We’ve all heard it. Brick-and-mortar retail as we all knew it is in a death spiral – and the prognosis is grim. Retail owners, tenants, and investors should find other ways to make a living. There is no life after death for this product type. But is this really the case? Are we sitting front row, witnessing the extinction of brick-and-mortar retail? The answer, as we discuss in our latest white paper, Understanding & Embracing the Evolution of American Retail, is slightly more complicated than “yes” or “no”.
Traditional retail is dying – yes. The reluctance of large department store chains and other retailers to enter into the new age has cost them dearly. Meanwhile, thriving retailers have made the investments necessary to remain relevant by creating wholesale changes, shattering old paradigms, and committing to a long-term strategy. Newcomers to retail are leading the way and recognizing the changing consumer trends.
One of the main trends noticed by retailers is the customer’s desire to achieve more out of a shopping experience than just a transaction. New retail must be enticing to the consumer. This is accomplished by creating a stimulating, interactive, and meaningful experience for the consumer. The experience of in-store shopping must be unique and authentic. It must embrace technology rather than shun it. By using apps to create customer loyalty programs or social media platforms where customers can share their experiences, retail can remain relevant in today’s e-commerce world.
Converting outdated retail space to respond to the wants and needs of the next generation consumer will require investment – but retail is far from dead. It is an exciting time to be in retail, and there are unique opportunities for retail investors and lenders who recognize the trends and can capitalize on the evolution underway.
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