This year's Property Council Retail Conference included insights from property development, realty, design, and AI.
This year's Property Council Retail Conference included insights from property development, realty, design, and AI.
The Property Council’s two-day Retail Conference kicked off this week with a tour through some of Auckland city’s most affluent suburbs, which are setting a new precedent for retail design in Aotearoa.
Day one: The tour
Remuera
The first stop on tour was in Remuera where Match Realty’s Mike Hammerexplained the town centre’s need for re-gentrification.
Hammer said expenditure in the high-income neighbourhood was traditionally spent in areas like Britomart and Ponsonby, leading to 1050 Remuera, a laneway-style development modelled after Sydney’s Double Bay.
The laneway now houses boutique Kiwi retailers like Thai Village, Elle & Riley and Wakuwaku.
1050 Remuera was modelled after Sydney's Double Bay according to Match Realty's Mike Hammer.
Newmarket
Scentre Group’s Justin Kean said the team are looking to repurpose Newmarket’s Nuffield St to its former glory after the refurbished Westfield mall has turned the street into “an off-Broadway tragedy”.
However, Kean said the adjacent New World Metro is the first of its kind in New Zealand, with warehousing, storage and parking built behind the supermarket to capitalise on street space.
Kean said the supermarket “sets template for how [Scentre] want to move the precinct forward”.
He said Westfield Newmarket had a $700 million turnover in 2022, reaching 500,000 locals who are 12 per cent wealthier than the Auckland average.
Scentre Group's Justin Kean at Westfield Newmarket.
Ponsonby Central
Ponsonby Central was designed to bring European-style markets to Auckland but has reduced business from Ponsonby’s main road.
The centre prefers to house small businesses rather than chains, with developer Andy Davies handpicking El Sizzling Chorizo and Dante’s as some of its original tenants.
Commercial Bay
Architecture firm Warren and Mahoney were in charge of designing Auckland CBD’s downtown shopping precinct.
Head of design Blair Johnston said Wynyard Quarter still has another 15 to 20 years before it’s completed, but is being developed with future generations in mind.
“What Auckland desperately needs is a plan that extends beyond the current generation,” Johnston said.
Commercial Bay centre manager Andrew Trounson said a new rooftop bar in the works will bring the number of retailers at Commercial Bay to 120.
Match Realty founding director Mike Hammer.
With Queens Wharf and Princes Wharf bringing in cruise ship passengers every second day, tourists are a major pull for the developers, but locals still make up 30 to 40 per cent of its customers, Trounson said.
“We lost the corporate and tourist market in Covid, so it’s a testament to the centre that the local community supported the mall.”
He said a big market the team are still waiting on is the Asian market, with Chinese tourists still low on numbers.
The centre has 26 food operators, with some operators turning over more than $100,000 of revenue per square metre.
Trounson said developers Precinct Properties wanted to design a higher-end offering than an average food court, making way for the multi-level Harbour Eats.
“If your offering is right, you can be super successful in this space.”
Commercial Bay's Harbour Eats sees some tenants turnover more than $100,000 per sq m.
Day two: The conference
Barkers’ experiential retail experiment
Barkers managing director Jamie Whiting said the company was “running in the red and heading for rocks” when he joined in 2010, but managed to turnover $20m profit by 2018.
He bought 25 per cent of the company in 2010.
Store environment and design were on top of Whiting’s list, starting with Barkers Lambton Quay.
“Our stores were shit because nobody gave a shit,” he said.
“You can’t put up a sign up and hope someone will buy something,” Whiting told the crowd.
Instead, he focused on quality of products and stores, doing “everything on a shoestring”, refitting stores out of pocket between 2012 and 2018.
In 2018, Whiting said Barkers made $20m in revenue which was invested back into the business and started a new focus on sustainability.
Barkers managing director Jamie Whiting.
The company partnered with Saitex in Vietnam, a clean denim producer which he “stumbled across on Instagram”.
Whiting told Saitex’s chief executive that Barkers’ annual demand for denim is what Saitex produces in a day but their shared values were enough to strike up a partnership to lead the company to more sustainable production.
Melbourne’s Westfield Knox
Scentre Group general manager Justin Krzywokulski gave the audience a run-through of Westfield Knox, 25km east of Melbourne CBD.
Krzywokulski said the mall’s total trade area captures 470,000 people, comparable to Westfield Manukau (495,000 people) and Westfield Riccarton (525,300 people).
He said the biggest challenge for the mall is the 3.1 per cent decline in sales for Australian department stores, while retail sales increased 13 per cent in the same period.
The closure of Knox’s anchor department store Myer left 18,000sq m of free floor space across four floors.
This year's Property Council Retail Conference emphasised design and space in retail.
This led to a reimagining of the centre to “anchor by place”, establishing distinct sections rather than retail-based anchors.
With the closure of Myer, Krzywokulski said the mall’s lifestyle offering was replaced with brands like Uniqlo and JD Sports.
The first level of the mall is home to food retailers like Woolworths and Aldi while making room for Melbourne’s growing migrant community with its Asian gourmet market, combining food retailing and catering.
With a swim school, public library, basketball court, and community event space, Krzywokulski said the mall has become a hub for locals.
Retail and AI: Invading your own privacy
Lynker Analytics principal of data science David Knox said everyday use of artificial intelligence (AI) will be the norm in a year.
Our heavily monitored cities mean AI can track and map the flow of people and traffic, helping make key urban design and retail placement decisions, Knox said.
“It comes down to what customers think. Is it creepy or is it cool? It’s both.”
Knox said smart mirrors have a slower uptake than predictive advertising technology but is being rolled out by clothing retailer H&M in the United States to improve the online shopping experience.
He said, “It works with customers using their own devices. It’s customers invading their own privacy.”
Knox said however that AI and e-commerce are not at risk: “It is already a risk we have moved through. People go to bricks and mortar for a reason.”
He closed by taking a few suggestions from the audience for a company name, business idea and company values. The crowd decided on:
Name: Freebies
Business: Beekeeping
Values: Green and sustainable
In a few minutes, an almost human voice read out a radio ad for the bogus business, while the big screen displayed a detailed web page complete with realistic photos of the fake product and retail space.
Alka Prasad is an Auckland-based business reporter covering small business and retail.
