The retail landscape is changing, but the last year has proven the fundamental importance and centrality of physical retail. The result is not a doomsday, retail apocalypse scenario but instead a newer, more sophisticated ecosystem that places emphasis on the full range of value driven by an offline location.
In our latest white paper, we broke down eight trends that are defining much of the change being experienced. From evolving approaches to omni-channel and new tenant types to the rise of the ‘middle’ in retail – grappling with these trends will go a long way in determining the right strategies for companies across the offline retail ecosystem.
For the full report, download our white paper here.
Rise of the Middle
Much has been made of the ‘death’ of the middle, but the companies targeting this audience are among the strongest in retail. Target, Ulta, Kohls and others have built exceptionally successful companies by understanding what the ‘middle’ is looking for and then effectively providing that mix.
Even more, as the value and luxury lanes become filled with evermore competition, the brands hitting the middle appear to be operating in much clearer spaces.
The pandemic didn’t just limit the amount of shopping we did offline, but it fundamentally disrupted the way we shop. From time of day to day of week to the amount of time spent in a location, shopping behavior changed dramatically across a variety of sectors.
Critically though, as the recovery progresses several key behaviors are bouncing back to ‘normal’. And while this should have very positive implications for some brands, others are likely going to invest serious efforts to incentivize consumers to keep the newer behaviors going. In other cases, expect a bounce back to normal to be balanced by ‘small’ shifts that produce big consequences. As an example, even if coffee shop visitors return to their normal morning peak, if work from home remains a mainstay, expect midday visits to become far more significant than they were in the past.
Rising DTC and Product Oriented Brands
Is it possible that we talk about this trend too much? Yes, it’s possible. But, it’s unlikely, because this trend is so important that it can’t really be overtalked about. The key element here is that as this trend picks up pace, the fundamental distribution in the wider retail landscape will change. These brands come with a data savvy approach that enables them to make focused decisions that account for a wider range of variables and potential benefits.
And as they succeed, they disrupt the wider retail ecosystem creating a potentially better environment for most brands and shopping centers. First, because there is a limit to how many locations they aspire to, they create greater diversity enabling shopping centers to reside harmoniously as opposed to competing directly. Second, because many are very focused on specific audiences and demographics, they allow shopping centers to deploy the ideal brand for each specific location. Finally, they bring a pre-existing focus on maximizing the location, and therefore consider factors other than just sales, increasing the likelihood of sustained value and being an ongoing and long term focal point of whatever location they enter.
Check out the full list of trends here.