This summer, we're reading about many unconventional, innovative and surprising ways that brick and mortar retailers are working to become more relevant and appealing to today’s shoppers - and compete with online retailers. For many, it’s a fight for survival. For others, it’s a way to enhance their current success. Here’s what’s happening.
Meet the New Neighbors
Forbes reports that roughly 200 malls are at risk of closing down in the next few years. Analysts say that malls are overbuilt and can no longer support 100% retail use. Some malls are heading off extinction by re-purposing their space for non-retail use. Fairlane Town Center (Dearborn, Michigan) is retrofitting former department store space and other vacancies for use as offices. Nearby Ford Motor Co. reportedly will move 2,100 workers into the space and use it as a product planning center.
Add a Splash of Alcohol
More and more retailers are adopting the view that the way to a customer’s heart is through his, or her, stomach. According to USA Today, they’re also using alcohol to open those wallets. Barnes and Noble plans to add beer and wine to their café offerings in some locations. Target will soon test the waters by offering beer and wine in an in-store Starbucks.
Thinking Outside the Big Box
Target has been experimenting with small–format stores (TargetExpress) in urban locations for several years. The goal is to become part of the local retail landscape on a smaller, more personal level. Each TargetExpress store is decorated and stocked to match its neighborhood.
The latest efforts to make shopping “in person” new and fun again are wildly innovative and sometimes a bit outlandish. Memory-making experiences are changing the retail playbook – and it seems that the sky is the limit. Plans for a pedestrian-oriented retail development near Boston include a retro-inspired 21,000-square-foot bowling alley and restaurant, plus iFLY indoor sky diving. Will indoor sky diving pry consumers away from their online shopping? Only time will tell.
Here's what some of our associates at Locations Commercial Real Estate Services had to say about these trends in the retail industry.
"These are great ways to market to different target audiences, increase exposure and generate new traffic while creating a socio-buying experience for the consumer."
"A very successful example of the concept is Restoration Hardware in Chicago. In my many visits I experienced first hand patrons waiting for a table grabbing a cocktail or coffee and heading off to shop while waiting for a table. It's a prime example of " captive audience". This concept is so fundamentally sound I am amazed it has not been implemented before."
"DESPERATE!!! But competition keeps you on your toes. If you don’t have competition, you relax and do nothing."
"It has become more and more simple to order items online. So introducing different ways to socialize and connect with people, such as serving alcohol, are effective ways to bring people back into the store. I think this is a brilliant idea, not only for the business but for the consumer as well. It opens up various doors and opportunities for different types of sales and an increase in foot traffic."
“Shopper-tainment” is here to stay. Millennials are less into shopping and more interested in finding that unique experience. Retail habits are changing. Malls are shrinking. Re-purposing retail space will be the way forward for many large retail centers. The centers that get creative and find alternate uses for excess retail space will be the ones that survive.