Where technology and retail site selection intersect
So much of the news coverage today about trends in the retail sector strikes a negative chord. The retail apocalypse. Record-high store closures. Outdated malls struggling for survival. E-commerce destroying brick and mortar.
The tone at EDR’s webinar on retail trends was decidedly more optimistic. The focus was on the latest trends driving demand for retail space and the exciting ways that today’s retailers are leveraging technology as they shop around sites for their next store locations. Here are a few key takeaways from our speakers.
The retail glass is half full, not half empty.
“JLL just released a new research report showing that e-commerce retailers plan to open 850 stores in the next five years, according to Dan Welby, Managing Director at EDR. “We’ve also heard analysts predict that many of the Toys ‘R’ Us stores that closed will be re-occupied by the time the holiday season begins, and even more of them will have new occupants within a year.” That’s the good news. Based on a recent study EDR conducted, the need for speed is becoming a key challenge retailers face. Yet the competitive nature of the market is putting incredible pressure on retailers to quickly identify and assess the best locations before available properties disappear off the selling block.
Brick and mortar demand isn’t diminishing. Omnichannel is in vogue.
“Technology is about more than just shopping online. It’s about the way shoppers interact with their stores. Having both the physical and the digital, and marrying those two, is critical now so that the experience is easier for the consumer.”
Stephanie Cegielski, VP Public Relations, International Council of Shopping Centers
As this “omnichannel trend” comes to life, it means that online retailers are going physical, but also that physical is going online. That’s why Amazon is investing in stores, and why Walmart is evolving from Sam Walton’s Walmart stores to acquiring online-only retailers as a strategy to broaden their customer base and appeal to a different customer. So both sides are seeing value in the other and meeting somewhere in the middle—driving demand for new uses of old retail spaces.
Technology is coming quickly to the retail space and will impact all facets of the business.
There’s a general consensus that the commercial real estate sector is a laggard when it comes to technology, that it’s hesitant to try new things, yet if you look at the CRE tech landscape, it’s quite complex. And within retail tech specifically, there are hundreds of firms looking to make an impact.
“Change is coming very quickly. Everybody is trying to use data in new ways for site selection and to analyze trends in retail, but that means there is also a lot of confusion about how to use data and use it correctly.”
Gregg Katz, Director of Innovation & Technology, The Shopping Center Group in Atlanta.
The exciting element is that site information is getting leveraged in new ways, but that doesn’t necessarily mean the human element goes away. “Artificial intelligence and machine learning are things we’ll hear more about, but nothing beats boots on the ground and visiting a physical site, or local market knowledge that analytics may not pick up. It’s important to think about these new applications and stay informed about what might work, or not work, for your organization,” Katz cautioned.
FOR MORE INFORMATION
For more on the generational changes that are impacting demand for retail space—plus a good look at how radius studies of a retail site location are evolving—listen to a replay of the event here.
EDR Insight is grateful to Stephanie Cegielski, VP Public Relations, International Council of Shopping Centers and Gregg Katz, Director of Innovation & Technology, The Shopping Center Group in Atlanta for lending their time and insights to the event.