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PropTech and the Cashless Revolution Will Revive Urban Retail and Real Estate

Question: What’s wrong with retail?

According to retailers, the customer.

The problem is, no one is buying that answer.

But people are sold on internet retail. Thanks to its convenience,  low prices and wide range of choices, people are buying more than ever before on the internet. For many stores, venues and the proprietors of brick-and-mortar retail real estate this means hard times. Customers are not showing up. It would be easy to believe the ship has left the dock and that the end is near, but there might be hope yet.

Once merchants were the ones leading the change on where we go to buy, eat and meet. From market stalls to city center stores, then malls far from main street, the shifts were evolutionary. What changed was retail location. No matter the geography, it stayed face-to-face; for centuries there has been barely any change to methods of trading and selling. Today, chain-retailer evolution is threatened by a shoppers’ revolution: it is confrontation without crowds, few people and on empty streets.

And just as they are struggling to adapt, along comes cashless.

With the prospect of even more change ahead, it is understandable why some see customer present cash-free payments as another threat. Armies of lobbyists and lawyers are being raised. “Cashless means social exclusion,” or “society and communities stand to suffer,” or “paper money is safer, cashless lowers payment and personal security,” the pundits say. Legislation has even been passed in New Jersey and Philadelphia banning fully cashless businesses entirely. Lawmakers in New York, Washington and San Francisco are considering doing the same.

This is a mistake. The problem is not with cashless but how cashfree is provided, integrated and implemented for guests. Combined correctly, this technology is the solution, and provides a better experience for merchant and customer alike.

Across the globe, what some brand as financially and socially exclusive is precisely what is improving security, financial and social inclusion, while strengthening retailers and realtors. By 2020, mobile payments in China are projected to become a $45 trillion industry. Cashless transactions totalled $12.8 trillion from January to October 2017, compared to just $49.3 billion in the United States.

Even prisoners in China are utilizing mobile payments, which help to reduce petty crime and violence in prisons. Everyone from panhandlers to night market merchants benefit from the safety of cashless payments, and no longer worry about counterfeit currency.

Studies have proven time and again that cashless means higher personal security. People who carry less cash venture out more, retailers enjoy increased financial protection with less banknotes onsite, the number of women-owned businesses grows. In short, there’s more gender equality, more financial and social inclusion and more retail spending means more and more retailers’ and realtors’ rent paid.

Launched in 2018, Manifesto is the first fully cashless retail space in the Czech Republic. Image credit: Jakub Cervenka

Urban revival is my company’s business. At Manifesto Markets we are using PropTech to fuse cashless payments with physical retail environments and bridge the divide between analog and digital experiences. We launched in 2018 by creating and operating the first fully cashless retail space in Prague–indeed, in the entire Czech Republic. More than 650,000 visitors (equal to half the city population) joined us in the space of six months. When we won the MasterCard Retailer of the Year award for Best Customer Experience we knew we were on to something really important. Now, thanks to growth equity investment from e-commerce PE investor Rockaway Capital, a major international expansion is underway, with new sites planned across Europe and Asia over the next five years.

We are a popup retail real estate developer. We build temporary gastro and retail locations in unused urban spaces—bringing people back to urban areas they had deserted, and that some had felt less safe to visit carrying money. No-one needs to bring cash unless they want to. Those who do are equally included (through customer top-up cards charged in seconds) leading to everyone gaining from an integrated, cashless, physical retail experience.

Once we are done with a space we don’t just return it to being forgotten. In fact, we do the opposite: we find sites earmarked for future, lasting redevelopment, so we can help re-introduce them to the neighborhood and business community alike.

We believe that combining both cashless and physical retail will disrupt existing, dying brick-and-mortar retail models and are encouraging both customers and merchants to adopt a cashless system. Through PropTech, the retail real estate can keep up with the changing societal trends, like the shift to a cashless society. The industry needs to choose if they are onboard with this change. Making a choice is optional. But, then again, survival isn’t mandatory.

Cover image credit: Alexandra Siebenthal

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