Europe has entered a period of rapid transformation. Political forces like upcoming elections, Brexit and the refugee crisis are poised to have a significant impact on demographic and economic trends. With all of the changes occurring across the continent, it may seem frivolous to talk about retail and the future of shopping. But we say: on the contrary. Retail is the heart of the high street. It’s a centre of community life. And it could be just the economic engine to help drive the Europe of tomorrow.

CallisonRTKL has combined decades of retail know-how with a vast portfolio of live projects to forecast the next decade of retail in Europe. Building on a report commissioned by Klépierre, the Shopping Centre Forecast showcases what shoppers, developers and retail brands can expect from the next generation of shopping experiences across the continent.

The New Retail Market
and the Future of Shopping

Driven in large part by the ever-evolving face of online retailing, consumers worldwide have changed their shopping habits and priorities. In Europe, demographic trends and shopper preferences vary across countries, but a common thread exists: The youngest generation of shoppers do not behave the way their grandparents, parents or even older siblings did. Because of the sheer pace of these changing consumer preferences, only the most agile and responsive retailers and developers will survive.

Already we’re seeing successful retail formats around Europe evolve in response to changing habits. Today, the most prosperous centres tend to be either large, dominant properties that provide full-scale shopping destinations, or smaller, food-anchored centres that offer lifestyle and leisure with a dose of shopping. In Western Europe, destination centres are being created through refurbishment and extension, which allows developers to maximise the assets they already have. In Central and Eastern Europe, refurbishments and extensions are only 12% of the new space added, with more ground-up centres slated to be built through 2017. In both cases, smart developers are future-proofing their investments by ensuring the new or newly positioned centres reflect the needs and desires of today’s shoppers.

When it comes to spending their money, today’s European consumers tend to favour experiences like travel and dining over purchasing items. Fortunately, many are increasingly seeing shopping as an experience and are responding in turn. According to a recent Euromonitor survey, 50% of people in Europe said going shopping is how they would prefer to spend a day off, which was the highest percentage among the activities listed. Madrid and Barcelona are the two cities with the highest expected retail growth, while economists project slower retail growth for German and French cities.

While online shopping is on the rise, the physical retail environment is still an important channel for shoppers, but the way in which it’s important varies by shoppers’ age. Consumers 18-34 shop more and spend more time browsing across a variety of channels than any other age group. Shoppers 35-54 years old spend more money on the whole, but are more price-conscious and have less time to shop. People over 55 have more time than their younger counterparts, but value convenience, quality and service over product range. Across the board, online shopping is having a profound influence on the physical shopping environment, but it still represents only 10% of retail sales. To appeal to today’s time-starved (or at least time-sensitive) shoppers, transactions must be as convenient and easy as possible and seamless across the digital and physical realms.