CANNES, France –

Wubbzy bounces back Mixed Use, Entertainment Brick-and-mortar is back as retail looks to reconnect with consumers after two years of on-and-off closures and restrictions.

That was considered one of the important thing takeaways from the MAPIC retail real estate conference, which returned to a full program for this yr’s edition.

While pre-pandemic “normal” doesn’t look to return any time soon within the face of ongoing global economic and political challenges, retailers and shopping mall developers alike are responding to recent consumer patterns and the increasingly competitive landscape with recent amenities, entertainment and embracing omnichannel integration.

The conference opened under the theme of “People, Planet and Profit” and attendees tried to supply up a positive vision of retail’s future with a deal with sustainability — not only the catchall buzzword that encompasses all things environmentally friendly but keeping retail shopping centers vibrant and viable in the long run.

Two floors of the Palais des Festivals were full once more, with significant space dedicated to leisure and food and beverage concepts. Organizers cited 5,000 participants from 75 countries, down from a 2019 high of 8,500, but demonstrating the resilience of the sector. The tally included 1,600 exhibitors, and types were back as well, though this yr many were invited guests or paid steeply discounted rates in a move by recent organizers RX France to make sure attendance.

The Middle East and Asia demonstrated their growing retail ambitions with among the largest stands on site. Saudi Arabia’s Diriyah Square had the most important announcement of the week: It should be partnering with Time Out Marketplace for a 1,650-seat dining, event, exhibition and performance space slated to open at its luxury village in 2025.

On the bottom, participants were energetic and upbeat in regards to the way forward for retail centers at the same time as consumers change the best way they shop. Developers doubled down on expanding as entertainment destinations and accelerating growth of recent activity concepts that were in play pre-pandemic, while on the lookout for recent ways to catch busy consumers’ attention.

“A whole bunch of malls around the globe are struggling for identity,” said Thomas Cartledge, chief executive officer of consulting firm Benoy. “We’ve exhausted [food and beverage], we’ve exhausted leisure. What’s next? Is it art, is it culture?”

On the American Dream mall in East Rutherford, Latest Jersey, which already features a DreamWorks water park, Legoland and Nickelodeon Universe Theme Park, the subsequent evolution of entertainment includes constructing a large esports arena.

The brand new space will probably be greater than 40,000 square feet over 2.5 floors, to host monthly events with as much as 2,000 audience members. The space will tap into not only esports stars but musicians and skilled athletes as well that monetize gameplay through Twitch and other streaming services. The space also will include a social media lounge where influencers can broadcast live and create content.

It follows American Dream’s partnership with Mr. Beast, whose appearance there in September saw 1000’s of fans line up and even camp overnight to see the YouTube star. The activations are all a part of American Dream’s efforts to spice up footfall on the project, which has struggled to lure shoppers within the wake of the pandemic and has missed several debt payments.

Via Outlets, within the midst of a 17.5 million euro expansion of its center in Sevilla, Spain, created a “Pink-Tok” room as a dedicated space for guests to take photos and film content for social media and have added art installations to its properties in Lisbon, Portugal, and its center near Davos, Switzerland. “It’s a ‘wow factor,’ adding something that a guest won’t expect,” said chief executive officer Otto Ambagtsheer. “It’s a part of the placemaking, to create something that folks will remember.”

Other developers cited adding in social services, including city libraries or medical centers. “It’s the amenities that a town center would have, a retail center can incorporate to turn out to be a more long-term, sustainable place,” said Cartledge. “Some which might be loss-leading, the owner may take the view that it’s actually worthwhile putting that in there and losing money to generate footfall.”

“Shopping places have gotten just like the Roman Forum,” said Peter Wilhelm, chair of the European Council of Shopping Places. “We’re going back to the origin of retail, when people were going to the market not only to buy but in addition since it’s a spot where you meet people.” He noted that many malls transformed into vaccination centers throughout the pandemic, cementing their key role as community centers.

Latest amenities are key to upping footfall post-pandemic, and it has been elusive to date. A study from European commerce federation Procos-Eurelia showed that despite a slight upswing from 2021, traffic stays down about 10 percent from 2019 numbers across the continent, with Germany, France and the Nordic countries particularly hard hit, down greater than 20 percent.

Despite the decline, several landlords said that internal numbers show individual spend is higher, helping put the continuing online vs. brick-and-mortar debate to rest. While online sales remain higher than 2019, they’re contracting, based on Procos. Brands, particularly luxury and premium labels, have realized that the prices of online sales — with shipping, logistics and returns — are cutting into their margins.

