GLOBAL RETAIL TOURS: MILAN

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1 GLOBAL RETAIL TOURS: MILAN Fung Global Retail & Technology is publishing a series of Global Retail Tours, highlighting observations from our visits to major cities around the world. This report looks at retailing in Milan, specifically at the new shopping center Il Centro in Arese, Milan. Here are our top takeaways: 1) The shopping center focuses on national and international high-street brands and boasts the first Primark store in Italy. This is likely to attract many young budget- and fashion-conscious consumers to the mall. 2) The extensive choice of restaurants, cafés and fast-food joints in the center confirms that foodservice has become an important element of modern malls. 3) The artisanal feel conveyed by the Iper hypermarket shows how modern grocery retailing in Italy is experimenting with new formats that are moving away from the classic supermarket model and getting closer to the informal layout of the traditional small-town markets. DEBORAH WEINSWIG Managing Director, Fung Global Retail & Technology deborahweinswig@fung1937.com US: HK: CN:

2 GLOBAL RETAIL TOURS: MILAN Milan Key Facts 2015 Population Area 1.3 million (city) 3.2 million (metropolitan area) sq. km (70.18 sq. mi.) Source: Istat/Municipality of Milan Fung Global Retail & Technology is publishing a series of Global Retail Tours, highlighting observations from our visits to retailers in major cities around the world. Fung Global Retail & Technology is publishing a series of Global Retail Tours, highlighting observations from our visits to retailers in major cities around the world. This city briefing focuses on observations from our store visits in Milan, and in particular, the shopping center Il Centro in Arese, Milan. The center opened its doors on April 14, 2016 on the site of the former Alfa Romeo car factory, a few miles from Milan city center and very close to the exhibition area that Expo 2015 was held. Figure 1. Il Centro at a Glance The first Primark store in Italy. The store is bright and spacious, and features billboards that display the retailer s website and its social media presence. Pellizzari displays premium lifestyle brands, including Armani Jeans, Patrizia Pepe and Guess, but does not offer luxury brands. IL CENTRO SHOPPING CENTER HIGHLIGHTS Part of the regeneration project of the former Alfa Romeo manufacturing site. Built with particular attention to its environmental sustainability. 200 shops, 25 restaurants, 90,000 square meters, two floors. Conceived to convey a sense of community. A focus on high street brands. The first Primark and Lego stores in Italy. A strong foodservice offering. 2

3 In addition to shops and restaurants, the center offers services including sport facilities, a playground area for kids, a pet areas and a medical clinic. A PLACE TO SHOP AND SOCIALIZE The Il Centro shopping center, conceived by architect Michele De Lucchi, is designed to mimic a town center and to convey a sense of community. The mall features a network of squares, conceived as gathering spots, each with its own distinctive character. In addition to shops and restaurants, the center offers services including sport facilities, a playground area for kids, a pet area and a medical clinic. As a reminder of the manufacturing past of the area, a car test track and the Alfa Romeo Museum can be found near the shopping center site. Il Centro has been built with a particular attention to its impact on energy consumption and sustainability, and features a roof in Glulam glued laminated timber a material which has a much lower embodied energy than reinforced concrete and steel, and that has never been used before for the construction of a shopping mall. Inside the Mall and the Glulam Ceiling The shopping center features 200 shops and 25 restaurants over an area of 90,000 square meters on two floors. The mall is located at the center of a large catchment area, within easy reach from Milan, its northern hinterland and from southern Switzerland. The area is very well connected by roads and its car park can accommodate 6,000 vehicles. However, it is not easily reachable by public transport. Urban and suburban railway stations are located at least 2 km away from the mall, from where they are connected via suburban buses. There is a plan to introduce bus shuttle services from Milan city center. Il Centro is shaped like a crescent, with the larger retailers outlets H&M, Zara and Primark at one end and the food court and hypermarket area at the other. 3

