Brands have long understood the importance of presenting their sustainability credentials to consumers. Along with other policies, such as those relating to bullying in the workplace and mental health, sustainability plays an important part in a brand’s identity, and rightly so. As things stand, sustainability, as retail brands view it, seems to revolve largely around the manufacturing process, recycling, and environmentally friendly packaging – probably because these are things that are relatively simple for them to communicate, and easy for consumers to understand. However, if they want to be as sustainable as possible there is so much more that they should be looking to embrace, particularly when it comes to outlet centres.
Sustainability is widely acknowledged as having four main pillars – environmental, human, social and economic – so, let’s examine each of these areas in isolation and look at what’s on offer for brands who really want to embrace sustainability.
From an outlet perspective this is probably the most important of the four pillars and has influenced Rioja Estates’ evolving approach to development. For our latest project, Malmö Designer Village, we’re investing around €5.5m in landscaping, which is significantly more than on previous schemes. This is partly for aesthetics, but it also enhances the customer’s experience – the walk from the car will be their first interaction with the development. We are also putting beehives on the roof, which might sound odd, but this is actually really important for the local eco-system. In addition, we are recycling rainwater, and putting a wormery in the service yard to turn food waste into compost, which we will then put onto the landscape. We also plan to reduce water consumption through super-efficient toilets.
Energy use related to heating is another big topic. At Malmö Designer Village we are installing ground source heat pumps that will provide low energy heat directly to each unit via heat exchangers. This comes at an extra capital cost to us, but significantly reduces the amount of money that brands need to invest on fit out, as well as making reductions in energy use. For those outlets where an open door policy is in place and a ‘heat curtain’ is required anything that reduces the cost of heating is to be welcomed, because in case you hadn’t noticed, energy isn’t getting any cheaper! The ground source system is powered by hidden solar panels on the 260,000 ft² roof, creating further energy efficiencies.
We are also looking at ways to reduce the number and frequency of deliveries through better use of space. Aside from discontinued lines, we know that a considerable percentage of the products sold via branded outlets consists of returns – internet shopping has increased returns enormously as people tend to buy more items than they plan on keeping. The returns from online channels are usually held at a central depository and sent to outlets via regular ‘top-up’ deliveries, resulting in frequent vehicle deliveries and therefore higher emissions. The lack of on-site storage space at most outlets means that the brands have little option but to work this way. Malmö Designer Village will provide space above the units that is available for storage, and accessible via a goods lift, to enable brands to hold more stock on site, cut down on deliveries, and reduce vehicle emissions.
In recognition of a significant embedded carbon cost to the retail fit out itself, we have developed retail fit out guidelines that encourage and support retailers to consider the environmental impact of the way they use materials. It is one of the reasons why as landlords we provide standard shopfronts that can be retained when the brands change.
Much is made of enhancing the consumer’s experience, but what about the people who come to work at an outlet? At Malmö Designer Village we’re laying on dedicated electric shuttle buses first thing in the morning and last thing at night – ensuring that they are timetabled to meet the trains arriving at the nearest station – in order to make it as easy as possible for employees to travel to and from work. This reduces the number of car journeys being made and frees up valuable car parking spaces that might otherwise be taken up by employees’ cars. Staff retention is a real issue in retail, as it is in many sectors, so initiatives that support employees are essential for the future of retail.
Acknowledging that Malmö Designer Village is an outdoor centre in a temperate climate, keeping people dry will be essential to the visitor experience, so we have introduced glass canopies over the walkways to take advantage of natural light. This will also allow lighting from the stores to illuminate the walkway, reducing the need for additional external lighting.
Many outlets are sited on out-of-town motorway junctions where they are readily accessible and avoid contributing to city centre congestion. The catchment for outlets is much wider than traditional retail and can extend to approximately a 90 minute drive. Research by McArthurGlen shows that most people go to outlet centres in groups of two or three, unlike when they go to shopping centres or food stores. We are therefore looking at ways to encourage car sharing by providing convenient designated car parking specifically for car share users.
Online and digital retail is well established, and retailers are responding to changing behavioural frameworks. However, merging digital platforms with physical stores has proven to be the most successful approach. This is in recognition of social interaction needs and the fact that certain products are better suited to physical interaction, such as getting clothing that fits.
There are many ways in which we are making the economic case for sustainable outlets, from positioning, design, and operational strategies. The original concept of outlets is sustainable in itself, in that it was conceived to allow the clearance of excess products in a way that provides the consumer with branded fashion at a lower price – enabling more people to afford branded goods – and does this in a way that is profitable for the brands, thereby sustaining both them and the economy.
In addition, the capital cost of land that outlets are built on, and the cost of the outlet buildings themselves, is considerably lower than that of shopping centres. In outlets, the expenditure is focussed only on areas with which the visitor will come into contact. Therefore, outlets can be said to be more economical.
So, there you have it, a brief overview of just some of the ways in which developers in general, and Rioja Estates in particular, are trying to drive the move towards more sustainable outlets. But as is often the way with new products or initiatives, sustainability comes at a cost. The big question therefore is whether the other stakeholders involved in creating new outlets, including brands, funds, and the construction industry, are prepared to share that cost to build a more sustainable future.