The pandemic is back in the headlines, casting a long shadow on a battered retail industry.
But, consumer spending remains robust. That’s the good news. Even better news: this year there has been, and is forecasted to continue, heavy investing by retailers in brick and mortar, especially by online merchants.
The mall may be dead (or being repurposed into an Amazon
The reasons are many. Among them: open-air center rents have come down; customer acquisition costs online have gotten so expensive that physical stores are a better use of capital and a more effective branding tool; and the lingering pandemic has made shoppers wary of large indoor venues.
The most common reason given by digital-native retailers is that while online shopping is convenient, it isn’t personal. So, these retailers are hitting the bricks, coming to a neighborhood near you.
Amazon alone is expected to open more than 3,000 physical stores in the next year or two, according to industry insider Adam W. Ifshin, CEO of DLC Management Corp. Amazon Fresh
The list of retailers that have announced expansions this year is long, and the number of planned store openings is on track to far surpass closings.
The majority of all those new stores are opening in strip, outdoor, and so-called “power centers” — anchored by big-box retailers. In fact, it appears there’s a renaissance developing in what was once a mundane category.
Companies like Macy’s
Malls and department stores are not coming back, but shopping centers have become the hot new commercial real estate play.
Publicly held operators have seen their stock prices soar. Shares of Site Centers
One of the biggest benefits of meeting customers where they live instead of online is the ability to develop in-depth data. When customers visit stores, retailers get a chance to gather real feedback, insights into specific markets, insights into specific products and lines, and into specific demographic groups within geographic markets.
The line between digital and physical gets blurrier all the time, but one thing remains, the customer needs to remain in the center of the conversation. Listening to them daily via as many channels as possible and giving them what they want ends with everyone being happy.