4 Ground Floor and First Floor Map Source: centroilcentro The aim to recreate a sense of community is at the core of the developers concept. The mall is dotted with squares and lounge areas with benches and chairs, offering shoppers a place to sit and rest their legs and to socialize with fellow shoppers. These areas are meant to convey the feeling of a town center and to encourage socialization with the aim of recreating a sense of community, which is at the core of the developers concept. Squares and Lounges are Placed Throughout the Mall 4

5 There is a small exhibition of vintage Alfa Romeo cars in the mall, as a reminder of the site s manufacturing past. Display of Alfa Romeo Cars The shopping center features the first Lego Store and the first Primark store in Italy. A FOCUS ON HIGH-STREET BRANDS The shopping center focuses on international and domestic high-street brands. The international brands found in the mall include H&M, Victoria s Secret, Mango, Disegual, Accessorize, Tiger, Mac, Sephora and the Inditex brands Zara, Zara Home, Pull & Bear, Bershka, Massimo Dutti and Stradivarius. Il Centro features the first Lego Store and the first Primark store in Italy. The Primark outlet is in the main area at the left end of the shopping mall and occupies two floors. The store is one of the main attractions of the mall, or anchor tenant. We noticed there were fences at the entrance to direct the queue, as the store gets very busy during the day. Primark Store Entrance The escalator within the Primark store shows the city map in this case Milan which we can find in other flagship stores, such as the one in Oxford Street in London. 5

6 Primark Store Interior There are many domestic brands stores in the shopping center. Walking around the mall, we encountered budget fashion retailers OVS, Pimkie and Terranova, underwear retailers Tezenis, Intimissimi and Calzedonia, and Color Cosmetic Retailer Kiko Milano. Despite being a stone s throw from Italy s fashion capital, Il Centro does not cater to highend shoppers, and luxury brands have no space in the mall. Domestic Brands at Il Centro Despite being a stone s throw from Italy s fashion capital, Il Centro does not cater to high-end shoppers, and luxury brands have no space in the mall. There is only one department store inside the mall, Pellizzari, which has concessions of premium lifestyle brands including Armani Jeans, Patrizia Pepe and Guess. 6

7 NO SHORTAGE OF PLACES TO EAT The main food court is at the right end of the mall, in a large square occupying two floors. The square on the ground floor features classic outlets that can be found in any Italian town square: a bar, newsagent, florist and an ice cream parlor. On the top floor, there are restaurants offering Italian regional cuisines and more casual eateries such as fast-food eateries including KFC one of just six outlets of the chain in Italy and McDonalds. The Food Court Foodservice outlets can be found throughout the shopping center. In particular, within proximity of each square area it is possible to find coffee bars, pizza parlors, bakeries and restaurants. The first concessions that shoppers encounter are a juice bar, a bakery and an area that is reminiscent of an open food market. A HYPERMARKET WITH AN ARTISANAL FEEL Facing the ground floor of the food court is an outlet of the Italian hypermarket group Iper. The entrance of the store blends in with the traditional town square atmosphere of the food court. The first concessions shoppers encounter are a juice bar, a bakery and an area that is reminiscent of an open food market with a plethora of cheese, cured ham and fresh fruits and vegetables. The structure of the hypermarket then proceeds with the classic aisle and checkout areas. 7

8 The Entrance of the Hypermarket READY TO PROVIDE A MULTICHANNEL EXPERIENCE Il Centro facilitates a multi-channel shopping experience. Free wi-fi is available in the mall, to encourage consumers to use their smartphones to enhance the shopping experience. Given that many shoppers tend to spend the whole day in the mall, the modern necessity of being able to recharge the smartphone battery is met, thanks to the presence of charging stations in various locations, particularly around the seating in the town square areas and at the foodservice outlets. Charging Stations can be Found Inside the Shopping Center The extent of the multichannel experience offered at Il Centro also depends largely on the efforts of the individual stores. 8

