Conversations from the Corner Office with ID Plans CRO Seth Garber
A quick scan of the news certainly makes you think so, with articles on store closings and high mall vacancy rates coming out seemingly every day. Plus, all those white vans delivering dozens of Amazon boxes around your neighborhood may also make you question the viability of the traditional retail model.
However, in the midst of all my reading about the “retail apocalypse,” I started noticing something else – good news. For example, this article in Digiday noting big-box stores like Walmart, Home Depot, and Nordstrom all reporting anywhere from 3 to 8 percent growth in sales at their physical stores. And this one from Forbes quoting National Retail Federation President and CEO Matthew Shay as saying “the retail industry, while continuing to transform, is alive and well.”
So, which one is it? Is retail dead? Or is it moving in the right direction? Seth and I explored this topic in our weekly chat, Conversations from the Corner Office. Here’s what he had to say.
SG: What we’re seeing is that some stores are closing and new ones are opening – it happens all the time. The majority of our customers actually have high occupancy in their centers. Most of them are 100 percent leased.
SG: I think it’s because nontraditional retail is becoming more of the new retail, and the makeup of what you find in a shopping center is starting to look different than it did in the past. They’re moving away from being strictly retail to becoming more service-driven. Real estate companies are also getting smarter and they don’t want to lease to just anyone – they’re starting to think about what type of tenant is going to best supplement the rest of the center to drive people there.
SG: Healthcare is a great example. A dental office may look to go into a location that has a vision center, or a vision center going into a place that has a specialty physical therapy center. Then that shopping center is going to be known as a health care center rather than just a shopping center. Also, the evolution of the coworking concept and shopping centers becoming more like office buildings. They’re becoming like mini corporate centers, and service-oriented businesses like nail salons are moving into these spaces and prospering because there’s an office building community right there with a built-in client base.
SG: At some point, maybe, but not in our lifetime. I think there will always be a need. I mean, if there is something you need to have immediately, or you’re the type of person who wants to go to a shop and try things on, the traditional retail model still works great.
SG: You’re going to see stores that are focused on the experience, adding things like lounges and cafes, maybe even gyms, to keep people there longer so they can make better connections with the brand. They’ll also integrate technology to anticipate the needs of the shopper and create a more personalized experience. That will help build brand loyalty and increase the wow factor.
SG: There’s no way to change it. There will always will be people who believe it. What people have to realize is there will always be disruption – they just have to be nimble enough to change and adapt to stay in the game.
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