Will wifi in shopping centres kill physical retail?

Shopping centre owner Land Securities’ new wifi initiative, revealed last week, seemed like a controversial move on first sight.

The owner of centres including Cabot Circus in Bristol and Cardiff’s St David’s centre is to offer free wi-fi access to shoppers in its 22 centres. While this is obviously good news for customers, surely bricks and mortar retailers won’t stand to benefit?

Shoppers walking into stores, eyeing products then going online to see if they can get them cheaper elsewhere makes the high rents that retailers pay unsustainable. And it is arguably particularly galling for the retailer that its own landlord is providing the internet access – for free.

However, after a quick debate in the Retail Week office, we tried to come up with a list of retailers that would be badly affected. It would have to be retailers that sell big brands that can be bought online cheaply.

Electricals retailers spring to mind – but few of them have stores within shopping centres. Department stores could be affected too, although the main players are already so keen on price – often embarking on price wars with one another - that arguably online price comparisons should not have a dramatic affect.

Admittedly, HMV would be hit badly, but mainly in its music category, where much of its customer base has already gone online.

Many of the major players in shopping centres, such as fashion retailers TopShop and Superdry, rely on own brand product to a large degree, so the ability for their customers to compare prices online should not dent their sales.

Scores of other retailers are in the same position. Taking a look down the list of shops at one of Land Securities’ major developments, The White Rose Centre, retailers including Marks & Spencer, Ann Summers, H&M, New Look, Primark, River Island, The Body Shop, Zara and Clinton Cards would remain relatively unharmed by the initiative as they all offer a large amount of exclusive product.

As such, they would likely welcome Land Securities’ move, as improvements in customer service can only increase footfall to the centres. And let’s face it, consumers can already go online using their mobiles while out shopping, using 3G connection.

Even Boots, which sells a lot of branded goods, has welcomed the decision to implement wifi.

A Boots spokeswoman told Retail Week: “We know our customers already value being able to use the smart phone enabled boots.com site to check out product details and customer reviews on the go. We’ll be watching this latest development with interest to see if it encourages more customers to use these services while shopping.”

While Land Securities no doubt had to fight its corner with some of its tenants, its commercial director Ronan Faherty rightly points out: “We have got to get over ourselves and realise the internet isn’t going to be the end of the property industry. The two can co-exist and we’re got to start creating a seamless experience for customers.”

It is a refreshing view from an industry sometimes viewed as old fashioned and unwilling to move with the times.

Land Securities has thrown down the gauntlet. All eyes will be on its rivals – Hammerson, Westfield and Capital Shopping Centres – to see if they follow suit.