Consumers, computers and co-mingling… a glimpse into the future of retail
Disruption and retail are now somewhat synonymous. Over the last 10 years we have seen a seismic shift in consumer habits, models of retail and use of technology. Pretending that the retail sector isn’t going to change doesn’t help anyone. However, those with an informed view and a willingness to adapt will find this change presents some exciting opportunities.
Communities and co-mingling
As consumer’s expectations change, becoming a blur between the online and offline, so too have our views on what a physical retail environment should stand for. As engagement, between customers and with brands, becomes as important as the experience, centers need to be 24-hour destinations enabling multiple serendipitous encounters in a variety of contextual settings. This means mixed use, where individuals can seamlessly pass between use-classes. It also needs to be the community catalyst that lives in the very roots of retail and makes consumers feel a sense of place. However, to be successful it must also be authentic. Authenticity is the glue that holds a place together and consumers can smell an over-engineered ‘community’ scheme a mile off.
An integral part of any community is shared experience and in the new world of retail, eating out is a social experience that clearly brings people together. As such, the recent growth in enthusiasm for food halls comes as no surprise.
Our vision of this is what we describe as ‘co-mingling’; an environment carefully designed to cater to the wider needs of the modern consumer. Through the right curation of uses and users it is possible to create an ecosystem of living, shopping working and playing. Regardless of geography, the days of rigidly segmenting by sector are over.
Adapting to this dramatic shift requires reconsideration of the fundamentals of place, behaviors and business – factors that we have put at the heart of our mission at Cushman & Wakefield. This starts with changing the language and rhetoric around retail and then looking forwards at the opportunity rather than looking backwards at something that has already happened.
Raising the bar, and tailoring the experience
As online retailers continue to remove the friction of e-commerce through constant innovation cycles, the world of bricks-and-mortar must rise to a similar challenge. Creating a competitive experience now holds a higher bar. Retailers can no longer simply look to each other as the benchmark for experience and innovation they must also look to parallel industries to prevent consumers asking, if I can pay seamlessly when I take an Uber, why isn’t it the same when I purchase my groceries?
Real world vs the virtual world
Technology is everywhere. Its improving the way we do business, changing how we communicate and making everyday tasks more convenient. And yet to the world of retail and especially property, it is only just beginning to play a part. By harnessing technology retailers can add value to their physical space. As more and more traffic is directed online, retailers must begin to see the physical store as a way to support mobile sales rather than being simply a place of purchase. Technology has a role in facilitating this.
Augmented Reality and Virtual Reality technologies are ever improving, giving retailers the opportunity to engage with the consumer in completely new ways. From in-store interactions with a collection with 3D holographic models and virtual catwalk shows to the ability to virtually try clothes on is just the beginning.
So, what does all this mean for the future of retail? Certainly, the seismic shift in consumer habits, models of retail and use of technology in the past 10 years is just a glimpse of what is to come. The future is exciting and as we enter an age where old fashioned consumerism is replaced with something far more sophisticated, holistic and personal, there will be welcome experiences and opportunities for all.
Different solutions will be adopted to combat any perceived oversupply of physical retail space, depending on location. However, in this new landscape, while we are likely to see some of the existing retail floor space re-purposed, some existing shopping centers may need to be demolished to make way for more collaborative mixed use schemes. These ultra-mixed use developments provide the solution. Not only do they have co-mingling and community at the heart, but they will also offer businesses and consumers a place for innovation, education and creativity.
To learn more about how CRESCO, Greater Cleveland’s leading commercial real estate company, can help you with your property needs, contact us at 216.520.1200, or fill out the form below. A CRESCO professional will contact you shortly.