The Future of Retail Real Estate Marketing
Perhaps you’ve heard: The #retailapocalypse is upon us.
- The great retail apocalypse of 2017 – The Atlantic
- The retail apocalypse is creating a “slow rolling crisis” – Business Insider
- Retail apocalypse – Wikipedia (Yes, it has a six-chapter Wikipedia entry.)
The retail apocalypse narrative is largely focused on the rise of e-commerce, which supposes a one-for-one relationship between e-commerce and brick and mortar retail. If one goes up, the other must go down, right?
Hold your horses—and your four horsemen.
The shopping experience as a unique entity.
It’s hard to dismiss some of the more troubling retail statistics of 2017, but it’s still possible we are just witnessing the metamorphosis of brick and mortar retail.
Shopping consists of (a) the purchase, and (b) the experience of shopping. For now, e-commerce can truly only offer a brick-and-mortar alternative for the purchase. The experience of shopping, on the other hand, is going to be awfully difficult to replicate or replace online. Even as virtual reality (VR) becomes more viable and retailers find interesting ways to incorporate VR into the online shopping experience.
Meanwhile, as consumer spending shifts away from consumer goods, it’s expanding for experiences. In fact, one report claimed 78% of millennials prefer to spend money on an experience rather than a product.
These factors have created an opportunity for a new wave of retail to thrive: experiential retail.
Experiential retail emerges.
Any experiential retail think piece will invariably rattle off the shining star retailer examples of REI, Apple, Nike and Starbucks as heroes of experiential. These companies have made brick and mortar retail an essential part of their brands, and they’ve reinvented and revitalized the original attraction of shopping in the first place.
But those examples have been touted to death. Plus, those leaders in experiential are limited to the stores themselves. What about the shopping center? How can retail real estate developers become champions for experiential?
We know it’s already been happening in Asia and South America for years, but within the U.S., which retail real estate properties are embracing and succeeding in experiential retail? Where does our industry go from here?
Shopping centers that are leading the experiential movement.
Great examples of experiential retail real estate are popping up across the country. One we are supremely excited for is COHN client ONE DAYTONA—a 300,00-square-foot retail destination adjacent to Daytona International Speedway and Daytona Beach, Florida, that is slated to open this year. Unlike many properties, ONE DAYTONA was actually designed to be an experience retail center in the blueprint stage. It will be where people go to hang out first, and shop second. ONE DAYTONA will feature a full slate of memorable on-site experiences—entertainment, community events, dining worth the effort, and more—to attract local and regional visitors to ONE DAYTONA.
In this way, it offers a tangible reason to skip online shopping and head straight to brick and mortar. It’s an experience. A destination. It’s worth the effort to get there, and that’s the point. The developers want people to hang out here, and you can see their vision clearly. Plus, because it’s across the street from the legendary raceway, ONE DAYTONA will be pumping with electricity and energy throughout the year-round race schedule.
ONE DAYTONA represents what experiential retail can be when it is prioritized from day one.
But what can traditional retail shopping centers do now to become more experiential, without completely redeveloping their center? Here in Denver, Southwest Plaza is proactively making their center more interactive and experiential by bringing in a new bowling alley, a cycle bar and a yoga studio is on the way. It’s a smart approach to reinvent the center without starting over.
What’s next?
When we think about the future of retail real estate, we might need to look (ironically) to the past. Let me set the stage for you. The place is Ridgemont Mall, Anytown USA. The year is 1982. “We Got The Beat” plays over a montage of major characters, all of whom spend every Friday night at the mall.
Being at the mall is an essential part of life at Ridgemont High. It’s the experience, not the goods.
That’s where retail real estate needs to be in the future: an essential part of consumers’ lives. When we talk about retail real estate, we should do whatever we can to make our retail centers offer essential experiences that are worth the drive and effort.