CANNES, France — Retail has reached a tipping point: Omnichannel is dead.The industry is ditching the catch-all used to describe wide-ranging answers to the struggle for a balance between physical and online worlds. It’s now about becoming seamless.Having replaced the multipronged expression with a more streamlined version, the industry is also carving out space for a heavier food presence, much of it fresh and organic; oversize real estate developments where man-made ski slopes vie with luxury shops and fast-fashion retailers; rejuvenated city centers where cars aren’t allowed, and fancier outlets positioned to tap into traffic flows.While the retail real estate trade show Mapic on Nov. 15 to 17 in Cannes, France, this year dished up its customary smattering of contrasting visions of the future, the phasing out of an omnichannel ideal in favor of a smoother blend of physical and digital shopping served as a unifying theme. There were more than 8,500 attendees this year from 80 countries: 2,100 retailers, 2,500 developers and 1,000 investors.“We have been talking a lot about omnichannel and we believe that the future will actually be no channel,” said Franck Laizet, a partner at McKinsey & Co. This means ever-decreasing barriers between online and physical experiences, Laizet explained, citing the likely disappearance of the more cumbersome aspects of physical retail such as checkout stands.Alibaba, for example, is working on integrating payments with facial recognition through smartphones to implement in mom and pop stores, according to Sébastien Badault, the company’s managing director in France.[caption id="attachment_11054478" align="aligncenter" width="600"] Sebastien Badault, Alibaba's France director, at Mapic 2017.[/caption]“This idea of getting rid of channels, not talking about omnichannel but talking about no channel — we call it new retail, but it’s the same principle,” Badault said.The executive had several examples to illustrate his company’s approach to mixing offline and online activities, noting his company sees great potential in the grocery sector in particular.The Chinese e-commerce behemoth has been opening Hema supermarkets in China over the past year and a half, Badault explained, describing how the stores cater to the varying needs of different consumers.The working mom can order organic, pre-cut vegetables on an app for home delivery within 30 minutes, including a live lobster, and the option of ordering it cooked, according to Badault. Meanwhile, the single guy, perhaps leaving the office at 11 p.m., can swing by the store, grab a cold beer from the shelf and have the lobster cooked up and served to him in the store’s restaurant. The bachelor might also pause to buy bread and milk for breakfast the next day before heading home after his meal. The mother, meanwhile, could turn a visit to the store on Saturday into a family outing to check out cooking lessons offered there.“This is what we see as…the future of retail,” Badault explained, noting he has visited and tested the new stores.“I think that they really are the most advanced integration of new retail that I’ve seen anywhere in the world,” Badault added.Regional actors, too, are branching out from their traditional roles in order to stake a claim on the new territory and secure a position with tomorrow’s customer.“We have done in-depth studies in Asia, the U.S., Europe and the Nordics to find out what retailers think, what they’re struggling with, what consumers think, and [at] tech companies to find out where are we heading and where are we standing right now,” said Annelie Gullström, head of business development with the Swedish property investment group AMF Fastigheter.The exploration has led the company, which owns five shopping centers in central Stockholm, to extend its business from “leasing square meters to becoming a service provider,” said the executive, who offered to share her contact details by waving her hand in front of a smartphone — the chip embedded under her skin, which she uses to open doors, would relay the information.“Retailers, they are screaming for help,” Gullström said, describing a world where Amazon is applying for permits to use lamp posts as docking stations for drones, and where smart shopping windows, robots, virtual and augmented reality are becoming increasingly present.“Retailers are really concerned because they don’t know who to bet on, so they are stressed; they are really struggling with profitability,” she added.Gullström’s response, which she plugged at Mapic this year, comes in the form of The Lobby, a new concept her company bills as “not just another selling point in a cool new environment” but rather “the gateway to Sweden.”A wholesale fashion brand, for example, seeking to test the Swedish market would only need to send along its merchandise and a link to its web site: “We will take care of the rest,” she added.Services include click and collect, multimedia shopping tools and media exposure, explained Gullström, who notes that her company is disrupting its core business with ready-made packages for potential clients in spaces ranging from two to 20 square meters.Ten square meters is enough to sell kitchens in, with a comfortable chair and a pair of virtual reality glasses, and the rest of the space available to discuss colors with a consultant, according to Gullström’s vision. As for a space as small as two square meters, why not use it to sell Burberry scarves for a couple of months, she asks, noting that she hasn’t contacted the London-based fashion company for the proposition.Andrea Abrams of Abrams Global and former Mapic director Lara Hinton of Hinton Partners are two other examples of industry executives who have been evolving with their business over the years to find themselves increasingly in consulting roles. Fashion and retail are blending together, the two explained, with fashion designers seeking to become retailers and retailers wanting to compete in the fashion world.