Retail continues to be problematic but there are bright spots and some very creative people are figuring out how to innovate and transform the retail and mall experience to take it to the next level.
I’m particularly intrigued by the on-going popularity of Lifestyle Malls (e.g. Ponce City Market – above), as well as Walmart’s e-commerce operation under Marc Lore (totally kicking butt) and I’m very excited by what’s happening with retail technology e.g. phone camera utilized as keyboard.
Here are seven trends signaling the future of retail.
#1: Mall Reinvention: More Lifestyle than Retail
The retail apocalypse may still be upon us – especially when it comes to lower quality malls. For the A+ malls, however, things are looking more positive.
- Malls are converting space and focusing on social and entertainment concepts including movie theaters, escape rooms, craft breweries, and music venues. Ponce City Market (above) is a perfect example of a mall offering it all: retail, restaurants, beer halls, bike rental, condos, work spaces.
- Food halls are moving into malls as are grocery stores e.g. Wegman’s is opening a 134,000 sq.ft. location in a former department store at Boston’s Natick Mall. It will be a 2-story supermarket with direct access to the mall. Plans call for in-store café dining with more than 100 seats, as well as two restaurant concepts that will occupy the second floor.
- Some malls are evolving into lifestyle centers with health care facilities, fitness centers, office space, apartments and even hotels. Creating a space where living, working, dining and retail come together in a mall space could be transformative for the category.
- And then there’s Macy’s. A hot pick for investors not for their retail sales, which continue to be dismal, but for their real estate strategy. Cushman & Wakefield is particularly interested in their Herald Square flagship monetization efforts, which they believe have significant value for development.
Read on below for highlights of 6 more trends.
Walmart’s Jet.com is launching a private-label brand, called Uniquely J, a brand designed for metro millennial consumers.
Based on their research:
- Two thirds of millennials shop at Walmart
- Millennials are “the most value-driven generation that we’ve seen, very focused on value, which aligns well for Walmart.“
- The Uniquely J line consists of essentials like coffee, olive oil, laundry detergent, paper towels, etc. and will incorporate “boldly designed packaging” and “fun, witty label copy” combined with quality ingredients.
- Walmart had previously offered its own private-label brands — Equate, Sam’s Choice, and Great Value — on the Jet.com website, but those brands proved unpopular with younger shoppers.
Walmart has also been building up its capabilities to offer faster deliveries throughout the United States. It has the infrastructure to do overnight delivery for 87% of the country and is working on spreading out inventory to those warehouse locations.
#3: Target’s New In-Store Experience: Less Red/ More Tech
At Target’s primary test store in Stinson (Northeast Minneapolis) you’ll find:
- Red reduced by as much as 50% (less red makes brands stand out more)
- Seven spaces throughout the store dedicated to cross-merchandised displays based on hot fashion trends
- More visual merchandisers to handle frequent display updates
- Technology updates include wi-fi embedded in light fixtures allowing shoppers to use their smart phones to shop
#4: Asia as tech trendsetter: The phone camera is the new keyboard (Source: tsnooz.com)
In Asia, consumers rely on their mobile devices for everyday transactions e.g. at restaurants in China you can place your order simply by scanning the bar code of the desired dish with your phone. After it’s delivered to your table, you pay via mobile.
- “Look at Instagram and Snapchat, and bring in AI around recognizing objects, and deriving intent, and you can see that will be a generational shift.”
- “Asia is showing us the future in payments: credit cards are becoming less useful and cash is going the way of the dinosaur.”
Blackstone, the world’s largest real estate investor, looks at technology as the most import theme today when making investments.
- In the last 7 years, Blackstone has purchased over 400 million square feet of warehouses in the United States, Europe, Asia, and Brazil.
- The firm did so with the idea that the share-shift from offline to online is leading to more demand for warehouse space.
Another impact from technology is job creation and the effect it has on the real estate market.
- That’s led to a boom in places like Seattle, Northern California, Los Angeles, Austin, lower Manhattan, Boston-Cambridge.
- In Europe, it’s impacting Stockholm, Amsterdam, London, Dublin, and Berlin.
#6: The Circular Economy
In the Swedish city of Eskilstuna, 100 kilometres from Stockholm, shoppers are flocking to ReTuna Aterbruksgalleria, a shopping center dedicated entirely to repaired and up-cycled goods.
- It opened in 2015 and brings together 14 shops, a restaurant, an exhibition area, conference facilities and a training college for studying recycling.