The retail landscape is constantly evolving. While some will declare that the internet has killed retail, it has actually just sped up the evolutionary process and created new opportunities for brick and mortar retailers. Developers who wish to succeed in the new landscape will need to take note of these emerging trends so they can attract desirable retailers and customers.
Future retail centers will depend more on time than space. This means that the list of available retailers will be constantly changing and urging customers to get to the mall “now” instead of next week. This has already started happening. Some retail centers in Manhattan will change their design and rotate their tenants every month or two. The idea is to create a constantly changing storefront that will keep customers engaged and interested in what retailers have to offer.
Back to the City
The continuing trend of migration toward urban centers and nearby suburbs will be another influential trend that developers need to consider. As both young professionals and baby boomers are increasingly attracted to urban life, developers will see inner cities accounting for approximately 40% of the total increase in U.S. purchasing power between 2000 and 2045.
Ethnic and racial diversity will also play a significant role in retail development. As Hispanic, Asian and African American populations accumulate buying power, developers will need to figure out how and where these consumers shop. For example, in some cultures, it is customary to bring the entire family along for shopping trips. Retail developers will need to adapt to this change by including more entertainment, dining and recreational options.
Most experts agree that the amount of selling space will shrink in the near future. This is because improved shipping capabilities have lessened the need for stores to keep multiple versions of the same item stocked on the sales floor. For example, some stores have started keeping only one version of an item on the sales floor and allowing shoppers to scan the tags with a smartphone app and dispensing the item they selected into a dressing room. You can also scan your digital cart at the checkout or send items back to the stockroom by dropping them into a chute.
The idea that every style, color and version of a product should be cash and carry seems to be evolving. This allows developers to reorganize their retail space and reduce the amount of floor space that is taken up by the product.
In order to draw in customers, retail centers will need to create some kind of entertainment for their shoppers. Think about it this way, if customers can order online and receive their product the next day, why would they visit a physical store? The idea is to create a compelling experience that they can’t get online. For different retailers, this will mean different things. Maybe you hire performers to give product demonstrations, create artful displays or provide a play area for children.
Consider Las Vegas shopping centers. Whether it is dancing fountains, intriguing light shows or exciting performances, the hotels and shopping centers on the Las Vegas strip do a great job of getting people to slow down and crowd around.
Creating Consumer Experience
In order to face growing competition and an increasingly savvy customer base, retail developers will need to create a compelling experience in order to compete with online shopping and overnight delivery services. The key is in how you respond to the changing needs and desires of the consumer.
Originally from Dimetree Real Estate Services