“We are working to help famous fashion designers that haven’t been able to cross over into retail, to find operating partners and funding,” said Abrams, who worked as a real estate developer in the past. Designers, she noted, are wrapped up with making collections, showing them and selling them to department stores don’t necessarily know how to operate retail stores themselves.The pair were working with a designer who had started a line of clothing that was sold in 80 points in Japan, 10 in Europe and only a few boutiques in the U.S., and thought she should open a lot of stores, Abrams explained.“Instead, for her, the best strategy is to clean up her wholesale, increase her e-commerce site because it’s very successful and also look at where the market is — part of it will be a series of pop-ups, appearances, showrooming — it doesn’t always have to be opening a store, I think in her case she’ll have one flagship and that’s it,” Abrams said.[caption id="attachment_11054472" align="aligncenter" width="600"] A rendering of waterfront development in Oslo.[/caption]It’s difficult to represent a lot of landlords, given their high demand for unique products, she added, noting that for the U.S., the pair is sticking to the colossal American Dream project.Tucked next to the MetLife Stadium in New Jersey, the project will be a blend of high-street-inspired shopping, influenced by Bond Street in London and SoHo in New York, with luxury stores including Hermès and Louis Vuitton, a ski slope and water park.Don Ghermezian, a second-generation mall developer who owns and runs the $4.8 billion project set for opening in March 2019, explained that competition from online commerce has added pressure on both real estate owners and tenants.“What I tell every tenant that I talk to is that it’s a two-way street. The tenants are failing the developers in that there aren’t enough tenants out there that are innovating and giving a reason to not buy at home, to come to the mall,” Ghermezian said.“On the flip side, there are no other developers in North America that are creating experiences and reasons for people to come out, so we really wanted to push that limit as much as we could at American Dream,” he continued. His answer was to redefine the traditional mix of entertainment to shopping, by significantly expanding the entertainment offer. Originally, Ghermezian intended to allot 30 percent of the space to entertainment, but the proportion has since swelled to match shifting consumer trends.The center’s more than 3.1 million square feet will dedicate 1.7 million square feet of entertainment, including an observation wheel with views on Manhattan, DreamWorks’ first water park, a Nickelodeon-branded interactive theme park, permanent Cirque du Soleil performances and an ice hockey rink that meets National Hockey League standards.American Dream targets 40 million annual visitors a year, half of them tourists who can use the site’s tourism center, hotel and convention center.The American project’s European counterpart, EuropaCity, a newcomer to Mapic this year, is also betting heavily on tourists and entertainment. Tucked between two Paris-region airports — including France’s largest — the sprawling complex is designed by Bjarke Ingels Group, the Danish architects behind Google’s Space Age Silicon Valley headquarters. The company set up a large booth outside of the conference center for Mapic, where visitors were offered espresso and French pastries and the option of sitting at an outdoor table or standing inside a towering, semicircular shaped booth to watch a video projection of the development.The Chinese company Wanda Group is injecting three billion euros into the project, partnering with the project’s originator, the real estate arm of the French grocer Auchan. Wanda had a crew of leasing and marketing managers at the Mapic trade show.Key to the EuropaCity strategy is the network of transportation, with plans for a metro line in 2024 that will shuttle travelers to the Charles de Gaulle Airport in seven minutes or the Paris Saint-Lazare train station in 24 minutes.Across the channel in London, meanwhile, the opening of a $21 billion “Elizabeth” railway line next year will bring an additional 60 million visitors to the western side of the city, according to some estimates.While the brand new mammoth real estate projects inch toward completion, high streets in city centers find themselves under pressure to spruce up their offers. The New West End Co., which represents 600 owners of retail space in London neighborhoods of the city’s Bond Street, Oxford Street and Regent Street, have helped drive the British government’s investment of nearly $80 million in the area, including Wi-Fi and better lighting.Businesses in the area also expect to benefit from a surge in demand as international shoppers hunt for bargains thanks to a weaker pound following the Brexit vote.