Retail does not need a city center
Our consumer behavior has changed radically. Stores, restaurants or cinemas attract us to the city center. But thanks to digitization, our stores, restaurants, and cinemas have faced competition in recent years.
Since we started buying clothes online and having lunch delivered to the office or streaming movies on our cell phones on the subway, we've had less and less incentive to go downtown. On my tour of major Canadian cities, I noticed that the inspiring stores could no longer be found downtown but in the belt or in between.
Downtowns need the stores, but the stores no longer need the downtowns.
So fewer and fewer people are coming to the city centers who are willing to spend. And because fewer and fewer consumers are coming, retailers will no longer be able to afford the expensive downtown locations. In Montréal, Toronto, Calgary, and Vancouver, I found entire streets in the inner cities that looked like they had been swept clean. Boutiques, restaurants - everything closed, moved, or neglected. 60% or more vacancies in former shopping miles. And here in Germany, too, the first movements in this direction can be observed here and there.
Many remaining stores can only offer a reduced selection of goods, which is hardly attractive to consumers. The consequence: even fewer visitors. This downward spiral of frequency loss and lack of supply cannot be stopped.
A city center thrives on condensed shopping, gastronomy, and entertainment offering. But the inner-city offerings in such a confined space are already so full of holes that we hardly find any joy in the city center anymore. It's simply no longer fun to go to one store after another. The gaps in moments when we feel joy while strolling have become too great.
In this respect, the remaining frequency in the city centers is not only quantitatively lower than in the past but also brings a different quality. In our discussions with our customers, we observe that although we have reasonable footfall, consumer behavior in urban areas is virtually in the basement.
"Customers" come to get advice, feel products and see the quality for themselves. Canada Goose is a fantastic example of how to deal with changes in consumer behavior. I tested a high-priced winter jacket in an ice room to see if it delivered what it promised. I was immediately convinced. However, I did not buy the jacket on-site. An order ran via the IPad, then on the sofa in the Airbnb in Toronto - the delivery is in Germany. The store sent me a product link to my device after the test. An excellent shopping experience for me. I had much fun with the staff on site. They thoroughly understood me as a customer, and my needs were proactively met without being asked.
We no longer stroll through many stores - people who like to consume drive specifically to the stores that interest them. After the visit, they return to the car or the subway. And yes, I, too, have made a beeline for the store in a mall and not visited another store afterward.
"Destination stores" - that's what the stores in the prime locations have become. In other words, you don't just walk into stores because you're already there, but stores that we drive to specifically - or not. If we go specifically to these stores, they don't have to be in the city center or the highstreet. Location, location, and location - this only applies to tourist hotspots, where enough strangers wander the streets without orientation. In all other places, the success of a stationary retailer no longer depends on location; instead, whether its offering is competent and unique enough to justify a visit counts.
This exciting offer can often be better realized in off locations. The rent per square meter is cheaper, and there are better ways to store a broader selection in more space so that it can be generously displayed. The fantastic stores were in Toronto's Kensington Market neighborhood, not the Eaten Mall. Like a hardware store, a great one doesn't have to be downtown. Downtowns need the stores, but the stores don't need downtowns anymore.
The thinned-out offer in the city centers will not be characterized by insolvencies but by the migration of stores. The pulsating life that used to also rage in the side streets of the complete city center is now concentrated on the best-known shopping miles: the Kö in Düsseldorf, the Mö in Hamburg, the Ku'damm in Berlin. Our small and medium-sized cities are already complaining about the severe loss of vitality. Vibrant town centers are mutating into ghost towns. These cities have become donuts, and this has side effects. Throughout history, commercial centers have always been meeting places for their citizens. Now people have lost their most important third place. The place where they stay - besides home (first place) and workplace (second place) - and where they meet. We all miss this place, which used to be downtown. We miss the meetings and the street life. They are consuming together as a social event.
Now we prefer to order clothes at home, eat on the sofa and watch Netflix. Comfortable, but lonely. And that's what becomes a problem at some point.
"When people no longer meet, cohesion disappears. Locals keep to themselves, newcomers are strangers, old and young no longer get to know each other, and people talk about politics at home with friends with the same opinion. Understanding for others is lost when you only see the world from your point of view." (Sophie Burfeind)
In Canada, I felt I could look a little into the future. Somehow this described process is much more advanced there than in Germany, and I also see the chance that we can reinvent the lost third place.
