Retail Thrives Where E-Commerce Can’t
In the last decade, the incredible growth of e-commerce has damaged the stability of brick and mortar retail, even appearing to threaten its very existence.
The rise of online shopping has unquestionably impacted physical stores, but it hasn’t extinguished their future. Instead, the effect of e-commerce has spurred a reevaluation of the retail model.
From this insightful self-examination, retail is regaining its focus on what it does best – experience.
Three Es in Retail
In retail today, the most important things that consumers can’t get online are experiences, eateries and exercise facilities – the three Es.
The shopping centers that survive and grow in the years to come will prioritize businesses that supply what can’t be ordered online. Bowling with friends, having a meal in a restaurant or cycling in a spin class, each involve a customer’s physical presence at a retail location. There are poor online substitutes, but consumers want the real thing and can only find it in-person.
The consumers’ tendency to continue seeking these experiential products and services reaffirms the brick and mortar model. While e-commerce may be selling the most in common goods, there will continue to be a demand for personal interaction in retail.
E-Commerce Wants A Piece
E-commerce retailers may be driving the shift from in-store to online, but even they see the necessity for certain in-store experiences.
Amazon is opening walk-in-walk-out physical stores, bringing the same one-click order experience to brick and mortar. And other cyber giants are starting their own storefronts – moving into the retail vacancies they’ve created!
What’s happening is a confirmation of the physical store model, coming from the few who never-before occupied them. Brick and mortar stores are built for success, but you must leverage your strongest asset – the value of an in-store experience.
History confirms that adapting to new circumstances is the only way to continue forward when the environment takes an unexpected turn. Retail is no exception.
It’s time for shopping centers to pursue a new model centered around the consumer. By measuring stores against the ruler of experience, retail can regain its relevance for the new age.
As shopping centers look to their future, their long-term plans must include taking steps in the direction of experience. Experiential businesses offer a better attraction for the entire center and for that reason their importance will continue to grow.
At Trout Daniel & Associates, we are experts at crafting unique shopping center environments, driven in part by selecting experiential tenants. We help our clients choose the right tenants that will propel the future of retail, as well as their center.