by Evan Santos, Partner Relations at RealMassive
The retail ecosystem is undergoing a massive reconstruction. The consumer economy is being influenced by changes in technology, demographics, globalization, economic and environmental realities amongst a host of other retail trends. Changing consumer behaviors are driving change in space use, locations, and demand levels at an accelerated pace. The definition of “modern” retailing is rapidly evolving and the future of retail will remain dependent on how we work, live, and shop.
See the 4 major trends to expect coming in retail:
1. The Convergence of Bricks and Clicks
Expect to see the convergence of e-commerce and brick & mortar retail. Online retail is growing at double-digit rates and more and more people are finding online shopping faster, more convenient and less expensive than traditional shopping methods. Despite the popularity with online shopping, brick & mortar still remains paramount in most retail value chains and business models. In fact, most consumers still enjoy onsite retail. As a result, many retailers are becoming part physical showroom and part online sales. Consumers are now researching products online before going to the physical store or browsing in-store only to return home to complete their purchases online. Innovation will be key, making use of technology that integrates omni-channel (mobile, desktop, and brick & mortar) into a singular shopping experience for consumers.
2. The Influx of Mixed Use AKA The Evolution of Mall Centers
Retail properties are evolving into shopping, dining, and entertainment hubs that are central to, and fully integrated with, the communities that surround them. Centers are taking on mixed-use elements with residential, hotel, and office space, and entertainment options including cinemas, health clubs, restaurants, and recreational areas. A recent article by Beth Mattson-Teig in ULI’s Urban Land Magazine highlights how mixed-use projects have started to emerge in secondary and even tertiary markets. Expect for the mixed-use trend to continue to explode. It will be critical for owners and developers to integrate more diverse and appealing dining and entertainment options into malls and shopping centers and for retail business owners to hone in on opportunities in mixed-use developments.
3. The Millennial Purchasing Power
A report by the National Retail Federation underlines the importance of generational purchasing preferences. Today, the largest generational cohort in history is now poised to reshape the global economy. The millennial generation has had an increasing impact on society, and we’re just now uncovering the extensive effects of this generation on the retail industry. The Millennials are aged 18-34 years old and are over 80 million strong according to the US Census. Millennials have never known anything but a high-tech world, where technology is embedded into the fabric of their everyday lives. As the dynamics of consumption continue to evolve, millennials are looking to work, live, and shop in places that fit their lifestyle. As this generation enters the workforce and continues to grow their spending power it is clear why developers, retailers and manufacturers should be interested in meeting the needs of the millennials.
4. Rise of Unique In-Store Customer Experiences
Creating a unique and personalized customer experience will be fundamental toward building an attractive and successful retail business. A store has to be much more than a place to acquire merchandise. It has to help people enrich their lives. If the store just fulfills a specific product need, it’s not creating new types of value for the consumer. It’s simply transacting and any website can do that. To create a more personalized and seamless shopping experience, retailers are reshaping their physical space to offer more of an immersive experience; think Apple Store. Consumers, especially millennials, are craving experiences from brands.
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