“Now we have seen the turning point,” said Patrick Delcol, head of European Retail at BNP Paribas Real Estate. “Now we have the pure digital channels online mainly declining. It’s not one against the opposite — it doesn’t matter to the shoppers. It’s a indisputable fact that physical stores are of key importance to support the digital channels.”

He added that increasing rates of interest and the top of free-flowing money puts the pressure on online retailers to point out earnings and never just grabbing market share.

Digital-native, direct-to-consumer brands, particularly in the sweetness space, wish to open or experiment with physical brick-and-mortar stores. Online returns are also benefiting outlet shopping centers, that are taking over the surplus inventory, and expansion of those spaces is coming as inflation hits households and consumers turn out to be more cost-conscious.

“This yr has been considered one of our highest transactional years when it comes to recent leases, and we’ve been upsizing brands which might be performing thoroughly,” said MacArthur Glen managing director of leasing Nick Brady, which works with brands including Armani, Gucci, Karl Lagerfeld and Nike. “We talk so much about making the large larger. Now we have done so much with our luxury brands. They’re seeking to bring newer concepts to their retail channels, each physical and digital.”

As luxury and discount expand, many executives are predicting a wave of consolidation for mid-tier centers within the U.S. and Europe. The U.K. is especially ripe for acquisitions, as properties have lost as much as 70 percent of their value as investors reprice assets.

Still, there’s a reticence available in the market to throw money at mid-size centers, said BNP Paribas’ Delcol. “Many investors are waiting to see a bit more clarity and waiting for the rates of interest to stabilize before eventually coming back to the market,” he said.

With more cost-conscious consumers and the expectation that the world is heading toward a recession, shopping could possibly be set to plunge. That could lead on to a drive for consolidation of the shopping mall market, with a number of of the large players snapping up smaller, older centers with an eye fixed on redevelopment.

“I feel you will notice more Asian market activity coming into the European market and buying up a few of these malls, because they’ll take the view that they’ll bring among the Asian retailers with them and which may bring life back into them we haven’t seen for some time,” said Benoy’s Cartledge.

The outward optimism of the market glossed over a cautious undercurrent as developers assess a mix of geopolitical headwinds and economics, and the energy crisis in Europe was a hot point of dialogue. One landlord said their energy bills had risen 600 percent within the last yr, causing it to place any capital investment and expansion plans on hold.

Via Outlets’ Ambagtsheer said they’re developing solar projects in Spain, Portugal and Norway to create their very own energy supply, which may then be offered to tenants as a technique to cut costs.

The necessity to rein within the energy costs is resulting in jumps in sustainable planning, with the word on everyone’s lips, from developers — who’re feeling pressure from all fronts — to brands.

“We’re definitely taking a look at sustainability as a key issue [in financing],” said Rioja Estates managing director Giles Membrey. “[Investor funds] are coming to you saying, ‘We won’t even have a look at anything unless it meets our specific criteria when it comes to sustainability and ESG checks.’” Value engineering the upscale feel of spaces in order to work with premium and luxury brands is a balancing act.

“We see that there’s an increasing number of regulation coming in with ESG standards, and that we’d like to implement them. But brands are also requesting a variety of information from us and specifics about what we’re doing when it comes to saving energy and what materials we’re using,” said Promenaden Management chief executive officer Annette Lund, which works with Balenciaga and Valentino and can open a Dior door this summer. “It’s type of coming from each side.”

“Brands won’t need to be related to a development which doesn’t have a powerful sustainability agenda. There’s a risk that certain brands won’t occupy space in case your corporate strategy will not be delivering against targets which might be consistent with their corporate strategy,” said Alex Avery, CEO of business strategy firm Pragma.

From a brand perspective, sustainability is essential to draw consumers as consumption patterns change. “The pandemic, the environmental crisis, and now the economical prices have accelerated the demand for change to a more responsible way of consumption. There may be clearly a requirement coming from our customers,” said Adidas vice chairman retail expansion Alexandra von der Grün.

While one brand representative said there have been “some hard conversations available,” von der Grün remained positive. “Now we have reached out to all of our big landlords and I can inform you, the doors are open in all places. But I feel each side for the time being are within the establishing [standards] phase. That may speed up in the subsequent yr, but there’s a variety of speed on each side.”

Ingka Centres, which operates 49 centers mainly in Europe, China and India, launched a 700-square-foot circular fashion concept space in Sweden in June, which it hopes to roll out to other locations soon.

“Customers are saying they need to have a more sustainable way of life, but sometimes they don’t know do it,” said Vasco Santos, global sales and leasing director, Ingka Centres. “So that they want firms to encourage them and we now have a job to paved the way.”