Modern retail is in a state of transformation, caused by the rapid development of e-commerce and a change in consumer behavior. Shopping centers, until recently the undisputed leaders of the retail trade, today are forced to rethink their role and look for new strategies to remain relevant.
Attendance dynamics
The dynamics of attendance remains multidirectional. Russians have become more practical and less likely to make spontaneous purchases, coming to the shopping center with a clear list of goals. So, only small and medium-sized district formats can boast of stable or growing traffic, corresponding to the concept of a “15-minute city” and solving the daily tasks of residents. The most noticeable decline in demand is observed in the clothing retail segment, which is the leader in both opening and closing outlets. This segment is experiencing the greatest pressure from online retail and marketplaces, whose share in retail, according to our estimates, may exceed 30% by 2030.
Influence factors
In addition to the expansion of e-commerce, the market is under pressure from changing consumer habits and macroeconomic conditions. A new model of behavior was formed, the emphasis shifted from spontaneous consumption to a savings model. On the business side, the restraining factors are high credit rates, constant growth in prices for construction materials and services, which leads to the freezing of large-scale projects and an increase in operating costs. In addition, many potential tenants are experiencing financial difficulties, that limits their ability to expand and open new points.
Leisure and emotion centres
Buyers’ expectations have transformed, and today they see the shopping center as a multifunctional leisure center and a space for getting lively emotions. Visitors appreciate the convenience of “here and now,” but at the same time they are looking for unique offers, high-quality service and the ability to solve several household and recreational tasks in one place. Successful shopping centers position themselves as platforms for emotions, where shopping is only one of the options along with entertainment, gastronomy, sports and wellness services.
Competition for buyers
The survival strategy is based on the multifunctionality of space, corresponding to a new lifestyle. Among the effective solutions there are the development of anchor categories that form constant return traffic, such as food halls and grocery stores, whose share has grown in 2024, wellness centers, spa complexes, e-sports arenas and beauty objects. Event marketing has become an integral part of the strategy – shopping centers regularly hold exhibitions, gastronomy festivals, master classes and sports competitions to create an additional reason for the visit. Fashion brands, following the trend, open cafes in their boutiques, creating a synergy between shopping and leisure.
Partnership with tenants
Given the financial pressure on tenants, management companies moved from the role of a landlord to the status of a full-fledged partner. An indicator of this is the rejection of rigid fixed rates in favor of flexible, combined rent models that include a fixed portion and a percentage of turnover. This allows tenants to reduce fixed costs. To minimize risks, short-term pop-up rentals and seasonal fairs are used, allowing to “test” new concepts with minimal investment. In addition, landlords are increasingly agreeing to fix rent on preferential terms, provide deferrals for payments and reduce rental space by 25-30% to preserve the tenant pool.
Architectural development
In addition, I note that architectural development follows the philosophy of creating a complex environment. The dominant trend is the design of multifunctional and hybrid complexes (MFC), where shopping galleries are combined with entertainment areas, offices, housing and public spaces, turning into a point of attraction. Another example are objects integrated into transport hubs (TPU). In interiors and layouts, the emphasis shifts towards comfort and visual space, atriums and “heavenly living rooms” – public spaces at height, serving for recreation and work.
Ecosystems are the future
We see the future of retail real estate not in competition with e-commerce, but in finding and strengthening our unique offline advantages that contribute to active communication. A successful shopping center today is not a place for shopping, but a multifunctional ecosystem, a comfortable urban environment that offers the visitor a comprehensive experience, emotions and services that cannot be obtained in the digital space. Strategic transformation towards hybrid formats, flexible partnerships with tenants and the creation of architectural value are becoming key factors for sustainable development in the new reality.
By Maxim Dolgov, founder of the DA Architectural Workshop