The Retail Marketplace of 2016 and Beyond
Some say the mall is dead — or is it making a comeback? As anchor stores go dark, what takes over? Is a brick-and-mortar retail location still of value? And who is the consumer?
As we look at the retail marketplace in 2016, with many forces shaping, and reshaping the retail sector, I believe these trends will impact our clients in five ways.
1: Technology is changing everything. In two ways. The first is mobile tech, which has created smarter customers who comparison shop on the fly and expect the store experience to be as easy as online purchases. But it’s also an opportunity for retailers to create real-time marketing pushes to those buyers. The second is in the space itself: mobile point-of-sale units, smarter lighting and video, and modular setups allow stores to be more responsive to seasonal needs. Speaking of layouts ...
2: Tenants are taking smaller footprints. These days, businesses have much better control over inventory. The result has been less on-site storage and thus smaller footprints, allowing even big-box stores to pursue urban sites. Retailers are becoming more showroom than storeroom, with customers purchasing on-site, then receiving the goods at their home or office, sometimes that day. So if store footprints are shrinking, what happens to the big anchor tenant spaces that are going dark?
3: The retail and hospitality markets are colliding. The hospitality sector is on the rise, but there’s less available land. The shuttering of anchor retail spaces provides an opportunity for new uses, and mall operators and hotel operators are beginning to explore the benefits of joining forces, as our recent work at the Mall of America in Minnesota demonstrates. This hospitality-retail mix is also part of another trend:
4: Shopping centers are focusing on entertainment and experiences. The “lifestyle center” concept has been around for a while, but it’s becoming the norm. Shopping centers are increasingly turning their common areas into destination points: dining options far beyond the food court, entertainment spaces for performances, and more. All designed to keep people around a little bit longer. And who are those people?
5: Retailers know their customers better than ever. Thanks to big data, retailers understand the demographics, likes, and needs of who they’re selling to like never before. Tech-savvy millennials, who embrace an omnichannel lifestyle, are driving the retail sector more and more. But don’t forget the boomers, who command tremendous purchasing power of their own, yet have different, more traditional retail expectations. The most successful shopping centers are able to cater to both audiences and can respond more quickly to marketplace shifts.
Which takes us back to the first trend — and so the retail sector evolves, along with DLR Group’s understanding of how design can respond to, and anticipate, what makes a shopping center successful.