“We’ve had the most incredible year in terms of luxury sales 30, 40 percent up. That’s a Brexit bounce, it’s not sustainable,” said Jace Tyrrell, who heads New West End Co.“We can’t leverage our whole strategy on the pound decreasing, we have to think a bit longer term than that,” added Tyrrell, noting that Brexit has cast uncertainty on the business environment.Retailers and restaurants in that section of London employ a hundred thousand people, so the departure of Europeans due to Brexit is prompting staffing concerns, he added.Tyrrell also stressed the importance of ease of access to the country in terms of visas, noting that France is doing “very well with the Chinese — 90 percent more than we have.”Also vying for Chinese tourists are retailers in Oslo. Norway is seeing the fruits of efforts to improve relations with China in recent years — relations had soured in 2010 when the Scandinavian country granted the Nobel Peace Prize to Chinese dissident Liu Xiaobo. After a long, cold spell, the governments have been working to improve relations, resulting in growing numbers of Chinese visitors to the Northern country. Direct flights between the countries, along with interest generated by the Disney movie "Frozen" have also helped, noted Ellen Lewis, vice president of retail marketing for Meyer Bergman.The London-based developer recently launched Oslo’s Promenaden fashion district, catering to local luxury customers as well as tourists — tourism sales rose by 29 percent last year, according to the Global Blue tax-free shopping processing company.On the waterfront of Oslo, Norwegian property developer OSU is transforming a formerly industrial harbor area into a new mixed-use district called Bjørvika, which includes a section called Barcode, with apartments, shopping and business headquarters.[caption id="attachment_11054470" align="aligncenter" width="600"] Oslo waterfront development[/caption]“It’s the most comprehensive urban development in Norway, in the city center,” said Rolf Thorsen, OSU chief executive officer, who added the project reflects a trend of living, working and spend time in the same area as communities did in ancient times.Upon completion, the neighborhood expects to count a population of 10,000 to 12,000 living in the area, 20,000 people working there and a footfall of six to seven million. The idea is to minimize car traffic, set aside parts of the waterfront for swimming activities and turn the city toward its natural surroundings — the fjords. A new Edvard Munch museum, due to open in 2020, will anchor the cultural life of the neighborhood.Another theme of Mapic this year was a focus on outlets, some of which are turning to cultural events like art exhibits and other activities to draw in consumers.Viaduc Village, an outlet planned near the immense Millau Viaduct bridge in Southern France, will tap into its local heritage by bringing French leather brand Anne Delaigle to a mix that will include international brands like Ugg Australia and American Vintage. Lionel Mary, general manager of Group IDEC Invest, the site’s developer said the company has leased 40 percent of the new space, due to open next summer.For Adrian Nelson, leasing director at McArthurGlen, Europe’s largest designer outlet developer and owner in Europe, keeping the right mix of brands is key.“We’re curating a mix in the same way that a department store would,” Nelson said. The executive warns against too much clutter and commercialization in a space, noting the importance of creating an environment that people feel comfortable in.McArthurGlen held an outdoor yoga event this summer in its Vancouver outlet center, which it said helped draw more than 23,000 people for the day.Colliers International hosted a more intimate early-morning yoga session on the beach during the Mapic conference, followed by a hearty breakfast and handouts of vegan energy balls made by Deliciously Ella. The real estate services company issued a report that explored a renewed interest in physical space on the part of internet retailers looking to reach consumers as the growth rate of sales online begins to slow. The company also released a study of the potential for retailers in Eastern European countries, highlighting robust growth in Poland and Romania at around 8 percent, year-to-date.Amsterdam-listed real estate company Atrium, which is developing three malls in Warsaw has been focusing on developing applications to help bridge the gap between physical and online shopping, ceo Liad Barzilai said, in another example of retail investors adding getting increasingly involved in helping their tenants draw customers.With technology serving as one of the major forces shaping retail's future, local players are facing increasing pressure from the larger, global players.“Retail has moved from a very local and domestic game to a global game with giant online players like Alibaba and Amazon having the scale to invest in technology,” Laizet noted.
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