Posted by: Stephen Daniels
Senior Researcher, Retail Research & Consulting
Jones Lang LaSalle EMEA Research
Landlords are going to have to adapt their car parks to keep in touch with technological advances, demographic change and the flight towards ‘green’ travel over the next decade. Capital investment to future-proof and maintain or enhance revenue streams will become crucial.
Our Retail 2020 report emphasises the importance of ‘Going Beyond Retail’ over the next ten years. This means offering better experience and better service. The car park experience at a shopping centre or retail park can play a role in achieving this and, as with much of the change set to happen in the retail industry, technology will play an important role.
The mobile phone is already at the heart of ‘Pay on Foot’ systems, but they will play an even bigger part in the future with the arrival of NFC (Near Field Communication)* payment methods. This technology is going from strength to strength and will become commonplace in retail over the next decade. For car parks this means any driver with an NFC enabled Smartphone could use their mobile as a parking ticket. The driver would register once with the car park online, get recognised on entry and then have their nominated bank account debited automatically on exit. And because the driver has to provide personal details during the initial sign up phase, the shopping centre obtains a wealth of information about the consumer and can provide targeted promotions, offers or other information.
The mobile phone comes into play again, via social networking sites and forums, through allowing real-time communication between the consumer and shopping centre. There is no reason why problems within the car park cannot be identified and dealt with by attendants within the duration of a shopping trip.
The continued growth of e-commerce means that shopping centres will need to offer another service in the future – collection and drop-off points for items purchased online. Shopping centres are, in general, well located and ideal hubs for this type of distribution. This could lead to car parks ‘giving up’ fee generating spaces in the interests of customer service and developing secure and practical collection points.
Furthermore, the UK population is getting older – by 2050 one in four of the population will be aged over 65. Today it is one in six. This will inevitably mean a greater demand for wider bays and disabled spaces. As already discussed, the current guidance on disabled parking is 4% of the total space available (6% for newly built car parks) and this will have to increase further again, which just like providing for e-commerce collection, will reduce the number of bays in a car park.
Landlords may also have to give up further space given the pace of development taking place in the Electronic Vehicle (EV) industry. But in this case it also opens up another potential revenue stream. Just like filling-up your petrol car, EV’s need – and will continue to need – regular battery charging. Drivers will need convenient places to do this for an hour or more and retail could play an important part in the infrastructure of charging stations – where better to wait than shopping centres or retail park? It’s a potentially lucrative footfall driver for the scheme (particularly restaurants) and the PR possibilities are also great – sustainability is still a buzz word.
Across Europe, around 15 countries – including the UK – currently offer incentives to encourage consumers to consider EV’s. In Denmark for instance registration tax is exempt. In Germany there are plans to introduce 1 million EVs’ to the road by 2020 – roughly 1 for every 45 petrol vehicles. In Austria the number will be 400,000 within ten years. So big things are happening and although the initial cost to install a charging station will put off many, investment now should position shopping centres and retailers to take advantage in the future.
This is of course the key issue – many of the future proofing changes discussed will require initial capital investment. Furthermore, key measures to improve experience will likely impact direct car park revenue. But they will result in a significant improvement to customer service, which is a large part of what the future is all about in retail and, at a basic level, the entire purpose of a car park to begin with. By enhancing the experience of the customer, it goes some way to future-proofing the rental levels retailers are prepared to pay at the scheme.
*NFC (near field communication) technology allows for data exchange at very short distances – for example by approaching a credit card to a reader. Today’s transport systems use NFC e.g. London’s Oyster card and Hong Kong’s Octopus card. In Europe in the future, contactless technologies will allow mobile phones to become wallets.