Hybrid ‘Precinct Mode’ to Bolster Opportunities for Big Box Retail

 

‘Big box’ retailers are responding to changing economic conditions, savvy online operators and shifting consumer preferences, renewing physical store models in a bold bid to stay front of mind with customers. As consumers become increasingly comfortable purchasing larger and more expensive goods online, industry players have recognised the opportunity to move traditional Large Format Retail centres towards a hybrid retail and service precinct model, which also combats the risks of high operating costs and modest sales growth.

Chief Executive Officer at Queensland-based Geon Property, Ben Griffin, said co-locating with other retail and service-based formats enables big box brands to grasp the opportunities that mixed-use precincts offer; the ability to stay relevant with more regular visitors and to capitalise on both planned and unplanned purchase behaviour.

“Historically Large Format Retail has been isolated from other retail and services in the traditional ‘homemaker centre’,” Mr Griffin said. “Hybrid precincts allow customers to ‘tick off multiple tasks’ in one visit – do the grocery shopping, go to the gym, have a meal, pick up some things for the home and even partake in leisure activities.

“For a long time big box retailers have been able to rely on a combination of location fundamentals and traditional advertising to attract customers, but the sector must now work harder to stay relevant and competitive.

“Integral to this strategy is providing retail and service offerings that attract a “regular” customer, so that people are visiting a centre multiple times a week instead of only once a month.”

Geon Property is planning to integrate a new active lifestyle and entertainment precinct, The CO:UP, into its Townsville based, Fairfield Homemaker Centre in an effort to capitalise on tenant diversification and the booming health and wellness industry.

Mr Griffin said forward thinking centre owners and managers are coupling Large Format Retail with other attention-grabbing retail and service offerings in a bid to influence customer behaviour, reshape how consumers look at large format stores and get people browsing as part of their normal routine.

Geon Property attended the Large Format Retail Association study tour to Japan and noted an interesting response to challenging retail conditions by adventure and camping goods manufacturer Snow Peak, which took consumer engagement to the next level.

“Snow Peak recently integrated a ‘campground style’ café into their showroom, where food is prepared and served using Snow Peak products,” Mr Griffin said.

“Allowing customers to have a genuine ‘Snow Peak experience’ is integral to their tactic of compelling consumers to linger longer and visit more often – which is so necessary for retail to thrive in the modern era.

“Here in Australia we’re already seeing Petbarn offer dog grooming services while you browse in store, furniture retailers opening in-store cafes, hardware stores running DIY workshops and sporting goods retailers encouraging consumers to try out new gear on sports courts before buying it. Who knows, maybe soon your white goods retailer will be doing your laundry?”