9 Throughout the mall, shoppers can find touchscreens with an interactive map to guide them in their shopping journey. The extent of the multichannel experience offered at Il Centro also depends largely on the efforts of the individual stores. Primark features billboards in its store that display its website and its social media presence, in a bid to encourage shoppers to interact digitally with Primark even though this retailer does not sell online. Budget fashion retailer OVS uses multi-channel extensively in-store. In spring 2014, OVS opened a concept store in Milan city center, which offers shoppers a digital shopping experience including free wi-fi, click-andcollect and interactive screens throughout the store and encourages the use of the OVS app, which allows the shopper to browse online, scan a barcode that identifies an item that can be ordered online in a size that is no longer available in-store. This also enables OVS to use a proximity marketing technology, called OVS Connection Message, which sends messages to the customers phone through the app when they are in the proximity of the store, inviting them to visit the outlet. This package of instore technology is called the OVS Digital Experience, and it has been developed in collaboration with Google Enterprise. The Arese store also encourages the use of the OVS app to complement the range available in the outlet with what can be found on its online store. OVS Store Entrance Primark is expected to continue to be the main attraction of the mall. 9

10 FUNG GLOBAL RETAIL & TECHNOLOGY VERDICT The opening of Il Centro was a great success, with 100,000 visitors on May 16, 2016, the first Saturday of trading. However, we expect this will not be the typical, year-round footfall, as many people that were visiting during the early days since the opening were attracted by the curiosity of seeing the regeneration of the area and the structure of the mall. Primark is expected to continue to be the main attraction of the mall. This is the first outlet for the retailer in Italy. The store has attracted a lot of attention, as many Italian consumers are aware of the brand from encounters with it during trips to London. The opening in Italy was long awaited by consumers. The other shops that target a clientele of young fashion- and budgetconscious consumers are expected to gain from the footfall driven by Primark. The shopping center caters in particular for shoppers looking to buy high-street brands. Il Centro is part of a regeneration effort of the area, and some shoppers may be attracted to visit the mall in combination with a visit to the Alfa Romeo museum and the racetrack. There is another opening of a new shopping center, Scalo Milano, in an area south of Milan, occupying a 43,400 square meter area with 200 outlets and a focus on fashion and food that is expected to open later in autumn This new shopping center is likely to cater to a more upmarket clientele, geographically based south of Milan. However, the new mall will be better connected to central Milan, thanks to suburban train lines already in operation, and as such, it is likely it will be easier for shoppers based in central Milan or for tourists visiting the city to go shopping there rather than at the Arese mall. We think that the lack of direct public transport connections from Milan city center to Il Centro is likely to be the main hindrance to footfall. While it is already possible to reach the mall via public transport, it is quite inconvenient, and no direct connection from Milan is available. Shuttle buses from central Milan are planned, but not yet in operation, as at September The mall caters in particular to younger and budget-conscious shoppers, with stores such as Primark, and this consumer segment includes individuals too young to drive. A direct public transport link from Milan city center will be highly beneficial for the long-term success of the shopping center. 10

11 OTHER SHOPPING DESTINATIONS IN MILAN CITY CENTER There are many shopping hotspots in Milan city center, including: Corso Vittorio Emanuele: High-street names and premium lifestyle brands. La Rinascente, a premium department store, can be found here. Via Torino: High-street brands, particularly aimed at young, budgetand fashion-conscious consumers. Corso Buenos Aires: High-street brands, especially those aimed at young, budget- and fashion-conscious consumers. Via Montenapoleone: A shopping street with luxury and high-end brands. Corso Vercelli: Boasts premium lifestyle brands. A View of Corso Vercelli 11

12 Deborah Weinswig, CPA Managing Director Fung Global Retail & Technology New York: Hong Kong: China: Filippo Battaini Research Associate HONG KONG: 8 th Floor, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong Tel: LONDON: Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0) NEW YORK: 1359 Broadway, 9 th Floor New York, NY Tel: FungGlobalRetailTech.com 12