As I started to write this article the doorbell rang, and I was greeted by another delivery from Amazon. There is perhaps no more apt sign as to the future of the retail market than this little smiling box.
In 2021, 2.14bn people worldwide are expected to buy goods and services online, a 29.8% increase from 2016 global digital buyer figures. However, online sales as a proportion of all retailing fell 1.2% to 17.6% in February 2019 (from the 18.8% reported in January 2019*).
So, what does this mean for the UK’s retail market?
The retail experience
Retail shopping will be more about the “experience”, differentiating it from the online retailer’s market. This will not only be about the individual store but also use of shared areas where events and promotional activities are held.
However, will a tenant be willing to pay, via a service charge, for the cost of these events or will the tenants insist on a requirement for certainty of costs and service charge caps to prevent such initiatives? Alternatively, will landlords be willing to fund events and activities themselves to ensure long term business success? It is likely that landlords will start to consider service charges more carefully not just financially, but also as to what added-value services they should provide and which to re-charge to tenants.