“The high street as we know it today will play a less important role in our towns in future”

If we want to know what will be important in the future, it’s not enough simply to re-examine the past. This best way is to have an extremely good feel for trends. Let’s take a trip into the future with Gabriele Volz, Managing Director of WealthCap.

IPH-Newsletter interview with Gabriele Volz, Managing Director of WealthCap.

Question: Ms Volz, you have been involved with a study looking at the sustainability of 30 German towns together with the Fraunhofer Institut in order to gain an exciting look into the future. The study is now published as the “DNA des Erfolges. Stadt der Zukunft 2040” (the DNA of success – the town of the future 2040). What was the motivation for the project?

Volz: As an investment and asset manager in the commercial, residential and retail property sector focussing on long-term sustainability, it is important for us to reflect the effects of mega trends such as increasing urbanization into our purchase decisions. In a highly developed country such as Germany, significantly more people live in towns than in the country, above all because more and more jobs are created in our towns and cities. The results are a shortage of residential space and a lack of supply of offices and retail space. We know that many towns are not sufficiently prepared for these challenges. Whilst the property sector attempts to create mixed-use districts integrating both residential and retail space, many building control offices require several years to grant approval for a new urban district, and then only as an acceptable compromise solution. We focus on the towns, but also particularly on the people. How will we live in future, how will we work and what will our consumer behaviour be like?

Question: When we speak of the future, we often talk about digitalization, which undeniably affects all aspects of our lives – even our shopping patterns. What does your study foresee in this regard?

Volz: The face of a town is its center. The risks of the digital transformation include the likelihood that shops, the high street and shopping centers as we know them today will play a less important role in our towns and urban districts in the future. The reason is firstly the shift of retail turnover to online shopping. Secondly it is often overlooked that online trade is not simply a competing sales channel compared to over-the-counter retail. The “Amazonization” of retail has meant a fundamental change in peoples’ expectations of what the retail sector must provide to its customers. This affects for example the way in which customers obtain information on what is available, how they compare products and pay for goods, and also what their requirements are in terms of availability and delivery.

Question: Would it not be a bad thing if over-the-counter retail continues to disappear?

Volz: Of course you’re right, the digitalization process is indeed a challenge, but I also see an opportunity here: online trade is able to alleviate traffic, as modern logistics technology is able to package and optimize delivery tours. There is now a revival of the old idea of city logistics, which had become uneconomic in the past. It is also conceivable that goods will be transported from a core distribution center located in the town center to the various urban districts, for example by the use of cycle couriers. I wouldn’t completely write off the high street shop quite yet.

Question: So you also see opportunities?

Volz: Of course. Despite the possible decline of retail in town centers in the meantime, there will always be shops which satisfy the requirements of their customer base and offer them a rewarding shopping experience. This can be achieved if shops offer an exciting retail experience or if they are in the position to offer customers what they require immediately. They will always have this advantage over online shops, and they will continue to contribute to a diverse cityscape.

Many thanks for the interview Ms Volz.