Theory of Evolution
Published: 20 January, 2011
Mall commercialisation has moved on considerably in the past 10-15 years and in the US where commercialisation activities are more advanced than here, RMUs are evolving into kiosks. But will the trend cross the pond?
Savills’ commercialisation manager, Sian Nicholls thinks change is inevitable. “RMUs are definitely evolving into kiosks,” she says. “You can tailor kiosks to the scheme so they’re in-line with a centre’s aesthetics and branding - they look 10 times better.”
According to managing director Andy Ferns, Unibox – which provide kiosks for a host of UK and international malls including MetroCentre, Lakeside, Bluewater and St David’s – has seen enquiries for walk-in kiosks increase substantially over the last 12 months, with more sold last year than RMUs. The company is currently working on kiosk projects with several high profile shopping centres.
Unibox has always designed and produced kiosks, the RMU side of the business followed. “The RMU business grew steadily over a number of years, eventually achieving far greater sales volumes than kiosks,” says Ferns. “Over the last year or so this trend has reversed as kiosks become more popular.”
According to Ferns, a number of factors have caused this shift in product popularity, including an increase in retailers who want bespoke retail display to best merchandise their products and promote their brands, combined with “biting cuts” in investment due to the recession reducing spend on new RMUs.
flexibilty
Commercialisation and marketing specialist Shoppertainment works with 80 of the top 150 UK shopping centres. Managing director Clare Andrew believes that RMUs are just as popular as ever and can’t see huge demand for kiosks.
And she thinks it all comes down to flexibility. “In this climate people don’t want big commitments. If it’s not working out in one location, traders want the flexibility to move somewhere else. They might try selling in different regional towns and once they’ve maximised sales they might move back to a location where they had success and do another season there. It’s much easier to do that with an RMU.
“I think RMUs break the mall up and they’re good for people who like to mooch about,” she explained. “Sometimes people are a bit lazy, they like the freedom to browse and might not necessarily stop to take a look at something unless it’s on the mall right in front of them.
“Small traders start in RMUs and move on to kiosks – units are the final stage. It’s like an incubation period but kiosks are hard to put in the middle of the mall and they’re more permanent so the rates are higher.”
longer-term licences
However Andrews admits that kiosks might become more widely used in time as the market improves.
“There’s been a change in mall commercialisation in the last couple of years,” explains Savills’ Nicholls. “It’s become more of a priority in the recession and centre management are looking at innovative ways to use mall space and bring in interesting new brands and products - a good kiosk can add ambiance to a shopping centre.”
And Landlords get better rents from kiosks. “Bespoke kiosks tend to be on longer term licences than RMUs - it might be a five-year term rather than one,” says Nicholls. “So they’re beneficial to landlords because short-time licences are labour intensive.”
Nicholls gives Calendar Club as an example. “Calendar Club monopolises the Christmas market,” she says. “They take on prime locations, pay extremely good rents and trade very well. They already have sites booked for next Christmas.”
And a longer license has other benefits. As Nicholls’ colleague, marketing manager Claire Johnson explains: “Kiosks give the customer confidence because they look longer-term. If a customer buys something and they need a refund they can be confident that the retailer’s still going to be there when they go back.”
According to Ferns, other benefits of kiosks over traditional RMUs include the modular design which can be easily reconfigured to suit the merchandising requirements of most retailers, ease of installation (and removability) and the extensive branding opportunities.
He defines the two main types of kiosk as low level island units which he calls “stand within” or “walk in” - high level units that customers can walk into.
Nicholls warns that kiosks aren’t going to work in every centre because they’re bigger than traditional RMUs and can be difficult to place.
But Ferns disagrees. “It’s difficult to think of a centre where kiosks will not work because low-level island units can be organised in a range of shapes to fit dead space,” he explains.
“Kiosks are ideal for malls with wide corridors or courtyard areas but they can easily be reconfigured to fit awkward spaces - under escalators, link bridges and awkward corners - that may not be suitable for RMUs. This provides the opportunity to commercialise space previously deemed unsuitable, maximising all important mall revenue.”
“Walk-in kiosks or glass enclosures provide first class retail space. These tend to be of contemporary design, with excellent versatile display,” he says. “Maximum flexibility of display is essential to adapt the units to suit the wide variety of retailers and traders that will occupy the unit throughout the kiosk’s lifecycle. The walk-in kiosk offers a high level of security suitable for internal or external use.”
The design, specification and cost may vary to suit the environmental and security requirements of the centre. Enclosed walk-in kiosks offer a higher level of security and weather resistance but are more expensive then the low level stand within kiosks.
selling direct
Unibox has always done business with agents, shopping centre managers, commercialisation specialists, brands and independent and multiple retailers but Ferns says that retailers are more likely to buy direct than they used to. However, as Nicholls warns not all RMU vendors can afford to invest in a kiosk.
However, she does believe that kiosks complement rather than disguise the boutique feel of independent retailers.
“There are different types of kiosk available to keep the quirkiness of each retailer for a unique set-up and independent feel,” she says. ”But sometimes you may have to get operators to think the same way as the shopping centre and not their own way to really get them integrated into the mall.
“It’s important for landlords to invest money in their scheme and get the right retailers set-up long-term so they can grow into a business. More and more operators have a better understanding now and are suddenly picking up business and expanding to more sites.”
“Mall traders could be future large retailers and if you’ve got a good tenant why not keep them?” she asks.
Few disagree that kiosks are a better option than RMUs in terms of aesthetics. They are more permanent boosting customer confidence and giving landlords and asset managers a break from labour-intensive short-term lets but for operators they can be a gamble. Kiosks are becoming more popular but whether they will take over from RMUs or continue to work alongside them it remains to be seen.
