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  • 1/8/2019

    The Revitalization of Retail

    Brick-and-Mortar is Alive and Well
     
    Borrowing from a famous Mark Twain quip, rumors of the death of retail have been greatly exaggerated. No question, retail as we once knew it is evolving, but dead? Hardly!
     
    Despite the recent ominous headlines about iconic retailers such as Toys R Us and Sears, vacancy rates in desirable locations like Fairview Town Center have actually fallen and physical stores are performing well overall.
     
    Nine out of the top 10 U.S. retailers are still physical chains, and various sources report between 90 and 94 percent of all retail sales still taking place in stores. Brick-and-mortar retail just wrapped up a notable holiday season, beginning with the 67 million shoppers that flocked to stores on Black Friday, according to the National Retail Federation.
     
    Online and Onsite: Partners, Not Foes
    The most successful retailers are acknowledging and embracing e-commerce as a game changer but certainly not a game ender. It’s all about giving shoppers what they want and meeting them where they want to be. Retailers with the brightest outlooks are appealing to shoppers — especially targeting the millennial and Gen Z audiences — by offering more experiential in-store shopping and combining the best features of online and onsite.
     
    Online shopping is complementing rather than replacing stores. There’s not only room for both; there’s a definite need for both.
     
    First, today’s shoppers of all ages are likely to research their purchases online even when they plan to make those purchases in physical stores. And on the flip side, many shoppers check out products in stores prior to making online purchases.
     
    Then there are the many shoppers who make their purchases online but prefer to handle returns and exchanges in stores. This process benefits retailers as well, since shoppers often make additional purchases during those return/exchange visits.
     
    Last but far from least is the obvious advantage that stores offer shoppers when it comes to actually seeing, touching and trying the products they are considering for purchase, from cosmetics to clothing to home furnishings.
     
    A number of retailers that launched exclusively online have been adding physical stores, including Warby Parker (eyeglasses), Allbirds (shoes), Everlane (clothing) and Minted (stationery and home d├ęcor), to name just a few. Even Amazon is experimenting with brick-and-mortar locations.
     
    The Human Connection
    We often hear that digital communication is robbing our youth of personal connections, but a recent Forbes article notes that members of Gen Z (loosely defined as individuals born between the mid-1990s and the mid-2000s) value relationships and human interaction. They prefer to make purchases in stores and are more likely to ask for help in stores than other generations.
     
    Whether researching a future purchase or returning/exchanging a past one, shoppers visiting brick-and-mortar locations experience the opportunity for human connection and personalized service that e-commerce, by definition, can’t provide.
     
    That’s one of the reasons why the sales conversion rate in stores is an estimated 7.5 times higher than the rate for online shopping.
     
    Fairview Town Center Part of the Retail Reinvention
    Along with mall sites and other retail centers, mixed-use is reinventing itself, too, with the concept of anchors expanding and diversifying to include hotels, dining and entertainment venues. Some refer to this integration of retail and experiential destinations as “retailtainment.”
     
    Our own Fairview Town Center is a great example of this innovative movement, offering a 200-acre regional lifestyle center that’s home to a diverse tenant mix including retail, service, dining, health and fitness, grocery, hotel, entertainment and residential. Our newest additions of Home2 Suites by Hilton, Residence Inn by Marriott, Elliott’s Hardware, Bowlero bowling alley/party venue/sports bar, 24 Hour Fitness and a spacious central green space are outstanding complements to our major department store anchors, impressive restaurant options, Whole Foods, iPic Theaters, popular community fountain attraction and much more.
     
    The time is right, and so is the location, for the reinvention of retail, and we’re excited to be part of it. Let me know how I can help you be part of it, too.
     
    —Ray Dunlap, Fairview Economic Development Corporation

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