Embracing Short-Term Retail: A forward-thinking approach for Commercial Property Managers

In the ever-evolving landscape of the retail industry, shopping centres and commercial property managers are finding themselves at a crucial turning point, presenting exciting opportunities for innovation. A space that was once filled with permanent or long-term tenants has undergone a transformation. Today, we can see a growing trend of shopping centres showcasing available retail units as brands and businesses adapt to the dynamic shift towards e-commerce trading and short-term leasing.

The catalyst for this evolution was undoubtedly the challenges posed by the pandemic in 2020, leading to a global lockdown that impacted physical retail sales significantly. While we are on the path to recovery, physical retail hasn't fully returned to pre-pandemic levels, resulting in reported surpluses of retail space worldwide.

While the immediate response for many property managers is to seek long-term replacements, there is an exciting (and increasingly fructiferous) alternative to consider. On one hand, longer-term tenants offer convenience with less paperwork, minimal tenant turnover, and reduced administrative demands. They bring stability by providing a steady income stream, supporting financial planning and overall centre management. Additionally, they attract a loyal customer base, as shoppers tend to frequent stores they know and trust.

Nevertheless, an exclusive focus on long-term tenants might not be a sustainable strategy. It's essential to recognize the evolving nature of the industry. Embracing short-term retail isn't just an option; it's a necessity for thriving in an increasingly competitive market. This shift presents an opportunity for property managers to explore innovative solutions and adapt to the changing needs of the retail landscape, fostering resilience and growth in the face of challenges.

Now more than ever, pop-ups are, quite literally. popping-up all over the place.

In recent years, short-term retail has contributed to a 50 billion dollar industry, and this is set to only continue growing. A recent survey by Storefront revealed that 80% of global retail companies who opened a pop-up store deemed it to be a success. 

The pandemic, again, was a huge accelerator in the rise in popularity for short-term retail. As well as accelerating the closure of many longer-term tenancies, the 2020 pandemic and lockdown had an equal but opposite effect on the short-term industry, being the catalyst for an explosion of small businesses setting up online stores and then experimenting with shorter-term pop-up space.

The benefits of embracing short term retail

Short-term tenants, such as pop-up stores, pop-ups, stands or kiosks, activations and promotions, can bring variety and novelty to the mall.These bookings bring in new brands, keeping the centre fresh and giving shoppers reasons to return. Many of these brands and businesses often have very engaged audiences, generating additional footfall and sales for the centres, as well as the opportunity to attract demographics that they may not usually attract with their longer term tenants.

Nhood: A future-focused perspective

Nhood, a prominent real estate figure in France with a growing presence across Europe, demonstrates a clear understanding of this changing world of retail, and the importance of moving with these changes. This isn't just about their own success; it's also about helping new brands and businesses thrive.

"For Nhood, one of the ambitions with its clients is to make the entrance to their centers as accessible as possible, through this type of flexible formats. Historically, shopping centers have been conceived as the setting for large national and international retail brands and which, to this day, continue to be their anchor and driving force, but, in a large area of these characteristics, there are countless locations, which, in many cases, may be underused.

These types of locations, such as temporarily closed premises, spaces in common areas, etc. They are great opportunities for emerging brands that do not have, in their initial phases, the financial lung to make such an investment, to enter these centers.

Our proposal as Nhood is to identify these opportunities and take advantage of these formats, to accompany these brands in their growth phases, as an incubator, providing a flexible space and accompanying them in their growth."

- Javier Matey - Specialty Leasing Manager at Nhood

Addressing the main pain point

So, if short-term bookings are such a positive addition to any centre, then why are we still seeing resistance? Simple: management doesn't want the extra hassle involved, and we understand that.

Enter: Fillit.

The Fillit platform is designed to address this very pain point, making the entire booking and management process quick, easy and hassle free. This generates additional income for the centre, new brands, new visitors, and most importantly, saves invaluable time. 

Embracing this new phase of retail is a non-negotiable for any commercial property who want to thrive in the upcoming years. The next step is ensuring you are equipped with the right tools to manage things efficiently.