The Commercial Inspector Blog Posts

Why Brick-And-Mortar Retail Isn’t Going Anywhere

WHY BRICK-AND-MORTAR RETAIL ISN’T GOING ANYWHERE
 December 14, 2022 |  CRE News, Investment |  real estate trends, business tips, retail space

Pointing out that the COVID-19 pandemic had far-reaching effects on the economy is not a new revelation, but it begs repeating as we encounter and adapt to our evolving industries. In the retail sphere, the public had to drastically change their routines to meet their basic needs, and in turn, vendors had to learn new ways to meet the altered demand.

In many ways, this forced adaptation has been a good thing for consumers. More options are available today than ever before when it comes to the retail shopping experience, whether it’s the expanded role of e-commerce, curbside pickup, or increased online integration from brick-and-mortars.

According to the International Trade Administration, while e-commerce was already seeing a steady increase in retail market share, 2020 marked nearly a 5% growth (from 13.6% to 18% total market share. Rather than dropping to pre-pandemic levels, e-commerce has continued where it left off, moving back to its more consistent growth levels, and it’s predicted to continue at a similar rate.

While acknowledging these trends, retail property owners may worry what this could mean to their brick-and-mortar investments. Although it is true that the retail sphere is rapidly shifting, current trends seem to show that in-person shopping will continue to be a vital piece of the industry.

The Rise Of Omnichannel Strategies
Increased presence of traditionally in-person-only businesses on the internet over the past few years have been well documented. But, what some might find to be surprising is that the inverse has become a more recent shift. Startups that began solely as e-commerce businesses have made moves to gain a physical, in-person presence.

Namely, Cotopaxi has expanded into brick-and-mortar locations, and as discussed in a recent release from real estate investment trust Simon, other online exclusive businesses like True Classic Tees, ThirdLove, Sugarfina, and Goodlife, are all making similar investments. This is all a part of the rise of “omnichannel strategies” in retail, as businesses continue to search for the best techniques for the greatest ROI.

What Are Omnichannel Strategies?
For the best marketing, businesses are rejecting the brick-and-mortar/e-commerce binary, learning that both may be needed for success in the current retail market. This is the thought that underpins the overall philosophy of omnichannel strategies.

An omnichannel strategy is, in short, a marketing strategy that uses more than one single venue as cooperative sources of seamless shopping for the consumer. This can look like a number of different things, but most commonly this means that a business uses their own website, their social media, and a brick-and-mortar location. An omnichannel plan would allow a customer to find an ad online, order from the website, and pick up their item at the store, in a smooth, easy-to-follow process.

The in-person retail model here works alongside e-commerce models so that businesses can capitalize on the strengths of each form, while avoiding their weaknesses.

The Future of Retail CRE
Commercial Real Estate Investors should not shy away from the retail market by any means due to the rise in e-commerce. As every industry has had to learn coming out of the pandemic, adaptation and innovation continues to be the key to success in CRE.

While Black Friday in-store shopping underperformed compared to expectations, according to CRE analysts at Bisnow, this marks a shift in behavior around the holiday, rather than a shift in overall seasonal sales. Mindsets have changed, and with that, businesses have had to change, too.

Although the consumer retail experience will undoubtedly look different in the next 10 years than it does today, experts agree that brick-and-mortar businesses will continue to be a vital part of that design, providing presence, accessibility that e-commerce cannot match, and a confidence in quality.

For your retail property’s next inspection, NPI has a network of trained professionals across the United States and Canada. Schedule your appointment with our industry-leading experts today.