The news media tells us Amazon is disrupting the retail industry causing stores to close. Retail is evolving, and it is not all negative.
Below are five trends and predictions in the retail industry.
Who wants to shop at the mall?
Our regional mall that opened over thirty years ago at the time consisted of 150 stores including Emporium-Capwells, JCPenney, Sears, and Mervyns. A cinema and video arcade were the entertainment.
Class ‘A’ type malls are evolving to more of an entertainment and lifestyle center adding more experiences and venues.
Other alternatives exist for Class ‘B’ or ‘C’ type malls that are not conducive to revitalization. Some may transition into space for a community college, church, grocery store, or multi-family residential. There is the option for tearing down and redeveloping.
Meet the pop-up store
A pop-up store is a retailer who opens a small store in a high-traffic area such as a mall or downtown business district for a short time usually at a reduced rent.
These quick and easy storefronts, just temporarily pieced-together, give a retailer an opportunity to connect with customers, test a market, and build awareness.
Many usually drive sales during specific seasons, and it works well with online retailers or those considering moving into a new market.
Mixing it all up with mixed-use
A growing trend is living, working, shopping, entertaining and dining all in the “town square” within walking distance of each other.
Unlike the suburbs where destinations are broad the mixed-use concept is localized and has a higher percentage of food, entertainment, and lifestyle experiences with less dedicated to retail.
These locations are higher density with a smaller geographic footprint and require the businesses to redevelop their concepts to fit a smaller space.
What is omnichannel retail?
Omnichannel retail is a comprehensive and balanced approach to a customer’s experience at every point of contact. Think of it as a melding between the online store, physical store, social media, mobile, in-store interaction, and at-home delivery.
This strategy for retailers and restaurants is in its infancy as they learn how all the elements interact to create a cohesive experience.
Many retailers thought there was no relationship between online and brick-and-mortar stores, but are now changing the way they model their customer interaction. Online and physical storefronts, in fact, are complementary.
The big unknown is looking at the many ways the consumer buys their goods or visits a restaurant. Tracking our buying habits is where big data comes in and the potential eroding of our privacy all for the convenience of the consumer.
“Give me an experience”
Brick-and-mortar stores are not going anywhere. Just as the regional mall is evolving so is the retail store and restaurant as they reimagine the experience.
The customer looks to the store for more than just a place to purchase goods but rather for an immersive experience which includes classes, demonstrations, and events to all push the lifestyle.
Restaurants are finding the need to innovate to compete and draw in the consumer as they vie for the next experience to tell their friends about on social media.
Burt M. Polson, CCIM, is an active commercial real estate broker. Reach him at 707-254-8000, or [email protected] Sign up for his email newsletter at BurtPolson.com.