Patrícia Araújo

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Client: JLL

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Jones Lang LaSalle

Communication and adapting to customer needs

Retailers have to adapt to a changing consumer landscape, with more aggressive marketing, greater innovation and creativity and well-defined concepts for a difficult market. Jones Lang LaSalle’s head of Retail & Consultancy, Patrícia Araújo, explains why the ‘customer is king’ more than ever before.

There has been a strong fall in consumer spending. What efforts have been made on the part of shopkeepers and developers to overcome this trend? In relation to fixed rents, what is the outlook - is the trend set for them to disappear?
Market players are already taking measures to adapt to the new context. On the one hand, many developers have been giving rent discounts so as to help their shopkeepers survive the fall in sales.

 On the other hand, some shopkeepers have been trying to adapt the product and positioning of their brand. Marketing strategies have been far more aggressive so as to capture consumers and turn visits into sales. Customer service and quality are musts for the success of any shop. The price, too, in the majority of cases, is a determinant factor when it comes to deciding to purchase. Shopkeepers are aware of these issues and have worked in the sense of overcoming the difficulties they are facing with the best results possible. There are also opportunities to explore, with new concepts that are welcome in the market or internationalisation to new markets. As to fixed rents, the perspectives are to lower them but they won’t disappear.

Is there room for the opening of new shopping centres in Portugal? What were the last inaugurations? Given the current economic circumstances, will existing ones have to undergo adaptations? What kind?
There is room for the opening of some, but few and in very specific locations. Forum Sintra and Aqua Portimão were the last projects to be inaugurated in Portugal, in 2011. The shopping centres in operation will have to be updated, given the entry of new brands which see opportunities within the current economic situation. The adaptation of shopping centres could also involve an analysis of factors that are influencing the performance of commercial equipment, from the catchment area, competition, marketing, consumer profile and new patterns of consumption, so as to evaluate performance and identify those aspects where there’s room for improvement. It means doing a kind of x-ray so equipment can be repositioned to fit the profile of the (new) consumer, tailoring market campaigns and boosting a series of initiatives that can attract customers and encourage them to buy.

Demand for high street shopping has returned. What is the profile of shopkeepers and what are the floor areas most in demand? In relation to the value of rents, is the trend to rise or stabilise?
In fact Lisbon has emerged on the high street map, which has also been rather driven by an increase in the number of tourists to the capital and the city’s greater international projection as a leisure, fashion and cultural destination. The profile of shopkeepers seeking the high street is above all international, alternative and luxury brands. In terms of locations, Chiado has become a leader in terms of high street trade in the capital, with a very complete mix between mass-market brands and more premium brands, while Avenida da Liberdade is positioned as a location par excellence in luxury shopping. I would also like to mention some locations that have become consolidated on the Lisbon retail map, as is the case with Cais do Sodré, Rua Castilho, Baixa and Terreiro do Paço, the latter having been transformed into a square with a new lease of life. Principe Real also stands out, an area which has become consolidated and is currently one of the most dynamic in the city, with an alternative and innovative trade concept, working a varied and complementary mix. High street rents are likely to keep the levels they currently have, being in the region of €90/m2/monthly in the Chiado.

In terms of consumer behaviour, have there been big changes? What are the consumer trends?
At the moment we’re seeing a contraction in consumer spending, with a consumer that purchases less by impulse and makes purchases that are more carefully thought out and well informed. Before buying, people look for information on the internet, compare prices and products, seek the opinions of friends and consult ‘posts’ on social networks. From there, the importance of shopkeepers and the commercial hardware itself will have a presence on various websites, communicating with customers in an open and transparent way. New technology has opened up a world of possibilities to retailers, but the consumer’s experience in the shop continues to be equally if not more important, indeed if the service quality doesn’t meet expectations it is unlikely that customer will repeat the experience.

What can be done to boost commerce in shopping centres, retail parks and on high streets?
Marketing has an important role to play here. As has been mentioned, one has to communicate very effectively with the customer and adapt products and concepts to meet what consumers are looking for. Initiatives like ‘Vogue Fashion Night’, ‘Chiado After Work’ and ‘White Nights’ (‘Noites Claras’) are good examples of boosting high street trade, but the shopkeepers themselves also need to make their commercial spaces more dynamic, creative and innovative. At the shopping centres level and their management, that has to be very active by developing activities to draw people in through cultural and leisure activities or others, providing that they have a well-defined concept, are undertaken regularly and well adapted to the target market.

All text and photos kindly supplied by BPCC Member: