THE RETAIL “APOCOLYPSE”
“When is the retail apocalypse coming?” you ask. Keep waiting. Many of the news outlets are citing the end of retail as we know it, and they are right in many respects. Only, it’s not dying…the retail industry is getting smarter and that is ultimately being driven by the consumer. There may not be as many large-scale, ground-up retail developments under construction as there were before the recession, but there is still a very active retail market. In this case the revival is being driven by technology, and the repurposing of older buildings in infill markets.
Over the last few years the most active tenants backfilling vacancies have been restaurants, fitness/wellness uses, entertainment venues, financial services, and medical/urgent care facilities. The common thread to these categories is that they are internet-resistant in many respects.
As we find ourselves entering a new year, the following topics are sure to be storylines into 2019 and beyond.
Retailers and landlords alike are looking for new ways to differentiate themselves from their competition, and one of the best ways to accomplish that today is embracing new technologies. Obviously, the internet has had a tremendous impact on consumer habits, but the influence of technology goes way beyond online sales. Quite simply, there is more data out there today to help influence smarter decisions. Real estate investors have become accustomed to, and expect, more data to prove an investment thesis. Retailers are changing the ways they appeal to consumers based on massive amounts of consumer data, and consumers expect a combination of experience and convenience provided by new emerging technologies.
A direct result of the rise in internet sales, retailers have been reducing their footprints for a more efficient use of space. This has affected how landlord’s plan their investment strategies, and how tenants define their real estate criteria. Over the last few years, retailers have been forced to decide between investment in technology to increase their web presence, versus investment in their brick and mortar stores.