The market is saturated and needs more clearly focuses malls
Prague — If shopping centers are to succeed in the future, they must diversify the composition of their tenants and the range of products offered, while communicating this information to their customers, real estate investment firm CBRE stated, adding that this new trend coming to this segment from Western countries.
The boom of shopping centers in the Czech Republic is over. The current saturated market does not need new but rather more clearly-focused shopping centers. Shopping centers must understand which target group of customers they want to focus on and adapt the offer of the shops and services accordingly. Shopping centers usually have an identical or at least similar structure of tenants. The solution is distinguishing oneself from the competition and having a greater specialization or focus on the needs of a specific catchment area.
“In some cities we can already see that shopping centers have started to diversify. For example, they focus on the so-called ‘fashion customer’ looking for a wide selection in the area of fashion and design products, even at higher prices. Centrum Chodov is a good example of such a shopping centre. Another good example is Palladium, which clearly targets foreign clientele with high purchasing power, among others. Advanced markets, to which the Czech market also belongs, call for diversification, a clear differentiation and meeting the wishes of customers,” Veronika Tebichová, Head of Retail Agency at CBRE, said in a press release.
Shopping centers will have to diversify and find their own way to differentiate themselves from the competition through the composition of their occupiers and the range of products and services they offer to their customers, CBRE states..
Specialization will evolve in accordance with the needs of customers in the respective catchment area and target segment. Shopping centers cannot focus on all customers, not today or in the future. Therefore, CBRE said it expects a greater diversification of the structure of tenants in shopping centers in the future, a trend which is expected to last several years. By the end of the period, shopping centers should have a clearly defined position on the market (positioning) and appeal to customers in the target segment in which individual shopping centers decided to specialize.
Shopping centers must clearly define groups of target customers. It is no longer possible to focus on just one group these days, e.g. young families. The target group must be wider and partly overlap the segments of customers whose characteristics are similar within the framework of defined target groups. Diversification should be considered seriously in cities where there is tough competition among shopping centers, especially older shopping centers operating on the market which are under more severe pressures of competition.
CBRE Group is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). In the Czech Republic CBRE has nearly 350 employees. In the Czech Republic CBRE manages nearly 200 commercial premises with a total area nearly 1.2 million square meters.