Exclusive interview with Marin Šimić, Center Manager at City Center one East Zagreb, about how one of the leading real estate investment and management companies in Croatia CC Real is staying strong.
For the introduction, please give us an overview of your company and retail projects, as well as a few words about your position within the company.
CC Real is a real estate investment and management company. Today, it is a group that operates on three continents, but its story started in Croatia with three large Greenfield projects – City Center one Zagreb West, City Center Zagreb East, and City Center Split. These three shopping centers alone generated in 2019 more than 500 million Euros in turnover and attracted over 20 million visitors.
In addition to acting as an investor, CC Real has been managing these three shopping centers in Croatia since day one, and this year the company added to its management portfolio the largest shopping center in the Croatian Istria region – Max City in Pula.
Besides Croatia, CC Real manages three shopping centers in Austria (Center West in Graz, Millennium City and Wien Mitte in Vienna), as well as an ITIS shopping center in the Finnish capital. In cooperation with local partners, CC Real is also expanding its business to the USA and Australia.
I joined the CC Real team over 5 years ago as a Center Manager for City Center one East. It is a shopping center in the east of Zagreb, which has about 150 retail, service, and catering units, as well as a state-of-the-art multiplex cinema with 7 halls, a slot machine club, and a children’s playground. My main task is to make the shopping center function flawlessly every day.
How are your malls tackling the challenges of the pandemic and what strategies are you now implementing to drive in visitors and to support tenants? Have you introduced any innovations within your malls?
What makes us extremely happy at CC Real is the fact that none of our tenants closed down their stores in our malls due to the consequences of the Covid-19 pandemic. This shows that we responded in a timely manner to the challenges that the pandemic brought with it and, through a good collaboration with our tenants, found a model that enabled them to overcome the crisis and continue with a stable business in our malls.
We give an individual approach to our tenants because the crisis has not affected everyone equally nor could the same measures be applied to each tenant. Since the beginning of the pandemic, it has been important for our visitors to shop in a safe and reliable environment, so we have made great efforts not only to meet mandatory anti-epidemic measures but also to take additional steps to guarantee a high level of safety.
City Center one shopping centers are the first in Croatia to receive the Covid-19 Compliant Award given by the independent Swedish company SAFE Asset Group. This is a confirmation that the centers operate in accordance with the highest international standards and guidelines of the World Health Organization.
Have you had any new store openings within your malls and do you have any future openings planned?
Our shopping malls are either fully or almost completely leased, with some tenant changes that are common for shopping malls. At City Center one East, we opened Shoetique that offers luxury sports brands. City Center one West is richer with brands Mona and Triumph, while City Center one Split has rounded off its offer with a unique indoor market concept called City Pazar. Pula’s Max City has welcomed multi-brand store XYZ, Tvornica Zdrave Hrane, ZOO City, and pizzeria Maximilijan.
Certain brands have used the past period to redecorate, increase and modernize their retail spaces, such as C&A, Adidas, Mass, and others.
We have turned our shopping centers into some of the most desirable locations for brands that are just entering the Croatian market, as well as for brands that are already present in the country. We are therefore lucky to be picky when it comes to choosing brands as we strive to provide our visitors with a good mix of tenants and an optimal shopping experience.
What retail categories are now performing the best in your malls and why?
Since the beginning of the pandemic, the food, health, and cosmetics categories have had excellent sales results, and some even exceeded pre-pandemic figures. Sports equipment, clothing, footwear, electronics, and home goods, also ranked very well.
Taking into account that the way of life has changed greatly since the early spring of 2020 and people have mostly stayed at home or in nature, it was logical to see a decline in the fashion category. Gastronomy operators also had lower sales due to the pandemic restrictions that still continue.
In your opinion, how has the pandemic affected the retail market, consumer behavior, and shopping centers? What changes do shopping centers now need to make in order to stay ahead?
The pandemic has shown that absolutely anything is possible and that the unexpected should be expected at all times. It has also shown that the retail market is flexible to make quick adjustments to circumstances in order to preserve its customer base and stable business.
Numerous retailers have adapted their product assortments to stay competitive, and have tried to stay relevant and present through creative marketing.
Fortunately, most of them succeeded in their efforts. It is clear that web stores took ‘a piece of the cake’ as the conditions were such that even the consumers who were not previously inclined to shop online, decided to adapt to new shopping habits. Visitors went to shopping malls less often, but spent more on a single trip – this is why there was no significant drop in revenue.
Purchases were planned, with few impulsive buys. It was and still is extremely important that the malls have extremely high hygienic standards so visitors can feel comfortable and safe. The pandemic has turned the whole world upside down and forced people to make numerous changes. But it is evident that customers are striving for the ‘old normal’ and that, as far as circumstances allow, they are behaving as in pre-pandemic times.
Shopping malls need to monitor consumer habits, changes in customer interests, new trends at both the macro and micro levels, and respond quickly and proactively to offer visitors exactly what they need.
Greater emphasis should be placed on the individual experience and to think of ways to facilitate, beautify and enrich the shopping experience for each visitor. In addition to visitor focus, shopping malls need to anticipate changes in retail and related industries and find ways to combine online and offline shopping experiences.
Since the beginning of the pandemic, what forms of marketing do you use and what strategy is the most successful for your company at this moment?
Even at a time when shopping malls were almost completely closed, we didn’t stop communicating with our visitors. We adjusted the communication, it was important for us to stay present and relevant, to be at service, to try to beautify the gloomy everyday life, and to look optimistically into the future.
We were limited in terms of organizing events, but with our presence through social networks, always up-to-date website, and direct mail communication, we overcame the period when everything except the necessary shops had to be closed.
After a certain easing of epidemiological measures, through the Safe Shopping and Back to Shopping campaigns, we attracted numerous visitors and provided tenants with the opportunity to recoup a portion of the traffic. And while we still have some limitations, our marketing activities remain diverse and original. Sales activities that attract large numbers of visitors are led by our well-known Yellow Wednesday event which has been turned into Yellow Week on several occasions since the start of the pandemic.
With our City Street Art project, we connected with the local community and delighted our neighbors with original huge murals in the neighborhoods. We are proud of our humanitarian activities and ecological projects that affect the well-being of the community in which we operate. We generously rewarded visitors in various competitions and prize games. The carnival and street art festival delighted our youngest visitors. We also printed the 50th-anniversary issue of our quarterly City one magazine and launched two new comprehensive image campaigns.
Although the marketing plan for 2020 was completely different, during the pandemic we did not give in to the circumstances but tried to manage the crisis and get the most out of every activity we did.
What is next for your malls and company?
In the real estate market, not only in Croatia but also in the surrounding countries, there is room for quality companies that improve real estate projects through professional management and the ability to generate a stable income for the owners. This is where CC Real sees its opportunity for expansion and new management acquisitions, not only of shopping centers but also of office, residential, warehouse, and mixed-use spaces. Behind us are exceptional results and more than 15 years of experience, and in front of us, we are convinced, new projects and new successes
How do you see the future of retail in general?
The future of the retail industry lies in an individual approach to shoppers. Although the world population is growing, various technologies, especially those related to the online world, have brought the possibility of personalizing the shopping experience, and I would say that such an approach will continue to develop in the future.
We cannot view shoppers as a uniform mass or divide them into several target groups but we must think of ways to offer them a shopping experience created exactly according to their personal needs, desires, and budgets, at all times. It will not be easy nor will it be possible to achieve it quickly, but I believe that the best results will be achieved with this approach.