Not long ago, a commercial real estate executive said to me, “Brick-and-mortar retail is dead. Online killed it.”
This was a conflicting time and topic for me because we had this discussion shortly after I discovered a passion for marketing and branding retail properties. This executive is an industry leader and someone I respected very much. However, I wholeheartedly disagreed.
So what prompted his declaration? Like most real estate execs, he focused on the numbers. Now, I understood numbers and, surely, I understood that the Internet was changing the game. But just like certain jobs can’t be outsourced overseas, I knew there were elements of the shopping experience that couldn’t be replaced by browsing on Amazon.
Part of that shopping experience is attributed to an element common in all of us – community. And the shopping center is the focal point of that community.
The Research
According to Pew Research Center, 80 percent of Americans are “online shoppers.” This isn’t surprising. However, 64 percent still prefer buying from brick-and-mortar stores. The report states that, “despite the large share of Americans who engage in online shopping and the potential conveniences that come with buying online, a majority of online shoppers indicate that – all things being equal – they actually prefer to shop in physical stores.”
Shopping means, “the purchasing of goods from stores,” but we know that it’s so much more than that. It’s called retail therapy for a reason! For some, shopping is a sport (ask any deal hunter), or an escape (ask any Mom). For many, shopping centers are a meeting place, and a means of entertainment. A place to share tender moments as well as comic relief. Shopping centers are deeply seeded in our culture.
Retail isn’t dying. It’s simply evolving.
So how can shopping centers kick the online competition? The real game changer is now the retail experience. Shopping center operators are no longer leaving community engagement at the hands of their merchants. They are building their brands by stylizing their properties, creating a digital presence, organizing events, and managing consistent communication programs. There’s been a shift in tenant mix and usage. Many developers are moving toward a mixed-use environment to create destinations and generate traffic to their properties. Tenants provide built-in traffic for retailers, while merchants provide an amenity to office users.
Jim Goldstein, a South Florida developer, explained it best when he said, “In residential real estate development, it’s hard to win when you sell bricks and sticks; but if you focus on lifestyle, that’s how you have real success.” This principle is now being applied to retail – and even the office sector, as many convert to a mixed-use model.
So, next time, someone tells you retail is dead, tell them to take a stroll in their local shopping center. They may just join that 64 percent.
Data for this article was compiled using information found in:
- Why Amazon is Betting Big on Brick and Mortar
- On Solid Ground: Brick-and-Mortar Is the Foundation of Omnichannel Retailing