Many Developers and Clients of ours are concerned of retail stores closing from consumers shifting towards online purchases and E-commerce.
The magnitude of disruption over the last decade is indisputable as more and more retail stores are shutting their doors. Does the future of shopping entail majority of purchases being made online? How will property owners secure new tenants for large empty units? Should you be worried?
Current Capital Group is aware of the way the industry is shifting and can offer ways to secure new tenancy for the future. Below is some information on consumers and what they are looking for.
PRICE
Pricing plays a large part in what shoppers are looking for. Lowest price continues to be the driving factor for two thirds of shoppers across all channels. 45% of those surveyed said convenience is the largest reason for their shopping online. What does this mean for Property owners? Some retail stores are offering dynamic pricing models that allow real time price adjustments to cater to lowest cost minded consumers. Additionally, other retailers are looking into shipping/same day delivery options, which will be explained further in fulfillment. Current Capital is aware of the retailers that will be adapting to industry trends and can help place them in your buildings.
Loyalty
Brand loyalty, while hard-won, is not easy to shake. A whopping 90% of consumers are Amazon shoppers accustomed to frictionless, one-click checkout, so much so that 40% of them say they shop less often at retail stores and 25% shop less often at other retailers online. Brand loyalty reinforces the power of one-to-one connections with customers via personalization. Finding brick and mortar retail stores that have large brand loyalty is a key component.
Fulfillment
Home delivery is most popular, however click-and-collect with in-store pickup after ordering online is gaining ground. So is shipping from existing stores, which allows traditional retailers to better compete with online counterparts. These models will continue to grow as retailers and consumers trade off speed, cost, and convenience to achieve the most value at the lowest cost. Once again finding a retailer that is adapting to the fulfillment aspect from the consumer will be very important.
Assortment
The right mix of physical and digital product availability is essential. Some retailers are using showrooms where customers browse and test products in-store, then buy them online to provide an immersive experience while shrinking their retail footprint. Customers can see, touch and feel the products; skilled sales associates provide knowledgeable guidance as necessary.
Platform
Customers expect a secure, always accessible and easy-to-use technology platform; 50% of our survey respondents told us they browse retailer websites as their main search option for purchases. Meanwhile, mobile payment adoption continues to accelerate: 46% of consumers are open to using mobile payment via smartphone, a 17-point increase over last year.
Innovation
From self-checkout devices to touchscreen fitting-room mirrors that offer immediate help from sales associates, retailers are experimenting with various options to make the shopping experience more convenient, yet personal. Some retailers are partnering with tech accelerators to expedite digital offerings and offer small-scale, test-and-learn experiments rather than full-on rollouts to stay abreast of the accelerated pace of digital change.
Current Capital Group is aware of the industry changes and can help secure your real estate investments for the future.