on May 31, 2017
Six Trends in Retail and How to Respond
We read about it every day: shopping malls are dying, department stores are closing, specialty retailers are declaring bankruptcy, small businesses are being “forced” out of traditional main street locations. For HR&A and our clients, changing conditions in the retail environment provide an opportunity to take failing, traditional retail models and redefine the asset class to once again become economically sustainable.
- Then: Brick and Mortar stores
Now: Growth of E-CommerceWhat to Do: While under 10% of retail sales are generated online, e-commerce is growing. Despite this fact, the popularity of experiential retail is increasing rapidly and includes such categories as dining, spas, fitness, services, and products that require a trip to the store such as furniture and home furnishing stores. Focusing on these types of uses is essential to creating an attractive tenant mix.
- Then: Single-Purpose Shopping Centers
Now: Mixed-Use DevelopmentWhat to Do: Reconfigure properties and enter into development partnerships to reduce overall vacancies, revitalize the retail offerings, and ensure that the property is attracting a wide range of customers.
- Then: Department Stores Anchors
Now: Key Anchor ClosuresWhat to Do: Reposition and re-tenant the property by breaking up the large spaces into smaller units, which will allow the asset to offer a diverse mix of retail-types and price points to cater to a broader audience.
- Then: Suburbs as Shopping Destinations
Now: Urban Main Street ExperiencesWhat to Do: Create multiple experiences for customers including cultural anchors, residential, hotel and office uses, as well as restaurant clusters with outdoor dining.
- Then: Homogeneous Communities
Now: Diverse DemographicsWhat to Do: Ensure that retail and restaurant uses reflect the lifestyle and shopping habits of the community. A demographic analysis that identifies ethnicity as well as age is key to creating the appropriate retail mix.
- Then: Traditional Media Advertising
Now: Social MediaWhat to Do: BIDs and city agencies responsible for promoting retail districts must develop a media strategy that includes social media platforms such as Twitter, Facebook, and Instagram as well as videos on websites and other means of communication that resonate with Millennials and GenX shoppers.
About Our Retail Practice
HR&A develops and implements retail tenanting strategies for districts, corridors, neighborhoods, and proposed developments. We understand the power of leveraging retail within the context of its surroundings as a catalyst for economic vitality and new growth. To learn more, please reach out to Kate Coburn.