Polish shopping malls stand proud despite threat posed by online retail

Shopping centres are now the leading destination for Polish shoppers. Jakub Kamiński /PAP

With Christmas just a week or so away people by the million are indulging in a buying frenzy that may well bring tears of joy to retailers across the country.

Just how and where people are spending their hard earned złoty, however, is changing fast. Not so long ago Poles had to buy in local shops that offered little in the way of choice. Then came the shopping malls, bringing with them an abundance of roofed-over shops piled high with choice and selection. Now the malls, so long a dominant force, have to contend with the challenge laid down by up-start e-commerce. The logic being that people will rebuff the polished-stone allure of malls for the ease and comfort of shopping online.

But if anybody thought buying online would bring the once-proud malls to their knees, they should think again because Polish shopping habits, it seems, are somewhat distinct.

Hadley Dean has around 20 years’ experience in Polish retail. EPP

“It’s not that Poland is fundamentally different to the rest of the world but what is happening here is that you have very, very different dynamics to e-commerce,” says Hadley Dean. CEO of EPP, a company with EUR 2.6 billion in commercial real estate assets in Poland, Dean has been part of Poland’s evolving retail scene for close to 20 years, and so is something of an expert.

“When you speak to retailers, what they are saying is that is that online platforms are actually boosting their bricks and mortars performance,” he continues. “Roughly 70 percent of online sales are actually click-and-collect, so that means people coming into the stores, and picking it up. Now that is lot higher than in Western Europe and the States.”

Dean points to a number of reasons as to why Poles click-and-collect more than their shopping peers elsewhere in the world.

The popularity of living in flats is one reason e-commerce has failed to dent the popularity of physical shops. Piotr Augustyniak/PAP

The first one is a “lack of a doorstep environment”. What this means is that blocks of flats set in a dense urban environment remain steadfastly popular in Poland with many people preferring flats to out-of-town, and doorstep equipped, houses. Delivering in these densely packed urban environments, says Dean, is an “absolute nightmare” with delivery firms having to contend with gaining entrance to blocks, challenging flights of stairs and finding somewhere to park.

Another factor is that 70 percent of shopping in Poland is now carried out in shopping malls. The go-to destination for all things retail, and boasting ever-more extensive eating and entertainment options, malls are easily accessible so collecting after some clicking is easy and can be just part of a trip to a mall.

“Going to mall is becoming much more of a leisure activity where you meets friends and family,” explains Dean. “More and more people are stopping for a meal. It is how they spend their leisure time.”

“Going to mall is becoming much more of a leisure activity where you meets friends and family,” explains Dean. Leszek Wdowiński/PAP

Now on top of this come some other factors.

The average basket for online retailers in Germany, explains Dean, is about EUR 20 while in Poland it is about half that.  . “Now the problem is that logistics costs here are about 85 percent of what they are in Germany. So if you’re selling something for EUR 10 you don’t want to have to spend EUR 2 to have it delivered to an apartment block, where, very often, the people are out so you have to go back two or three times.

“So the retailers are massively pushing click-and-collect. If you go online that is what they are pushing.”

Roughly 70 percent of online sales are actually click-and-collect, so that means people coming into the stores. Grzegorz Michałowski/PAP

Basket values in Poland will increase as people get wealthier but this will take time, so for the moment collecting at the shop remains the preferred policy.

Another aspect that will change eventually but for the time being keeps people coming into shops, says Dean, is little faith in online security when comes to payments. Various financial scandals have fuelled suspicion of the dangers of spending cash over the internet so when buying products Poles prefer to order online but collect and pay at a shop. This also gives the buyer the chance to give their purchase the once-over to make sure it is what they ordered and it has no defects.