Challenges for the Retail Strip

As well as our long-standing involvement with the shopping centre industry, Directional Insights also has expertise in researching shopper behaviour at traditional retail strips.

This strip retailing model has been under threat for some time, although it survives, and in some places thrives.

Anecdotally many consumers recall nostalgic memories of their local strip shopping precincts, where as children they’d be sent on errands, or hung out at the local milk bar. Older consumers claim a preference for the ‘local’ feel and customer service they find. But they don’t vote with their feet.

Where strip retail is in trouble, it’s because shopping centres have catered more effectively and efficiently to consumer needs.

Examining the weaknesses of strip retail tells us a lot about the strengths of shopping centres. Let’s look at six key points of difference: <

1) Anchors: Shopping centres have always vigorously pursued the best retailers. In the early days department stores and supermarkets formed the rocks around which specialty retail was distributed. Discount department stores were included when they emerged as the 1970s most dynamic, and freshest, retail form. Multiplex cinemas and category killers followed later. Services, too, are now central to the shopping centre offer. Without significant traffic generators, retail strips will always struggle for volume.

2) Air-conditioning: Internal, climate controlled environments are cool in summer, warm in winter and sheltered from rain. It makes for easy, pleasant shopping that can’t be easily replicated in outdoor environments.

3) Parking: In an attempt to combat the power of shopping centres, many municipal councils, following an international planning trend, tried introducing pedestrianisation schemes in the 1980s and 1990s. Traffic was barred from main streets which were paved over and landscaped.

Why did these fail? We’re a car driving nation. Pedestrianisation schemes not only removed traffic and parking from the street, they failed to provide any parking nearby.

One of the reasons shopping centres succeeded was because their owners were the only ones building adequate parking stations.

4) Security: Pedestrianisation schemes also suffered from a lack of security. Pleasing environments by day can become, or seem isolated and dangerous after dark. A deserted pedestrian mall with poor lines of visibility and absence of car traffic simply does not feel as safe as a well lit, internalised shopping centre with its own security guards.

5) Amenities: Clean, safe, accessible public toilets and baby change rooms. Need we say more?

6) Management: Shopping centres are run by a centralised management team representing a unified ownership team. They are trained and experienced in the field. With strip retail there are multiple landlords, no cohesive promotional or marketing strategy, no control over tenant mix or leasing strategies, and little joint control over the appearance and presentation of the precinct or of individual retailers.

Retail strips, then, face considerable challenges in a competitive retail environment. None-the-less they can have positive points of difference – we’ll cover these in our next issue of e-directions.