Archives : September 2015

 

• Deep demographic changes, evident starting from the mid-2000s (general slowdown in population growth, a significant increase in the median age of the population),
• Tendential evolutions in household consumption allocation choices in France in favor of real estate, intangible services (health care, education in particular) and the emergence of alternative consumption patterns (sharing, barter, unmediated consumption),
• Sustained economic growth slowed down permanently,
• Reduction in the rate of change in purchasing power,
• The arrival of the maturity of ICTs and the effervescence of e-commerce, which revolutionizes the customer relationship, the logistics circuits and the time of commerce.

At the same time, in a rather paradoxical way, the pace of production of real estate intended for the establishment of traditional physical commerce does not slow down:

• The annual amount invested in commercial real estate in France has been significant on a trend basis since 2005-2006 and has even regularly reached record levels since 2012,
• The annual pace of commercial exploitation permits remains high, although lower than the peak recorded between 2007 and 2011,
• This rate of construction, combined with an important commercial park located in the European upper-middle range, adds up to a significant impact on the local economy.

This high level of investment, which may seem unrelated to the general economic situation, is explained by:

• The high level of return achieved by commercial real estate in relation to the real, moderate risk it generates for investors,
• The highly professional structure and the competitive nature of the commercial real estate development sector,
• The appeal represented for elected officials by the display of job creation in the sector of low-skilled and non-deportable retail.

We are therefore in a paradoxical situation where:

• The fundamentals of trade seem to be permanently questioned,
• Alternative models experience unequal fortunes: undeniable success of e-commerce and the drive-in model; emerging models (temporary commerce, short-run circuits, collaborative commerce) still very embryonic, due to the lack of economic models sufficiently stabilized to justify significant and sustainable private investment;,
• The production of traditional commercial real estate remains high,
• The trade crisis, and its counterpart in the commercial real estate sector, is perceived very unevenly depending on geographical areas, formats, and types of businesses.

A likely future: personalized commerce

The future of commerce in France is neither a return to the status quo ante nor the disappearance of physical commerce in favor of alternative models (e-commerce, short circuits).

Like related markets in mass commerce, which have also accompanied its development in France since the 1950s (automobiles, radio-television), the trade sector is segment in:

• personalizing its offering, a process facilitated by the revolution of big data that allows for a better understanding of its clientele and its loyalty,
• diversifying the channels through which customers perceive and purchase the same product,
• investing heavily in the back office of the business (supply networks, logistics optimization, data, CRM, predictive tools…).

This movement towards personalizing commerce is reflected in the success of sites with a strong identity (major shopping malls, leaders in their respective shopping areas, attractive and renovated retail parks, flagship stores in city centers) or with a strong ability to attract customers (traffic-oriented stores).

This, however, translates into a slow decline in the urban forms dedicated to commerce that either do not allow reaching a specific clientele or do not offer optimal operating conditions. This crisis is not limited to a specific urban typology. It affects city centers, suburbs, and even peripheral areas when the commercial assets present there do not meet these two fundamental criteria. In a constrained economic environment, these struggling sites are then destined to gradually disappear and become vacant land, which may appear as a new phenomenon in France but is already well established in many other countries.

How to conceive commerce in the city?

Designing urban commerce is first and foremost, prior to any project, appropriating the segmentation logics the commercial market by distinguishing commercial sites and projects no longer solely by urban form or location within the agglomeration (city center, outskirts, shopping center, retail park…), but by the target audiences for the proposed offering and the types of expectations of that audience in terms of accessibility, supply, and related services.

It is then a matter of trying to develop one offers the most diverse range capable of meeting the aspirations of a clientele seeking personalized service:

• There is no longer a question of simply ensuring that very homogeneous offers are distributed across the territory, each of which shares or competes for its respective catchment area,
• Rather, while maintaining a mass-market offering of mid-range products that meets functional purchasing needs, the goal is to enrich that offering by preserving and/or developing sites with a very distinct identity, aimed at a specific moment of purchase and offering the services tailored to that moment of purchase (delivery, point-of-sale, hybridization of services, related event activities…).

Designing urban commerce also means being demanding towards project developers, both public and private:

• to be selective in the development of projects,
• verify the adequacy of the project with the aspirations of the target clientele (examination of motivations and visit times, verification of the types of offer expected, examination of the clientele’s sensitivity to such an innovation),
• ensuring the (economic) reality of the proposed ambitions, and in particular the investments in personalizing the offer (ambient treatment, richness of the services offered, quality of the welcome, enrichment of the offer in terms of leisure activities, culture, and gastronomy…),
• Ensure that the proposed modifications are reversible.

It is also being prudent in the face of facile arguments that trade is simply perceived as a factor of financial balance of operations and/or an urban revitalization factor. A commercial facility can only meet these two aspirations if it operates properly and to do so it must first meet its clientele…

It is finally to anticipate the generation of ruins and accompany their transformation, especially for the benefit of housing, whenever the issues of service delivery, public infrastructure and the environment allow for it.