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Page 8 — Retail Properties Quarterly — February 2015
T he Great Recession had a tre-
mendous impact on our econ-
omy, retailers, shopping centers
and consumer habits.We have
seen the impact of e-commerce
and the ripple effect it is having on
bricks and mortar. Consumers are
savvier and demand more from their
retailers, resulting in greater competi-
tion and reduced margins.
There is still much to be worked out
with e-commerce, but I believe there
is a force to be reckoned with that will
influence the retail marketplace and it
has nothing to do withTreasuries, oil
prices or interest rate – millennials are
rising!
Those born between 1980 and 1995
cannot be overlooked. Boasting a popu-
lation of approximately 75 million,
they are quickly becoming the most
influential group of consumers.The
Great Recession and technology have
reshaped the marketplace, but I believe
the next shift will be driven by the mil-
lennials who are looking for brands
that are high quality, fit their personali-
ty and incorporate social responsibility.
Even if millennials have become
accustomed to “window shopping” in
an electronics store like Best Buy to
find the laptop they want, then later
buying it online at Amazon, thus delay-
ing the instant gratification for two
days, there is still a competitive advan-
tage bricks and mortar offers – experi-
ence.The right experience can evoke
emotion and spur loyalty. In order to
offer this experience, retailers need to
grab the attention of millennials.
Economic breakthroughs often are
driven by real or perceived scarcity
in the market. For a period of time
during the industrial revolution, the
scarcity was labor.We needed people
to run machinery to keep up with
the demand for goods.Then, as we
began to produce incredible amounts
of goods, the scarcity became knowl-
edge. Our production was so good, now
consumers had options and choices.
We are inundated with choices, from
deciding which car to buy or which
food is the healthiest, to which smart-
phone can handle email updates, GPS
needs, social network posts and take
good selfies.
Today the scarcity is attention.Take
a look around and observe howmany
people in our society have their head
down focused on their smartphone.
Our phones follow us everywhere, and
with all the informa-
tion we have avail-
able at our finger-
tips, our immersion
in technology takes
our attention away
from the real world.
Despite this, I believe
that a desire for
meaningful relation-
ships and experi-
ences still exist.
So how do retail-
ers capture the
attention of the
selfie-taking, Insta-
graming,Twittering,
Facebooking millen-
nials who are the next generation of
shoppers?
Tenant mix. Give themwhat they
want.The right tenant mix, as well
as offering options that cannot be
replaced by e-commerce, are key in
creating an incredible experience.
Retailers are realizing that they have
to offer more to be competitive. Retail-
ers likeWhole Foods and REI focus on
creating an experience while shopping.
The staff is trained to take a typical
shopping visit and transform it into an
educational, inspirational and gratify-
ing experience that creates value for
and loyalty from the shopper.
Technology. Embrace technology
instead of fighting it, and use it to your
benefit. If millennials want to post pho-
tos and add hashtags, why shouldn’t
they be doing it at your shopping
center?Technology has moved social
media from a static place – either at
home or office – to on-the-go where
people can engage in real time. Beacon
technology is one of the latest trends
hitting the shopping center industry,
which takes advantage of the signal a
cell phone emits and collects data that
can be used to optimize retail centers.
Look for this technology to change how
tenants and owners engage with their
shoppers.
Third place. By encouraging shop-
pers to stay a while and come back
frequently, retailers are creating a “third
place,” a place to go besides home and
work (first and second places). In order
for this to be successful, retailers must
capture their attention and give them
a reason to stay. FreeWi-Fi is not only
expected, but also presumed at high
speeds. It pays to be ahead of the curve
when it comes toWi-Fi speed.The next
generation is going to expectWi-Fi
wherever they go, so retailers might
as well offer it now.This also creates
another opportunity to gather addition-
al customer data, which can be used to
benefit the store.
Simple things like charging stations
help as well. Anyone who owns a
smartphone can understand why this
is important. Retailers shouldn’t want
potential customers leaving a store to
go charge their devices.
Immerse the senses. Create a stimulat-
ing atmosphere to draw attention from
the soft glow of phones. Lights, sea-
sonal floral color, water amenities and
music are simple additions that engage
the senses.There are even technologies
that exist today to infuse fragrances
into an environment. Food retailers
like Cinnabon have their ovens placed
toward the front of the store so the
aroma of freshly baked cinnamon rolls
escapes into the shopping center every
time the oven is opened.
Host events. Events are an incredible
way retailers can generate experiences
and create positive memories for shop-
pers. Low- and no-cost events, like
a concert series, car shows, cooking
exhibitions and action sport demon-
strations, welcome the community to
your center, promoting community
involvement and camaraderie. Creating
a diverse calendar of events can take
a lot of thought and preparation, but
the outcome can rally a community
around your center and give customers
opportunities to live experiences right
in their own backyard.
Give back. Social responsibility is no
longer just a trendy term that is thrown
around. Get involved in the community
you serve. Shopping centers have a tre-
mendous impact on the sales tax base
of a municipality, and they can also
engrain themselves into the fabric of a
community. Millennials are drawn to a
brand that stands for something and,
by doing so, shopping centers can do
right by doing good.
To have a successful project, you
need successful tenants.The days of
passive ownership are over. As develop-
ers, we typically shudder at these ideas
because they can drive up develop-
ment costs, and the ongoing program-
ming comes out of the bottom line. But
with customer expectations continuing
to evolve and the millennial generation
representing shoppers of the future,
retailers can’t afford to ignore these
trends.s
Market Driver
Luke
McFetridge
Regional property
manager,
NewMark Merrill
Mountain States,
Fort Collins