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Comment: The retail space race is entering a new era according to Adam Rawls

As online retail grows and grows, retailers need less physical space. The race for grade A retail stores is therefore hotly contested. 

The other race is for correctly located distribution and collection points for online purchases. Retailers now only need around 200 stores plus online to get national coverage and, as most retailers will tell you, online sales go-up around a new store opening.

So these stores have to be the right size in the right location. Retailers are asking landlords what the long term compelling vision for their mall, high street or retail park is and why they should invest?  Retailers not only want to be sold the vision, they want a big say in shaping it.  

This is now forcing landlords to revaluate the whole customer journey proposition. Shopping centres have to add points of difference including new forms of dining and entertainment, free wi-fi, events, happenings and publishing of yearly calendars that drive footfall, extend the shopping hours and shopper dwell times. Shopping centres are rapidly becoming entertainment and leisure zones and each has to stand out from its competitors or risk becoming a no go zone. Some high streets already have.

Landlords want the likes of Amazon to put their lockers in shopping centres to increase footfall, but do the pure-play on-line operators really want to be there and risk giving potential sales away to physical stores?   

Shoppers can already order selected goods from eBay and pick them up from an Argos store. The "click-and-collect" scheme is being piloted by the e-commerce giant in about 150 shops belonging to the high street chain. The firm already runs the eBay Now service in New York and San Francisco, This allows shoppers to have goods delivered from the likes of Urban Outfitters, Toys-RUs, The Home Depot and other local stores within about 60 minutes of completing their order (for a small fee of course).   

The recent London Underground strikes over staff losing their cosy ticket offices could be argued as a smart move by TFL to release extremely valuable, highly connected, highly visible distribution and collection space at key points in a customer’s daily journey.  

What will constitute the new retail space of the future only time will tell. The one certainty is that the race for physical space is on, but only if it fits with the new customer journey profile that the landlord and retailer set out.  In the end it is all about the experience at delivery, be that in-store or online and for that location is still everything.

Managing space wherever it is has never been so competitive.