Home / Insights / Hyperlocal Economies and Their Impact on Traditional Australian Shopping Centres: Post-COVID Evolution Hyperlocal Economies and Their Impact on Traditional Australian Shopping Centres: Post-COVID Evolution October 9, 2024 - Commercial Property Insights, Shopping Centre Analysis The COVID-19 pandemic triggered a profound disruption across all business sectors, accelerating dormant market trends and exposing the vulnerabilities of traditional retail models. In this evolving economic landscape, the retail industry has witnessed remarkable adaptation, particularly in the transformation of shopping centres and the rise of town centres as a compelling alternative to the large-scale shopping centre model. Key Forces Driving the Shift Towards Town Centres This updated blog explores four key forces that continue to drive the shift towards town centres post-COVID:1. Hyperlocal retail economies2. Digital economies and online shopping3. The evolution of traditional anchors4. The rise of hybrid work modelsThese factors are reshaping the future of retail in Australia, redefining how consumers interact with shopping spaces, and pushing traditional shopping centres to adapt or risk becoming obsolete. The rise of online shopping, which accelerated during COVID-19, has stabilised in the post-pandemic era. The graph above shows the trend of online sales spiking during the pandemic but stabilising at around 18% of total retail sales.Several factors attribute to this stabilisation, including distribution challenges in online fulfilment, a resurgence of social interaction among Gen Z and Millennials who enjoy shopping centre experiences, and Gen X and Baby Boomers’ preference for traditional in-store shopping. The impact of the pandemic on CBD pedestrian traffic remains evident today. Recent data from Melbourne’s Collins Street shows that pedestrian traffic levels have not fully recovered to their pre-pandemic highs. As highlighted in the graph, the foot traffic on Mondays and Fridays in Sydney and Melbourne is still up to 50% below pre-pandemic levels. This trend underscores the shift towards hyperlocal economies and the growing appeal of town centres as more adaptable and community-focused alternatives. Conclusion The shifts in consumer behaviour and work patterns during the COVID-19 pandemic have left a lasting impact on the retail landscape. Hyperlocal economies, the rise of digital retail, and the demand for flexible workspaces have transformed town centres into essential community hubs that offer a unique blend of retail, leisure, and work opportunities.As traditional shopping centres face challenges in adapting to these changes, town centres are emerging as resilient and versatile alternatives. By embracing these trends and reimagining their spaces to include multi-functional uses, town centres have positioned themselves at the forefront of modern retail and community engagement.Moving forward, the success of shopping centres will depend on their ability to integrate hyperlocal strategies, innovate in e-commerce, and foster a sense of community. As the retail sector continues to evolve in the post-COVID era, those businesses who can adapt to these changes will create sustainable, community-focused environments that resonate with consumers and redefine the future of shopping in Australia.Source: FLNT