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The right moves: Agents grapple with changing retail tastes

The right moves: Agents grapple with changing retail tastes

The world’s top retailers are changing how they operate and agents, architects and developers need to understand global trends in order to capitalise on an evolving market. Ongoing “globalisation” by the big brands is one driver of change and property professionals must be able to operate on the same scale as their clients, or get left behind.

Savills has responded by appointing County Wicklow man Larry Brennan as chair of its continental european retail group and he told me how the retail landscape is changing and explained their strategy. Mr Brennan has been with Savills for 25 years, specialising in the retail market for over 20 of those. He has been central to the design, letting strategy and management of most of the major shopping schemes in Ireland including Dundrum Town Centre, Whitewater Shopping Centre in County Kildare, Liffey Valley, The Jervis and The Pavilions Shopping Centres in Dublin, Mahon Point in Cork and Victoria Square in Belfast. He told me that a key to this success has been constant researching of trends in retailing worldwide and implementing the lessons learned into Irish developments.

Developing relationships with global retailers and convincing them to open in Ireland has been another part of this success and Mr. Brennan brought brands like H & M, Debenhams, House of Fraser and Abercrombie and Fitch to these shores for their first deals.

Top retailers are increasingly awarding “global mandates” to agents, to exclusively represent them in all markets and the international estate agents are striving to offer a “seamless service” across as many markets as possible. Brennan says his job is to ensure that the Savills service in the key European markets of Paris, Madrid, Barcelona, Berlin, Munich, Milan and Rome, matches the strength of their service in the UK and Ireland.

A second priority is to capitalise on what he describes as Savills market leading position in certain world markets, for example in Asia, where Savills act for brands like Apple, Abercrombie and Victoria’s Secret, to import those strengths into Europe and simultaneously export the European strengths and retailer relationships.

“Retailing is an increasingly international business” he told me and there are key “originating markets” from where retailers globalise. The dominant originating markets are the US, the UK, Italy and Spain, to a lesser degree Germany and France and the up and coming source of new brands is Turkey. There is also an increase in new brands from retailers based in South Africa and Australia, so it really is a global market.

Across Europe, every market has its own local conditions. Consistency is that both high street landlords and international retailers need estate agent input in brokering deals whilst shopping centre owners often have in-house leasing teams representing them. Fashion and technology are the big footfall drivers and the top brands continue to push for key flagship stores, particularly for prime locations, the trend is for bigger and bigger stores.

Changes in technology and demographics are increasingly impacting on how retailers operate. Chief among these is the ongoing rise in internet shopping. The UK leads the way in this area where over 15% of retail sales were over the net in 2014, compared with a European average of 8.4%. Internet shopping will continue to increase, the phenomenon is seeing global retailers developing large logistics centres in Eastern Europe in particular.

However, the market is settling into a blend of “clicks and bricks” with retailers offering a combination of convenience and value through both traditional stores and internet sales and what retailers describe as “hub and spoke retailing” is increasing. This is having a big effect on how retailers operate their shops and “shops are now a combination of a showrooms, direct sales outlets, returns centres and the final leg of the distribution network.”

Another Savills initiative is their production of “a new level of forward looking qualitative research on European markets.”

Mr Brennan sees a huge opportunity for Irish retailers. On the international stage “Irish design is always in demand, particularly on the East Coast of America or in Europes design capitals, whilst Penneys/Primark has shown brand strengths are readily exportable into new markets”

Whilst Larry Brennan’s day to day focus is still Ireland, he says that he will continue to study “best in class” retailing abroad. “You learn from what you see.”

Article by Independent