UNO July 2020

A commercial oasis

On 29 May, many Spanish consumers were wondering whether or not they should venture back into a shopping mall. Their regional governments were entering phase two of the Spanish de-escalation plan after more than 80 days in a State of Emergency and visiting a shopping mall had once again become an option for many people. It’s more than likely that most of them will never know but, in those two and a half months, an entire sector had reinvented itself – again – and innovated in every way down to the last square meter of floor space. Extraordinary efforts were made to guarantee their safety and ensure customer peace of mind and total satisfaction.

Shopping malls came to Spain during the democratic transition in the early 1980s. Since then, they have adapted to every one of the numerous social changes that have defined Spain as a country over the years. Those changes have included a national process of opening up to the world, modernization, a family entertainment boom, growing interest in gastronomy, the arrival of major international brands, digitalization and omnichannelity, to mention but a few.

Shopping malls have successfully adapted and even anticipated every one of these social milestones, taking them on board and making them their own. There are currently more than 560 malls in Spain offering over 16 million square meters of leasable floor space to over 36,000 retailers. Every year, close on two billion people pass through their doors and they provide direct or indirect jobs to over 740,000 professionals. They account for 0.7% of national GDP and represent a market share of 18.1%.

They account for 0.7% of national GDP and represent a market share of 18.1%

If they already played an important role in trade, leisure and family entertainment, from now on shopping malls will most certainly also play an important role in human traffic safety, innovation and the necessary loyalty-building process between major brands and their customers. In short, they will still be a huge part of the Spanish way of life. Evolution in the world of commerce has been a constant for many years, and things will be no different now.

A shopping mall represents an enclosed space that is entirely self-managed; a bazaar or shared space where managing influx and safety within the entire complex can be even more efficient.

We constantly have up-to-date information in real time. We know how many people come in, how many leave and our total occupancy at any given time. Furthermore, we communicate this data in real time on our screens, on social media and on the websites of our shopping malls; full transparency. Customers can easily access information about how busy their shopping mall is, which enables them to plan their visit and know how many people they will find there, both within the mall itself and the car park.

At the same time, a large number of our leaseholders are large- and medium-sized enterprises sufficiently capable of developing their own business plans and adapting them to the new situations that will arise as we consolidate our new normal. They will do business in safe environments and will be in a condition to guarantee a level of compliance with health and hygiene measures above and beyond the standard protocols put in place for employees, suppliers and end customers. This will allow them to rebuild their offer almost immediately, boosted by the attractiveness of our dominant, comprehensive and accessible shopping mall model.

For some time now, it has been clear that online and offline sales channels are not only compatible but that collaboration between them has become indispensable. Together they are far more than the sum of their parts. Top retailers have a strong online presence, but they rely on iconic offline spaces to build customer loyalty. On the other hand, e-tailers are opening stores worldwide and shopping malls have consolidated their position as the main focal point and crossroads between the two worlds.

The click & collect format has shown itself to be a powerful business tool. It is an efficient solution that simplifies the logistical needs of businesses, reduces distance between the offline and online environments and encourages experiential attraction and loyalty through visits to a physical store, where what the brand represents is also on display.

Constant adaptation by the customer and a focus on their purchasing experience is another decisive factor. It is a question of understanding what they like, what annoys them and what matters to them, constantly tracking these factors by continuously collecting data and experiences.

Furthermore, partnerships between mall managers and their stores will increase substantially in the new normal. The goal will be to adjust the commercial mix at each mall, making it stand out and attractive, capable of responding to each new demand from customers and visualizing the future for whatever those same customers bring into fashion. Shopping malls will be an oasis of safety, but they will also be genuine laboratories in which to test demand and the commercial offer in each season.

At Lar España, we have been persuaded that the shopping mall and retail park sector is ready to adapt to this new scenario. Those that are in touch with their customers, technically sophisticated, connected with their community, with sustainable and safe environments focused on customer satisfaction will no doubt have a part to play in the new winning formula. Moreover, it is clear that their role will be fundamental in normalizing social life and the recovery of our economy over the coming months.

The exceptional situation we have witnessed during the state of emergency will rapidly accelerate the important changes that were already under way in the sector anyway, as well as the transformation we were seeing and that we had already prepared for. So, those customers who decided to venture back into a mall on 29 May and those others that will do the same over the coming days will feel safe and return to their old habits. If shopping malls had been stand-out meeting points for family and social life until now, they will also be exuberant oases in the future.


Miguel Pereda
CEO and shareholder of Grupo Lar and Director of the socimi Lar España
CEO and shareholder of Grupo Lar and Director of the socimi Lar España, he was previously Managing Director of Grupo Lar Grosvenor. He has more than 25 years’ experience in the real estate sector. He was made an Eminent Fellow of the Royal Institution of Chartered Surveyors (RICS) in London in 2015. At present, he is also Chairman of Villamagna, a company in the Grosvenor group, and the Altamira Lar Foundation. He holds a Degree in Economics and Business Studies from the Complutense University of Madrid, an MBA from the IE Business School, completed the Breakthrough Program for Senior Executives at the IMD Business School, a Master’s Degree in Tax Advice from ICADE and completed the Real Estate Management Program at Harvard University.

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