Industry insights, market outlook reports and commercial real estate
news, and trends from the Coldwell
Banker Commercial brand.
Expansion of Main Street Retail Through Digitalization
Everyone’s heard the buzz about the death of traditional brick and mortar and the rise of experiential retail. U.S. retail vacancies were at 10.2% at the end of 2018, a marginal increase from 10.0% a year earlier, according to a report from Reis. Current market trends have challenged retail owners and investors with vacancies in retail spaces from areas like Magnificent Mile and Fifth Avenue as well as on Main Street.
In today’s business climate, accurate and relevant information is crucial for success in commercial real estate investing. In other words, if you don’t know the local market, you could be in real trouble. Despite this fact, commercial real estate is a sector favorite among investors, with its relatively strong returns with only minimal to moderate risk.
Retail, the fallen angel of the industry. We have been barraged by negative headlines this past year, of which company has filed for bankruptcy, or which mall is now a ghost town. However is this bleak outlook really true? It seems that experts in the industry think the retail sector is simply in a transitionary period, where evolution is extremely important. The companies that embrace the change and remain creative and innovative need not worry.
A few years ago, the grocery industry seemed like the untouchable horizon. The one market that was safe from e-commerce. How could e-commerce bore its way into an industry with such perishable, fragile and heavy items? Impossible! Then, Amazon; as it often does, introduced Amazon Pantry and Amazon Fresh. These services allowed users to get groceries within 2 hours. However, consumers remained skeptical.
Amazon has been an extremely innovative force. In the past few years, they have totally revolutionized the e-commerce market, how we grocery shop, how we check out and even the shipping industry. Now, they have moved on and targeted airports. No, Amazon is not creating flying stores… However, they are looking into bringing their checkout-less stores to airports in hopes of appealing to travelers who are looking for quick, convenient options in between flights.
Once upon a time, when a sports stadium was built, the focus was on the game. Though builders would include restrooms and eventually concession stands, distractions from the sport at hand were seen as “minor-league.” Fast forward to present years, stadiums are now entertainment experiences and designers have turned to lifestyle centers for inspiration.
If you take a look around, it’s easy to see that online retail has become increasingly competitive. Gaps and niches in the market are filled, and there seems to be a shiny, new brand catering to every market segment out there. In other words, opportunities to really connect with your customers could be disappearing fast.
It comes as no surprise that many brick and mortar retail outlets have reported an overall dip in sales, thanks to the prevalence and mass appeal of online shopping. After all, being able to skip the traffic and parking, as well as the long lines at checkout, is hard to turn down. And, in particular, large indoor malls have really struggled – in fact, many have lost tenants and have been struggling to get shoppers through their doors, leading smart retails to explore new options for increasing foot traffic.
It seems that everywhere you look today, it’s almost impossible to avoid hearing or reading stories about Millennials. We have all heard about how they are making huge strides and taking the lead in business, politics, real estate, philanthropy, and more. But what you might not have heard yet is that Millennials are even shaping your grocery store.