As we begin another year in this industry that remains as exciting and dynamic as ever, it’s with great anticipation that we look to the future and what it may bring for Scentre Group. It’s an age-old maxim that the only constant in our business is change and as it has ever been, our greatest challenge remains driving and adapting to our changing environment.
More than ever, we will bring our purpose to life by creating extraordinary places, connecting and enriching communities.
At the heart of our business are the destinations we create. We bring to life new places where people come, not because they have to, but because they want to be there.
Our centres have truly evolved into ‘living’ centres over the past 20 years, and are today much more than simply malls where people come to shop.
The holistic offerings in our centres now stretch between wellness, health, leisure, hospitality, education, work and entertainment as well as retail. The combination of these are the critical part of every Westfield centres, and how they come alive, and mesh with each other are the reason customers will come to us rather than go somewhere else. And in turn, these are the same things that will attract retailers too.
In 2017 each one of our redevelopments embodied all this.
At Westfield Chermside we opened a $355-million project that included a new fashion galleria mall, but more significantly, a resort-style lifestyle precinct that stands as its own destination. Centred on a landscaped waterway and outdoor space it includes dining options, a wellness spa, casual dining, occasional childcare, co-working, and yes – some incubated retail, located in a laneway-like setting that is almost incidental to the broader lifestyle offer.
The $80-million redevelopment at Westfield Whitford City in Perth has created a new dining destination for that city’s northern beaches, transforming a functional outdoor space into a vibrant entertainment precinct with some of the state’s best food and beverage operators, integrating with a brand new cinema complex.
And in 2018 our projects will be no different in that they will all deliver a unique physical environment that seeks to attract the customer for so much more than pure retail therapy. No longer simply a place to buy things, these are dynamic spaces that will entertain and excite.
Our major projects in the year ahead include the recently-started $720-million (NZ$790 million) transformation of Westfield Newmarket in New Zealand, where we’ll bring David Jones to Auckland along with some 230 additional retailers. With a focus on entertainment, dining, lifestyle, wellness and collaborative space, the completed centre will create a new destination in the tightly-packed local scene that is home to a community that lives and works, and can now play, locally.
The $350-million Westfield Carousel in Western Australia – also to be anchored by a brand new David Jones – will provide something similar in Perth where it serves one of the largest and most diverse trade areas in the country.
On Queensland’s Gold Coast our first ‘greenfield’ development in more than a decade is underway at Westfield Coomera, a $470 million project that will create a brand new community hub in what continues to be a major growth corridor.
Other projects underway, or due to complete during the year ahead include Westfield Plenty Valley (VIC), Tee Tree Plaza (SA) and Kotara (NSW).
And so our $3 billion-plus future redevelopment pipeline continues apace.
It reflects our commitment to the future of physical retail centres, and our firm belief in the human desire to get out and socialise and be entertained. We know the opportunity to do all that in one place, in the very same environment where they can live and work completes the total package which provides customers with the incentive to come to Westfield.
And as people continue to come together, retailers still want to be where the people gather, but in an increasingly fragmented marketplace they only want to be in the best locations, where they can ‘showroom’ themselves at the very best standard.
We’ll be retaining a laser-like focus on curating a relevant and desirable product offer that speaks to our customers and communities. And while we continue to embody the ethos that our own organisational success depends on that of our retail partners, we recognise that only the right retailers, who are relevant, desirable and appealing to customers in in the right location, will succeed.
As with 2017, I expect we’ll see some brands leave, and others come in to our centres. Last year 289 new brands came into the Westfield portfolio, and grew store networks with 592 existing retail brands. It’s likely we’ll see something similar this year as the retail industry’s ongoing evolution continues to play out.
We’ll be working closely will all those brands – the incoming that are new to our portfolio and the outgoing who may no longer be performing or relevant to the customer base – to ensure we’re providing communities with what they want, keeping our centres appealing and staying ahead of the curve in every sense.
None of this spells doom and gloom for our industry, and the most successful retailers know that. They are the ones looking at their businesses the same way their customers do: as an integrated whole, not a separate online and physical business. These are the retailers who understand what role their physical store network plays in their business success, and the connections between their stores and the performance of their online operations.
While they might still be looking to find ways on how to quantify that connection and truly understand the value of physical space, these retailers inherently know that the physical and digital are linked in the minds of their customers. There’s a two-way flow between both sides of their business, and we will collectively be looking for ways to better understand that in 2018.
The gathering and analysis of data will play a vital role in this, both for helping retailers to better understand their own business patterns, and for us to understand customers’ behaviour. Sharing our learnings with retailers will continue to be a critical element in ensuring our industry remains relevant.
In 2018 we will continue to be a customer-centric business, with a goal of providing a frictionless experience at every brand touch point.
Our ability to understand, connect with, and predict our customers’ wants will shape our future, and define who we are. Our ability to innovate, adapt and respond with agility to consumer demands is an organisational imperative.
During the year we’ll be focusing on embedding innovative capability internally, both to ensure that we’re assessing all the available opportunities for Scentre Group as an organisation at the forefront of retail innovation and also to accelerate the process of putting customers at the heart of everything we do.
Some key appointments made in recent months will drive this.
A new Chief Strategy and Business Development Officer, Cynthia Whelan, has been appointed to partner with our executive team in evaluating business opportunities for Scentre Group, setting our organisation’s strategic direction and developing the requisite implementation plans to achieve it.
Cynthia is recognised as a highly successful transformational leader in her field, having achieved outstanding results in her career in investment banking and more recently the telecommunications industry in Australia and Asia.
Our new Director of Technology, Richard Webby, will steer an integrated group whose broad mandate will be to facilitate and enhance our operations, ensuring we have the necessary digital solutions and platforms in place.
Richard joins us from the US, where he was most recently Vice President, Guest Experience Technology and Chief Information Officer Disneyland at Walt Disney Parks & Resorts. Originally from Australia, Richard has spent nearly 20 years in the US gaining extensive experience developing and integrating customer-facing solutions across multiple platforms and industries.
Both these appointments will reinforce the speed with which we capitalise on new opportunities and leverage new technology to connect our customers and retailers: an enduring factor in our continued success.
We welcome the year ahead and the challenges and opportunities it will bring for Scentre Group opportunities and challenges in equal measure.
I firmly believe that we are extremely well placed – with our unique platform encompassing a portfolio of high-quality centres, a digital advertising network and an ever-widening digital customer platform – to continue evolving into an eco-system that ensures we remain at the forefront of our industry in providing unparalleled destinations for customers and brands.
WATCH GREG MILES, COO SCENTRE GROUP SPEAK AT THE BIG GUNS LUNCH
About Scentre Group
Scentre Group’s strategy is to create extraordinary places connecting and enriching communities by owning, managing and developing the best retail assets in Australia and New Zealand. Scentre Group’s portfolio – valued at $51 billion – includes many of the largest and best living centres in Australia and New Zealand including 16 of the top 25 best performing centres in Australia by annual sales.
Scentre Group has unrivalled access to customers with 65% of the Australian population within a 30-minute drive of a Westfield living centre. In 2017 more than 530 million customers visited a Westfield centre, spending $23 billion, while the Group introduced 289 new retail brands to the portfolio and a further 592 existing retailers grew their store network by opening an additional 943 stores.
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