By Valli Morphett & Jennifer Cook
Valli Morphett speaking at an event
Valli Morphett, CEO and Jennifer Cook, Director NSW & QLD, respond to the question: how can you de-risk investment through customer research?
"Too often we are willing to invest $500 million on a new building, but not 0.001% of that sum on research to be sure we are building the RIGHT product."
We were thrilled to keynote the recent Resilient Melbourne forum on ‘unlocking potential in retail precincts,’ hosted by our colleagues from CBRE, and share insights into our customer-centric approach.
We were overwhelmed by the positive response to our presentation and hence have distilled our keynote into a blog to keep the conversation going.
Four lessons to de-risk investment and unlock retail potential
#1 Stop planning for now. Adapt or be left behind.
You need to stop designing for yourselves. You need to start listening to the customer of the future, work harder to understand their needs, or you *will* be left behind.
Valli Morphett, CEO Village Well
Our world is transforming rapidly and customer preferences are evolving sharply. It is critical to not just keep your finger on the pulse of the currently customer, but invest time and energy to understand the customer of the future, their needs, desires and aspirations. The world of retail is a race. Don’t be left behind.
#2 Understand evolving lifestyle and liveability preferences through big data
Covid disrupted more than our work lives, it also catalysed a significant shift in community values. Place measurement consultants Place Score conduct a bi-annual Liveability Census, which provides a valuable academic quality data set on Australian lifestyle and liveability preferences (N= 30,000, 95% confidence rate).
The 2021 Census gave us an insight into how the pandemic changed community values across the nation. People value:
Spending time in open space and nature - increase 14%
Walking/jogging/cycling/alternative transport connections to local shops - increase 9%
Ease of driving and car parking - decrease 7%
But it is the 15-25 age cohort, Gen Z, that will be coming of age. Compared to the Baby Boomers, the under 25’s tend to prioritise:
Individual (not collective) personal safety
Protection of the natural environment
Sustainability behaviours in the community
Connection to local employment
Things to do in the evening
When presenting this information to the room at the Resilient Melbourne forum, many of the younger audience members’ response was visceral. Faces immediately lit up, with smiles and enthusiastic nodding. They clearly felt heard. So how can our retail precincts themselves catalyse the same reaction?
#3 Start writing a love letter to future generations
The Millennials are already taking over as the dominant retail customer cohort, but it is younger Millennials, Gen Z and Gen Alpha that we need to keep front of mind in when considering longer term asset planning, investment, development and retail mix strategies:
They want to live, shop and work locally
They value precinct and neighbourhood experience over single buildings
They take environmental sustainability seriously and will pay for it
They like minimalism, value experience and don’t differentiate between online and physical retail
Image courtesy of AMP Capital
Quay Quarter Sydney’s laneways precinct is integral to the precinct’s success as a high performing workplace, providing a neighbourhood experiences that support office tenants to attract Millennial and Gen Z talent into the workplace.
Understanding the key motivations for travel and the final destination provides an opportunity for the station to become a part of that experience. Atocha station in Madrid is where tourists and locals alight to visit the capital’s Royal Botanic Gardens. The station features its own tropical garden which has become an extension of the place experience, and a source of local pride.
The emerging customer generations expect compelling retail destinations to have a longer bodyclock; things to do and reasons to visit every day of the week, morning through night. This is a great opportunity for owners and developers under pressure to increase asset productivity - why would you NOT grasp this with both hands?
Jennifer Cook, Director NDW & QLD, Village Well
Image courtesy of AMP Capital
Smidmore Street at Sydney’s Marrickville Metro responds to locals’ “deep green” values and desire to make more sustainable shopping choices.
#4 Go deep to really understand the customer
Community values are influenced by the environment they live within. Hence, it takes more than big data to unpack hyper-local community and customer needs. By balancing quantitative data with place observations on the ground and deep qualitative customer engagement, we uncover not only what they do, but why they do it.
Too often we think simply asking customers what they want is enough. But truly innovative experiences and big leaps forward rarely happen that way. Did you ask for an iPhone back in 2007? Support the lifestyle and values of your customers and you’ll create real place attachment and loyalty.
Image courtesy of AMP Capital
The recently completed Karrinyup in Perth’s north strengthens relationships with existing loyal customers by delivering on lifestyle preferences for coastal living and upscale dining. This insight gave developer AMP Capital the opportunity to replace an ageing food court with restaurants that now attract the attention of top dining reviewers.
So what are you doing to keep your finger on the pulse of your future customer?
Valli Morphett, CEO Village Well
Village Well public speaking offer
If you are looking for a keynote speaker that is inspiring, insightful and motivational then get in touch. Our Village Well exec team are all highly sought after speakers with unique urban strategy specialisations:
Valli Morphett, CEO. Inspiring and dynamic speaker on systemic place outcomes through solution focused, evidence based, practice. Melbourne based.
Jennifer Cook, Director NSW & QLD. Insightful speaker on customer-centric research and strategies for thriving retail and mixed use development. Sydney based.
Gilbert Rochecouste, Founder & Creative Director. Motivational speaker on New Local, regenerative mainstreets and activity centres. Melbourne based.
Get in touch if you need support.
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