Consumers will vote with their feet for more sustainable retail spaces, according to a major report just released by the World Green Building Council.
The Health, Wellbeing and Productivity in Retail: The Impact of Green Buildings on People and Profit report shows that key sustainability elements including natural light, fresh air ventilation and greenery are more likely to encourage people to come, stay and buy than the traditional “grey box” mall.
The report outlines a framework that retail property owners and managers can use to improve both properties and the bottom line of retail tenants.
It says that although there is a surge in interest in health and wellbeing in the property sector, most retailers are currently missing a key opportunity to better understand how the physical retail environment can affect staff and customers.
The WGBC said it was important for the sector to be addressed as in the UK for example, it comprises 43 per cent of the total value of commercial property. Retail outlets are also the biggest emitters of CO2 within the commercial property sector.
“The days of ‘grey box retailers’ are numbered. A new breed of businesses is emerging which understands that better shopping environments lead to better experiences for consumers, which, in turn, lead to better economics for retailers,” WGBC chief executive Terri Willis said.
“This report is about empowering retailers to look within their own properties to understand and monetise how better, more sustainable physical environments can potentially drive profit, and in doing so, ultimately strengthens the business case for greener, healthier buildings.”
Case studies in the report include properties in the UK, Spain, Asia and the US, as well as Stockland’s Wetherill Park retail centre and Lendlease’s Barangaroo South.
“At Lendlease, we always put people’s wellbeing first, whether that’s the health of our own employees or those who live, work or shop in the places we create,” Paul King, managing director, sustainability, communications & marketing at Lendlease Europe, said.
“This report is another important milestone in terms of our ability to demonstrate the financial and commercial benefits of a focus on health and wellbeing by applying it to the retail sector, and will provide vital lessons for the wider industry.”
The report was led by the UK Green Building Council and its member companies in the UK, and also drew on global expertise from companies and organisations within the WGBC network.
The UK Group comprised Arup Associates; BCSC; British Land; Bouygues Development; Buro Happold; CBRE; Cushman & Wakefield; JLL; John Lewis Partnership; Kingfisher PLC; Land Securities; Marks & Spencer; Saint-Gobain; The Crown Estate and Uponor. The International Group included B+H; EBS; Great Eagle Holdings; Hong Kong Green Building Council; Hysan Development Company Ltd; Langham Place Mall; Lendlease; Rhysome; Saint-Gobain; Stockland; Swire Properties Ltd; Tishman Speyer; Uponor and Woolworths.
Chair of the project task group, Richard Francis, principal of The Monomoy Company, said retailers had a distinct advantage over other sectors because they had an extensive understanding of how consumers behave, from the amount of time they spend in stores to where specifically in stores they spend that time.
“Linking that behaviour to sustainable store design will be a catalyst for major change within the industry – change that will lead to retail spaces which are better for consumers and employees, retailers and the environment,” Mr Francis said.
Evidence to suggest that sustainable retail environments are becoming more attractive to consumers and potentially more profitable to retailers, includes:
- Research by the International Council of Shopping Centres suggests that lifestyle centres – connected sets of uncovered stores with pedestrianised walkways and greater connections with nature – perform better than conventional malls in terms of economics, with increased numbers of stores visited and higher numbers of repeat visits.
- American retailer Walmart developed a concept store in which only half of the store was daylit. It found that in those areas, sales per square foot were significantly higher.
- Research also suggests that customers are likely to buy more merchandise in stores with natural surroundings. When shown images of retail spaces, customers rate those with greenery as friendlier, say they would stay longer and visit more frequently, and report they would be willing to pay a higher price for the same product when pictured in a more natural setting.
A Framework for measuring health, wellbeing and productivity in retail
The report sets out the WGBCs Retail metrics Framework – three ways in which retailers can begin to understand how their spaces currently impact those within the building and the performance of the organisation.
- Environment – the physical features of the retail setting that may have an impact on consumers and employees – including air quality, thermal comfort, lighting and daylighting, noise, views and biophilia, interior layout, look and feel, active and inclusive design, amenities and community space.
- Experience – how employees and customers perceive the space they occupy, through surveys or perception studies.
- Economics – the organisational and financial outcomes that may be impacted by environment and experience. These include costs relating to employees such as absenteeism, staff retention, medical costs, medical complaints and building complaints; revenue relating to consumers including sales, footfall, dwell time, loyalty and distance travelled; and also company brand.