Back to the Centre – Promenading beats consuming (2010)

The town centres have become attractive again. This is the conclusion one might draw if the headlines of many newspapers and technical magazines on urban development are correct. There is the mention of “Renaissance” and a “new delight” in the illustrative descriptions of the return of urbanity.

There are, in fact, various indications confirming a trend back to the town and city centres. Almost all large shopping centres opened in recent months are situated in the immediate vicinity of the best city locations rather than greenfield locations or the outskirts. The Loop5-Center in Weiterstadt, situated directly by the A5 motorway, is one of the rare exceptions and has yet to prove itself in the competition with the neighbouring city of Darmstadt. Inner city areas have also become attractive again as residential locations, particularly when the financially strong clientele of the Generation 50 plus finds premium-equipped living space. The posh penthouse with roof terrace and a view down to the throbbing city life is more sought-after than the cottage with a garden at the edge of town.

The frequentation in traditional 1A locations benefits from this, and is gradually detaching itself from the opening hours of retail. Before going to work, you have a quick breakfast at the bistro table of the city bakery. And even after closing time, if the weather is fine, you want to sit outside somewhere downtown before going home. The market place becomes the meeting point – for some people even a stage – to catch up on social contacts often neglected due to numerous hours spent in front of the computer. Here you compensate for all the emotions, warmth, geniality and fellowship the virtual worlds fail to offer. Yet, despite people spending more time in Germany’s inner cities, the turnover does not increase equally, because of opposite trends slowing down their propensity to consume, to say the least.

Apart form the Internet as a distribution channel, the rising energy costs, growing healthcare costs and the uncertainties with respect to the jobs and old-age insurance have contributed to the fact that the theoretically available purchasing power does not automatically benefit local commerce. This development, in turn means that many retail sectors have to invite customers to spend some time there in order to be able to generate any sales in the first place. Many chain stores already operate a parallel online distribution of their goods so that the point-of-sale function of the actual store loses its significance. The classical sale is no longer the centre of attention. Instead, it is about the customers experience and benefit before and after the purchase. The shop becomes a meeting point, field of experimentation or test facility. And new places for self-expression are coming up. And also accounts for the increasing significance of the catering trade for inner-city life. Restaurants, bistros, lounges and ice-cream parlours not only dominate the squares in the town centres but also increasingly expand to places on pedestrian zones within walking distance. There has been a change in quality here meanwhile. Market-leading burger chains are being strongly rivalled by ever more sophisticated restaurant chains enticing hungry customers with the so-called “front cooking concepts” à la Vapiano. While the fresh preparation of the desired food takes longer, the customers do accept this to a certain extent, settling in lounge chairs which afford a view of the passing crowds. See and be seen!

The growing significance of the catering business for inner-city life has also been recognised by the managers of large shopping centres. Having accounted for an area of about 4 % initially, this figure has risen to 6% at present. New projects even plan a catering share of 10% distributed over all storeys.

However, not everybody views the increase in catering concepts positively. Often, there are different opinions with respect to the design of the outdoor installations, outdoor advertising and the municipalities’ claim for parking space redemption fees. And, quite understandably, the neighbouring shop operators are not exactly thrilled, when the chairs and tables outside keep people from passing by the shop windows. Proprietors are reluctant to converting their shops into catering operations because of the extensive capital expenditure on hygienic installations, ventilation pipes, fat separators, increased fire protection, etc., especially since the rents achievable in this industry often cannot match the top figures of other trade sectors.

Anyway, retail has long understood that it has to provide many concepts to make people stay, if it wants to stimulate the purchase of products that do not form part of the absolutely essential goods. An excellent example of this is the Hamburg-based outdoor specialist Globetrotter who set the marketing course with the opening of its branch in Cologne four years ago. The core of the 7000 m² Olivandenhof, which was originally planned as a location for 60 shop units, was removed and furnished with a rain grotto, climbing tunnel, and a cold chamber. The building is dominated by a huge water basin in the inner court, where one can try new kayaks, diving suits, etc. before buying them. Currently Globetrotter is planning a similar 6000 m² project in Dresden. A new adventure department store is to be realised there in the Florentinum complex on Prager Straße (previously P&C) by autumn 2011. For small and medium-sized towns, complex sales concepts of that sort are out of the question, of course, but similar activities are definitely possible on a comparable scale. Wine seminars at the delicatessen, fashion shows at the women’s garment specialist or beauty and health seminars at perfume shops, drug stores or pharmacies are increasing in popularity and not seldom even take place after the general opening hours.

Institutes such as the savings banks might combine their main halls with a bistro restaurant as in the Homburg Talstraße or with a Cash@Coffee concept as in the Dortmund Ostenhellweg. Recently, even bakery chains have been exploring ways to expand their shops, which were initially only designed to maximise the turnover of their products. Only those who invite people to stay will be able to sell properly. This trend has also been recognised by many towns, particularly by those in direct competition with other centres. The modernisation of a pedestrian zone mostly means that the previously dismal (washed-out) concrete slabs are replaced with natural stone paving – often placed in patterns.

While, the supplementary “furnishing” of pedestrian zones with avenue trees, benches or playground equipment might improve the quality of the stay, it is not entirely undisputed among retailers depending on frequentation. Just as for signs and product stands or sunshades, it makes sense to coordinate this closely with all parties involved.

In summary one can state that the observable trend back to the town centres does provide a higher frequentation for the retail in 1A locations, but the rising number of passers-by does not automatically result in increased turnover due to other adverse effects on consumption. Only if urban developers and retailers manage to improve the quality and thus the duration of people’s stay in the town centre or shop, will it be possible to prevent the migration to competing locations and to stimulate sales.

The downside of these new supplementary functions in retail, such as coffee or Champagne bars, presentation stages, projection walls, etc., is the reduction of the turnover rate by sales area. This, in turn, results in increased floor space requirements, in order for a retailer to contribute to this “downtown adventure store”.