July 8, 2019 Comments Off on Retail 2030: Consumers’ Expectations for Future Shopping Centers Surprising Views: 2308 Connect Classroom, National News

Retail 2030: Consumers’ Expectations for Future Shopping Centers Surprising

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By Dennis Kaiser

The shifts sweeping across the retail sector are not new, nor should they be surprising. A sector built on consumer wants and needs has evolved and adjusted over the decades to meet the basic necessities of people, while appealing to the whimsical desires of those with disposable income.

Sure, e-commerce and technology quickly pushed the needle into new, less-understood areas that are tough to anticipate. But, the clarion to change or die has been around longer than omni-channel strategies or “last-mile” facilities.

Greg Maloney, JLL’s retail division CEO in the Americas, pointed out in a recent column in Forbes, despite all the new tech gizmos retailers and shopping centers are integrating into the shopping environment, consumers actually favor some good old-fashioned approaches.

A JLL survey of 1,500 U.S. consumers found that future shopping centers would do well to focus on three areas: skilled customer service, personalization, and convenience.

Maloney wrote: “Shoppers still place an emphasis on value and efficiency – especially when it comes to shopping for daily needs – but they also want to be surprised and delighted.” He added, “That doesn’t mean we need centers made up entirely of axe throwing and beercade tenants, however.”

Interestingly, the survey revealed that 37% of consumers really just want new and innovative retailers. An example Maloney cited was beauty brand and retailer Glossier, which creates “instagramable” stores to give consumers’ ideal settings to take the perfect selfie. So far that concept has worked, notes Maloney, as Glossier’s New York showroom generated more revenue per square foot than the average Apple store.

“So, it’s clearly not about completely deviating from retail, but the concepts need to be modernized to fit today’s consumer and, more importantly, need to be updated constantly,” writes Maloney. “The original 10-year timeline for store roster updates simply won’t cut it. As a result, shopping center owners will need to be creative and flexible in their leasing structures in order to bring in these types of emerging brands that can’t yet commit to long-term deals.”

Another JLL report finding was that although online sales are rising, roughly 90% of retail sales still occur in a physical store. Says Maloney, “However, that doesn’t mean that stores should rest on their laurels. What it means is that stores need to be even more diligent in perfecting their in-store experience for shoppers.”

He points out when retailers and malls prioritize people it helps nudge consumers into a spending mood. The survey found that a little more than 50% of shoppers indicated that skilled customer service associates were a deciding factor in where they shopped. To be sure, technology does play a role today, especially since consumers have become more channel agnostic. That’s not to say technology isn’t also important, especially with consumers becoming more channel agnostic, notes Maloney. The report revealed that more than 70% of Millennials and Gen Z shoppers want stores to remember their buying preferences as they proceed through a buying journey that now encompasses researching, browsing, and buying across a brands online and in-store offerings.

JLL points out that wellness has emerged as the newest status symbol for consumers. The global health and wellness economy has grown 12.8% in the last two years to $4.2 trillion, notes Maloney.

“In retail, we often talk about fitness or healthcare tenants. While those are both important aspects, the number one thing consumers wanted to see in their shopping centers was open green space (41%),” he says. “They are looking at shopping centers as a place to congregate and relax.”

JLL reports, roughly 17% of consumers want fitness concepts in their shopping centers – a trend shopping centers have already been adopting, reflected in the14% growth of fitness tenant move-ins in 2018.

Another report finding was that just 11% of shoppers are interested in seeing customer service robots in a center in the next 10 years. More than 31% do expect to see a more seamless check-out experience over the next decade.

“While the allure of the latest tech will always be a draw, shopping center owners would be well advised to focus their tech investments on back-of-house utilizations that improve logistics, efficiency, and inventory management to provide a more frictionless experience for the shopper,” says Maloney.

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For comments, questions or concerns, please contact Dennis Kaiser

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