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What retailers need to do to prosper in the new world order

By now you would have heard the news that Australian company Scentre Group, who manage Westfield’s retail operations in New Zealand, are investing $790M in a Newmarket rebuild.  The new and improved mall, which will be housed over two sites at 309 and 277 Broadway, will see well over 230 businesses open for trade in 2019. For many of the brands in the new development, this will be their first foray into the New Zealand retail market, and Westfield is also bringing the iconic department store David Jones as an anchor tenant.

Newmarket has long-held the mantle of New Zealand’s premier fashion destination or “the fashion capital” as described by David Thomas CEO of David Jones. However, over recent years, the precinct has faced increasing competition. In particular Britomart, more recently Ponsonby, and even Sylvia Park, have bolstered their fashion offering to lure in more consumers, and it’s paying off. Like a battleship, Newmarket has endured a few shots but has remained on course, and many of the fashion businesses who have multiple store locations still “do the numbers in Newmarket”, and often say “Newmarket is the engine room of our business.”

A fast-developing town centre, Newmarket has always been a major trading post, and continues to showcase highly developed infrastructure including motorways / carparks, and Auckland’s second busiest train station. The residential population is rapidly rising, along with an ever-increasing number of employees – currently circa 20k. As a suburb, it is nestled on the edge of the city fringe and is the gateway to the affluent eastern suburbs, where the typical Newmarket consumer resides. Geographically we’re in a sweet spot.

Retail is, and has always been, a fiercely competitive sector and the pressures on retail have never been greater than they are right now. There has been an explosion of online stores, multi-nationals gobbling up smaller brands and taking market-dominant positions, and of course we have global technology companies disrupting the traditional notion of what retail can be – hello Amazon.

According to a study in 2013 by property experts JLL, New Zealand’s retail mall saturation is around 0.4m2 per person versus Australia’s at 0.7m2 per person (The USA’s ratio is three times higher). Auckland’s population has experienced a surge in recent times and our attractiveness as a place to live is only going to increase. Essentially, we have a growing population which means more and more customers, coupled with unavoidable expansion.

The influx of 230+ new stores in Newmarket means life may become more challenging for some retailers. Understandably, the prospect of change and market expansion is daunting for any small business, however, if you’re turning on every tap to market, it doesn’t have to be. But the days of solely relying on throwing open the doors in the morning and waiting for customers to walk in are numbered.

For most consumers, the first interaction with a brand is now digital. Online retail is undoubtedly having an impact, but many of our smart bricks-and-mortar retailers have identified this and have made sure that their online presence is slick, easy to use, visually attractive and allows for easy and convenient delivery of products. These same smart retailers also ensure that their social media is engaging and resonates well with their customer base.

Digital is undoubtedly a key channel for successful retail, but let’s not forget that people still enjoy looking at products in store, and the social aspect of shopping. Enhancing your physical offering must not be underestimated; giving customers an incentive to enter your shop, whether it be loyalty programmes, activations, collaborations or just the overall in-store experience. Consumer-facing assets, digital and physical, should represent your business authentically and deliver on what your brand stands for. Retail in 2018 and beyond means “hustling”, it means engaging with consumers consistently online, instore and in print, it means understanding what your consumer likes and perhaps collaborating with other like-minded brands.

With retail trends continuously evolving, individual retailers have to as well. 

Mark Knoff-Thomas is the CEO of Newmarket Business Association.
This story first appeared at The Register.
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