provide a seamless experience
- A reliable power supply. Increasing reliance on technology means that power interruptions can’t be tolerated. Despite recent improvements in load shedding, emergency backup facilities are essential for every retail premises.
- Internal fittings that allow for a seamless tablet or touchscreen experience. This may be achieved with waste height counters and comfortable stools, or fully immersive experience pods equipped with screens and even surround sound systems.
Wellness and green living become the norm
As with many other types of commercial real estate, the retail sector is seeing a shift towards wellness based approaches and environmental sustainability.
Customers are increasingly expecting an overall approach from the brands that they support which is kind to the planet, and those who live on it. The implications for the retail industry include an emphasis on recycled products, energy efficiency, and health and wellness.
From a building management perspective, shopping malls can expect to see far more organic food shops, green living accessories, and sustainable goods being sold on the premises.
This shift towards green living is especially strong in the Cape Town retail space, in a city which has always had a sustainability focus. Forward thinking building owners and estate agents will be actively seeking out innovative tenants in the sustainability space from now on.
Coastal commercial real estate in high demand
A final positive factor in favour of retail space, especially in the Cape peninsula, is the uptick in demand for coastal office, industrial, and shop space in recent months.
Cape Town’s overall stability and strategic location near the coast with access to port shipping and a good road network, is driving demand from the logistics sector.
With a steady change in consumer behaviour in favour of online shopping and the growth of e-commerce, the demand for industrial real estate is growing at a rapid rate. With industrial warehousing and storage facilities outweighing supply in the city, both warehousing and retail tenants will need to move fast to secure the ideal premises before vacancies in sought after buildings dip to zero.
Take the leap into the future of retail with us
If you’re ready to expand or establish an exciting retail business in Cape Town, the current market may be ideal to launch your business. A recent trend of adaptive reuse with old or under-utilised buildings in Cape Town being repurposed for exciting commercial use offers a variety of opportunity in the Mother City and surrounding areas.
To guide business owners in the tricky process of securing a retail space, our team draws on decades of collective experience. Contact us today to start your search for the ideal retail premises.
