Retail in Reality, and in Real Time
Why would you choose either/or, when you can have both? In reality, we often have to make that choice. In retail, we don’t. I don’t think that it’s a coincidence that the word “retail” is embedded in the words “reality” and “real time.” Retail has always been a dynamic industry, as retailers must constantly adapt and many times reinvent themselves. In fact, responsively developing its brand and delivery systems is critical to essentially every retailer’s success.
The same holds for the retail real estate industry. We continue to see shopping centers evolve, as retailer’s right-size and reposition their stores. It’s critical that retail property owners/developers, understand this and responsively adapt their projects by adding tenants that offer services, such as restaurants, salons, health, experiential and other social concepts — rather than goods that can easily be purchased online. As in all retail, one size rarely fits all, and nothing fits like custom-tailored.
Social networks are well-established now, as is e-commerce, and we’re seeing all connect with tremendous capacity. Retailers and retail brands are using social media to engage their customers, thereby creating personalized experiences that the customer not only loves, but wants to instantly share and explore — on Facebook, Twitter, Instagram, Pinterest, and so on. This provides the retailer with invaluable, authentic, real-time feedback to which it can respond. And, just as retailers look to locate their stores at densely populated, highly trafficked physical locations, they are now looking to do the same with their digital sites.
Clearly, online sales present a significant challenge for many retail categories and shopping centers as a whole, while at the same time, strengthen those retailers and centers that meet the challenge. That said, the National Retail Federation is projecting that U.S. holiday sales for bricks and clicks combined, will increase by a healthy 4.1 percent this year to $586 billion. However, online sales will grow by 12 percent to $96 billion.
Which brings me back to my original question: Why would you choose either/or, when you can have both? And, my answer: You wouldn’t. You would choose omnichannel retailers — those that have both the internet and brick-and-mortar stores, such as apple, Bed Bath & Beyond, and Walmart. These leading retailers have a great advantage built into their points of distribution throughout the marketplace, enabling them to deliver significant sales, both online and thru their stores. Their retail stores become distribution centers for their internet sales and the internet drives targeted customers to their stores for the immediate satisfaction that they cannot achieve online.
As my good friend, Peter Russell, regional director of real estate for Bed Bath & Beyond often says, “The internet changes everything—but it does not replace everything.”
Going full circle, the information gained from this integration will continue to be invaluable in guiding property owners/developers to understand what drives consumers to their projects, so they can merchandise their centers with the optimal mix of retailers. At the same time, we will continue to see retailers figure out how to best integrate the social networks and internet into their store programs, increasing their sales, lowering their costs, and extending their reach, as their online and offline strategies become seamless.
The reality is, that the incredible free, real-time, flow of information and ideas enabled by the internet and social media continues to have a transformative impact on the economy, our daily lives, and our retail market.