CREJ

12 / 28

Page 12 — Retail Properties Quarterly — May 2017
Retail Trends
A s we hear about more store
closures every day, it leads
many to ask the question of
whether online shopping is
killing the brick-and-mor-
tar stores. We are witnessing the
fastest-changing consumer market
in our lifetime – and rapid change
comes with pain and challenges.
We hear about retail stores closing,
downsizing or filing for bankruptcy,
but analysts agree that retail stores
aren’t disappearing – they are evolv-
ing rapidly, which is causing some
initial panic. However, the evolution
of retail can be summed up by rec-
ognizing a few key trends.
• Budget and tech-savvy shoppers.
Since the Great Recession of 2008,
shoppers have become more tech
savvy and cost conscious. Technol-
ogy allows consumers to easily com-
pare pricing in multiple stores, lead-
ing them to make better-educated
decisions.
• Sales promotion overkill. In order
to entice savvier shoppers back into
stores, there has been a push of
sales and promotions, leading to a
devaluing of the product. It seems
the more sales and promotions, the
less inclined society is to purchase
full-price merchandise. Outlet malls
and discount retailers continue to
thrive while their full-price counter-
parts struggle for market share.
• Convenience required. Today’s
busy society requires most homes
to have two working adults to pay
the bills and care for the kids. Stores
providing convenience are being
noticed. Examples include King
Soopers and Walmart, which allow
you to order groceries online for
delivery to your
home or car, and
Kohl’s, which set
up a special check-
out line for online
order pickups over
the holidays. These
are a convenience
to customers, cut-
ting time spent
shopping and wait-
ing in long lines.
Retailers that will
survive the evolu-
tion are the ones
with the financial
resources to pro-
vide a robust online presence and
meet the convenience and faster
shipping requirements of consum-
ers.
• Millennial expectations. Millen-
nials, many of whom have never
known a day of their lives without
a computer, are changing shop-
ping. Retailers must adjust to the
immediate-satisfaction expectations
of this generation by giving them a
reason to go to stores and not just
jump online. Millennials look for
an experience, so more stores are
getting onboard by offering kiosks,
handheld mobile devices and enter-
tainment.
Restaurants coined the phrase
“eatertainment” to explain the trend
over a decade ago, which now fea-
tures concepts like ViewHouse and
The Source. These are accompanied
by entertainment concepts such as
Topgolf, The Summit, Brunswick
Zone and Great Wolf Lodge.
• Leases are up. Ten-year lease
deals contracted during the reces-
sion are up for renewal. If a store
was “on the border” of profitability,
a lease renewal will spur a rota-
tion into smaller-footprint stores or
more store closures. This triggers
a domino effect. When an anchor
store closes, it often activates what
is called “co-tenancy clauses,” allow-
ing the remaining mall tenants to
exercise their right to terminate or
renegotiate the terms of their lease.
• Oversaturated U.S. market. Despite
the recent closures, the U.S. is still
oversaturated with stores. According
to a Morningstar report from Octo-
ber, the U.S. has 23.5 square feet of
retail space per person, compared
with 16.4 sf per person in Canada
and 11.1 sf per person in Australia,
the next two countries with the
highest retail space per capita. With
online shopping availability, retailers
must consider closing or shrinking
less desirable locations because they
have become less necessary than in
previous decades. This phenomenon
also will lead to greater distances
between repeat stores.
• Retail partnerships. Unaffiliated
retailers joining forces is a grow-
ing trend. In 2015, Target and CVS
became partners with CVS taking
Julie Jacoby
Retail
administrator,
economic
development, city
of Thornton
Simon
The Denver Premium Outlets at Thornton breaks ground this month and is designed
to address the savvy shopping mentality