1. Demise of stationary retail
The demise of stationary retail has not only started a year ago, but Corona is accelerating the trend immensely. Even before Corona, shopping centers or big department stores were under pressure. Meanwhile, vacancy is eating its way into the heart of our city centers. This can be observed in the Mall of Berlin or Armazéns do Chiado in Lisbon, both temples of consumption in prime locations. The situation is similar in many other cities: Shops in inner-city shopping malls or on shopping streets cover their shop windows to hide its vacancy.
2. Villain online trading
Digitization is one of the drivers for this development. Online shopping is becoming a matter of course for more and more consumer areas. For example - Corona has made a significant contribution to the fact that food and meal delivery services are no longer viewed as a service reserved for busy city hipsters. The startups Gorilla or Flink are already setting the stage for the next cycle. As lightning delivery services, they deliver groceries to your front door within 10 minutes - at normal retail prices!
Stationary clothing retail trade - a classic inner-city store - is also under pressure: the fashion chains Adler and Pimkie have filed for bankruptcy, Promod is completely terminating stationary retail throughout Germany. According to Handelsverband Deutschland HDE, 60% of all inner-city companies are on the verge of bankruptcy.
In contrast, online business is booming: Zalando was able to increase sales by over 15% in 2020. Amazon even made a plus of 33% in Germany. Online shopping is convenient, works anytime and anywhere and offers an almost infinite selection. But is that really the main reason?
3. High shop rents create monoculture
High shop rents in city centers, often only affordable by large retail chains, have also contributed to the development that city centers are becoming more and more deserted. An interchangeable retail monoculture can easily be replaced by online trading. And it is neither inspiring nor attractive to tourists. But there is another reason, too.
4. You can no longer hang anything in a full cupboard
This retail problem is fundamental: cabinets and shelves in private homes are bursting. A German citizen alone buys an average of 60 pieces of clothing per year and discards them after a year of use. More consumption is simply not possible. As a result - sales in textile industry have stagnated for years.
5. Who owns the city?
Since the financial crisis, the following has been the rule in larger cities: office and shop rents increased while vacancy rates were falling. Often paired with the steady growth in hotel and vacation rental offers. The city belonged to office workers, business travelers and tourists. Now that they are gone, there is only a gaping emptiness.
But there is hope: The digitization of everyday life and Corona lead many people to realize what is important for them: Real human interaction, resonance, culture, enjoyment, and conscious consumption. A new start in city tourism will succeed if - in addition to the sophisticated hygiene concepts - the framework parameters and narratives are also realigned. Which target groups are now particularly interested in city trips and which have the willingness and possibility to spend money? How can they be reached efficiently and how can they be motivated to book? This requires good stories based on professional data analytics and precisely tailored digital marketing. We are happy to help!