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Check out this explanation of how Retail continues to grow.. in a good way!
The Retail Strategy Switches
In this day of experiential retail, the draw of the shopping center is no longer the store itself. Consumers are coming, but not necessarily just to shop.
LAS VEGAS—Arguably, nowhere is the overworked phrase “retail experience” more evident than in malls and shopping centers. As Crystal Allen, Transwestern’s SVP of retail services, indicates, the old shopping magnets have switched.
“Over the past five to 10 years,” she tells GlobeSt.com, “the mix has changed dramatically.” As enticements to stay longer, landlords are starting to lead with the former minority players—the restaurants and entertainment. “Traditionally, 75% of the mix was soft goods,” says Allen. “Now restaurants and entertainment can take up as much as 50%.”
[Editor’s note: a video interview is also available at the end of this article.]
As often as not, where shoppers would once come first to shop and then maybe grab a bite, now, Allen says, they are as likely to come first for that bite or that movie, and then possibly pick up an item or two.
In addition to this reversal of purpose, she adds there is also a switch from national to local in terms of inventory. “We’re seeing more of a concentration on unique, handmade goods as opposed to national brands,” she notes. “As a result, there’s more of a customer-service feel to the shopping experience today.”
Driving it all, of course, is technology, and the growing ability to tap into the wants and needs of the local market. And, despite what often seems as too-narrow a focus on millennials, Allen is quick to point out that boomers aren’t left out in the cold.
“It’s not really all about millennials,” Allen suggests. “But it is about technology, and millennials have simply had it all their lives,” unlike the generation before them. So while millennials might be more naturally comfortable with shopping apps and promotional alerts on their phones, boomers too are getting the hang of new methods of shopping.
In fact, research indicates that many of the top 10 e-tailers are actually older, established brands—such as Nordstrom and Home Depot—that have been able to marry the in-store experience with online convenience. It’s a matter of adaptation, and customers adapt along with their favorite brands.
Then what of those traditional brands that fueled a lot of the doom-and-gloom headlines of the past 18 months? “They waited too long to change,” Allen says. “They couldn’t keep up or waited too long to develop omni-channel strategies.”
And that is key, says Allen, as a response to the way people shop today. “They check out stores online before they visit,” even though they still tend to make their final purchases in-store. “Online is still less than 10% of sales,” a dynamic that underscores the importance of a strong omni-channel approach.
Despite the above-mentioned headlines, retail today is strong, says Allen, different, but strong. “Everyone is changing,” she concludes, “But the sky isn’t falling.”