Interview: International trends in Vienna’s Inner City
Ms. Dubreu, the difficult situation for the retail trade has apparently not touched the luxury segment. Given the global economic uncertainty, do you see any potential effects on the European luxury market? The luxury market has been very stable until recently, and this stability is reflec- ted in constant or even slightly higher rents. However, the global economic uncertainty, especially the weakness currently visible in China, leads us to the question if and how this development will influence the European luxury market. We continue to see strong demand for luxury space in top European locations, especially from the established internati- onal luxury brands. How would you rank Vienna as a retail destination for the top segment in global and, above all, in European comparison? What are the city’s strengths and weak- nesses? Which other metropolises are Vienna’s competitors, for example in the same league? Vienna has always been on the “wish list“ of many international brands. Especi- ally on my visits in the Inner City, I am impressed by the high visitor frequency. Here, Vienna plays in the same league with other leading cities like Rome, Milan, Barcelona and Munich. Vienna has a great selection of hotels in every segment as well as a rich cultural offering. Howe- ver, the high visitor frequency is heavily influenced by tourists, and this can be seen as both a strength and potential weakness. In spite of this touristic focus,
Vienna continues to attract new inter- national investors and brands due to its economic vitality – and the urban revitalisation plan will strengthen the retail market. Another strong indicator for Vienna‘s at- tractiveness is its purchasing power: Aus- tria ranks fourth in the EU-27 comparison of purchasing power, which additionally underscores the city’s strong position as a retail destination in Europe. You regularly analyse the global trends that influence the world’s leading retail locations. Do you see any international developments that could significantly change Vienna’s standing as a destinati- on in the coming years? One important international development is the growing physical presence of lea- ding e-commerce brands. We see these companies opening more and more brick and mortar outlets as a way to test new markets, and this could possibly lead to more flexible models for rental contracts. A further trend that could also become important for Vienna is the appearance of new concepts like second hand and sustainable consumption. How do you see the development of retail space for top and luxury brands in the coming years: Will flagship stores still be attractive? Will the growing demand for space come primarily from establis- hed labels or will new brands enter the market? Here I see parallel developments in all
three areas. On the one hand, well-known luxury brands are using their flagship sto- res to strengthen their market positions. On the other hand, we also see new brands using flagship stores to increase their recognition. One good example is Tesla, which has substantially expanded its brand recognition through its stores. Brands like Zara and Uniqlo also see their outlets as important advertising vehicles, whereby the shop windows serve as the central means of communication with their target groups. One more trend is perfect multi-channel- ling as practiced by brands like Polène, which rely on both an online presence and flagship stores at top locations. These flagship stores must not necessa- rily be large – the more important factor is that they create an experience which emotionally connects the brand and the customer. Flagship stores will remain an integral part of the retail trade as long as they offer consumers added value and support the authenticity of the brand. I see an exciting development in the increasing integration of community and experien- ce concepts. For example: Brands like Coach New York have introduced “play shophouses“ or café concepts, and others like NIO and Lynk&Co are integ- rating co-working spaces in their stores that create meeting points and social spaces for their communities.
Nathalie Dubreu
European Retail Leasing Coordination Senior Director BNP Paribas Real Estate
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