Covid-19 will create global change. The virus is very scary but then so is change according to all the business management experts. So, what will you do – change forever or revert to type? After all, humans are creatures of habit, writes Justin Taylor, co-founder of P-Three.
At P-THREE, we think about everything from the point of view of people, the consumer. Whilst some consumers will not change, we anticipate the forced and encouraged changes in consumer behaviour brought about by Covid-19, particularly as we move deeper into the current crisis and people have more time to assess its impact, will create some lasting changes in consumer and business behaviour. P-THREE highlights the following three changes which had begun but are likely to accelerate, all of which will affect bricks and mortar retail.
First, there will be a greater connection and emphasis on local communities and localism. Many people will have time to re-evaluate the importance, and their contribution to, the community they live in as opposed to taking it for granted. This re-evaluation will be in terms of an appreciation and aspiration for the built environment, the strength and resilience of local businesses as well as the social values which are important. Beacons of strength are now the local independent convenience store and pharmacy, fresh fruit and vegetable home delivery business, village school looking after children whose parents are key workers and local community SOS groups watching out for the elderly and vulnerable. These types of things do not need to be temporary arrangements.
At P-THREE we call this ‘community ID’ – it’s a form of place purpose, but more about the nurturing and values of what matters in a place. Get this right and it will encourage investment in physical assets.
Secondly, evolution has demonstrated the flexibility of humans to adapt. Almost everything we are now doing, and the way we are doing it, has needed us to be more flexible. Working from home, online learning and exams for children, nearly 1 million exercising at home with Joe Wickes (or similar), and how we distribute and receive information and entertainment – such as BrewDog taking its bars online to offer a virtual socialising experience.
This flexible approach will need to extend more than ever before to the occupation of retail space as we come out of the pandemic phase. It is highly likely there will be significant amounts of new vacant retail and restaurant space in due course which will give rise for the need for a ‘flexispace’ retail model encompassing fast leasing, adaptable physical occupation and short/simplified legal contracts. This approach could become in many locations mainstream as opposed to simply pop up.
The third trend will be a shift towards multi-use hubs. In a post virus scenario, as mentioned above it is probable there will be an even greater amount of surplus retail, restaurant and shopping centre floorspace. One dimensional use retail assets such as shopping centres are likely to find the future challenging. At P-THREE we anticipate more shopping centres will become economically unviable and this will be the key. These buildings have potential to transition into new multi-use hubs. Through physical adaption, and a rebased retail and valuation model, these buildings could become the home to a swathe of uses looking for busy central downtown locations: work space, innovation hubs, medical facilities, incubators and accelerators, start- ups, makers, tech, design, media culture, culture, food and beverage hubs.
So, let’s not default to just doing what we have always done. Post Covid-19 the retail & leisure property market landscape will be very different. There is opportunity to reshape buildings into exciting centres to match changed business practice and lifestyles, fit for the future based around flexible/adaptable physical spaces and occupational contracts, which will help.
Contact P-THREE on firstname.lastname@example.org to discuss these trends in more detail