Following up on the subject discussed in Business Review Magazines‘s most recent cover story, titled Retail 2.0: E-Commerce Goes Hand In Hand With Offline Shopping, and in anticipation to BR’s upcoming re:FOCUS on eCommerce, Retail & Logistics 2022, we sat down with Fulga Dinu, Country Manager Operations at Immofinanz Romania, to further explore the trends, challenges, and future developments of the Romanian retail sector.
How was 2021 for the Romanian retail sector and how was this reflected in sales?
As safety and health have become priorities of present times, also the retail sector has quickly adapted to these imperatives. In order to receive their customers safely, practically all shopping centres have implemented the health measures recommended by the authorities.
There is no doubt that the activity of the majority of our tenants has been affected by the sanitary crisis, but at the moment, the traffic is recovering in our VIVO! shopping centres. On the other hand, retail parks had an advantage because visitors could enter the shops directly from the outside, being able to operate sooner after the lock down period. The visitor frequency in our STOP SHOP park in Botoșani has quickly returned to the pre-crisis level. Our STOP SHOPs are a cost-efficient, high-yielding and crisis resilient retail format. An important factor in this centres is the concentration on low-cost convenience products, which are very popular with consumers in difficult economic times. This concept has proven successful during the Covid-19 pandemic. Discounters benefit from the increase of customers ‘price consciousness.
How did the consumer behavior change during this period? Was the consumer behavior at the beginning of the pandemic maintained?
As far as the end customers, the visitors of our shopping centers are concerned, there has been a change in the shopping behavior, which has become more targeted, with defined objectives, and the spur of the moment has no longer been a significant shopping factor, due to the sanitary restrictions, the change of the schedule, the time spent in the center being shorter. This has also been influenced by the entertainment areas that had a much longer closing period. Another trend has been the focus on affordable products, discount stores, specific in difficult economic times. At this point, however, things are returning to normal, to the pre-pandemic behavior, everyone is adapting to both the sanitary protection and prevention measures that they have already included in everyday life.
How difficult/easy is it to “keep” the customer at present in the store, against the background of the economic uncertainty caused by the coronavirus pandemic, but also of the internal evolution of economic and political instability?
The consumer’s needs and shopping habits have definitely been affected by COVID-19 and continues to fluctuate between the desire to get in and out of the shopping centers quickly, and the need to be social and interact with one another. Today’s shoppers are demanding a safe environment, but also a smoother, more convenient shopping experience. And, we have both in our VIVO! shopping centers where safety is a top priority, and we constantly adapt and improve our premised and our offers in order to provide the most creative and best shopping experiences.
For some time now, the customer journey has been evolving. It’s no longer simply about visiting a store. It now involves an overall brand experience through the omnichannel platform: having done their research online, customers arrive at the store already knowing exactly what they want (in many cases, knowing more about a product’s features and benefits than the sales associate). It is both the retailers‘ and our duty to provide the customers the unique experience that the online can’t offer.
How do you see the evolution of the retail sector in Romania in 2022, taking into account 2 scenarios: The continuation (intermittent waves) of the pandemic or its extinction at a certain time this year?
Retail is adapting rapidly and this has been noticed when the restrictions have relaxed. The digital transformation will evolve as fast as in the last two years, and online shopping will complement the offline one, but they will not eliminate each other because the experience that consumers are looking for, the factor of human interaction is more important now maybe than ever. As proof of this are the 93.8% occupancy rate that we have in VIVO! centers at group level, the constantly increasing footfall figures and the demands for commercial spaces from international brands.
In both scenarios, after two years of restrictions, people are craving for more social interaction. The shopping centers will need to build broader, more dynamic experiences that people can’t find elsewhere. Landlords and retailers need to collaborate creatively to drive footfall and boost dwell times to increase their revenue productivity.
There are also strategies based on creating mixed-use spaces that bring together residential, office, entertainment, leisure, health and wellness, and other novel experiences. This is about creating community living-room spaces in shopping centers for people to meet and socialize. Consumers will be drawn to new mixed-use projects with strong leisure and entertainment offerings that help them find the social interaction they crave, especially now.