If you look up information relating to retail stores and brick-and-mortar shopping in 2017, you will inevitably be met with at least a dozen articles touting the “retail apocalypse.” With 2017 being the year of mall-staple bankruptcies (Aeropostale, American Apparel, The Limited, etc.) or massive closures (Macy’s, JC Penny, Rue21, Payless ShoeSource, etc.), it can be easy to accept this doomsday assessment as fact. However, a more accurate way of looking at the state of retail is not that it’s dying; it’s going through an evolution.
Elevated Experience
In last week’s blog we touched on the fact that elevated shopping experiences are key in 2017. Retail spaces that are adopting this mentality are thriving. Ikea is a prime example of experience-based shopping and has been long before this trend took over the mainstream. Retailers like Restoration Hardware have followed Ikea’s lead and taken a similar approach, setting their stores up as showrooms first and foremost which immerse shoppers in a walk-through style guide to provide design inspiration.
Eataly in Boston is another great example of offering up an immersive experience to consumers. Eataly allows visitors to choose from three different restaurants, grocery shop, and take cooking classes, all in one location. Going to Eataly is more than just dinner out or grocery shopping; it’s an all-in-one food experience.
Customer Service is King
Customer service is and always will be the cornerstone of any kind of service industry. If you want consumers to spend their time at your business, be it food service or retail, you have to show that you value both them as a customer and the time they are spending at your establishment. Stores that have always been known for their above-average customer service experience have had no problem thriving during the supposed retail-apocalypse. Apple stores, for example, continue to be full of shoppers at any given location, seemingly at all times. Their setup, which allows customers to try out new products and engage with brand experts, shows that consumers are willing to shop in person if they feel the experience and service they receive will be worth their time.
Makeup superstores Sephora and Ulta also similarly focus on the customer service experience to keep shoppers coming in-person to purchase goods. In-store exclusive sales, free sample and full-size products given with in-store purchases, the ability to test makeup colors and products before buying, and on-site makeup artists to help you try out a new look before committing to your purchase, all demonstrate a commitment to customer service that drives makeup lovers to look beyond the ease of online ordering and actually go in person.
Real Estate Shows the Reality
It can be easy to look at the numerous “dead malls” dotted across America and agree that brick-and-mortar’s days are numbered. However, the reality is that this drop-off is a result of the natural shift in population and locations. Malls that are closing are in areas with population drop-off. Less people means less demand for shopping.
As population booms in new areas, the demand for retail spaces has spiked. According to the Commercial Real Estate Association, 86.8 million square feet of new retail construction was built in 2016. Retail rents are also the highest they’ve been since 2008 while availability rates have steadily decreased.
These long-standing trends in retail-space demand show that retail is far from doomed. As stores learn to adapt to changing consumer desires, retail will not only survive but will thrive in this new economy. While mobile and ecommerce are here to stay, shopping in-person doesn’t appear to be going away any time soon either.