In 2017, retail took a hard hit—21 major retailers filed for bankruptcy and over 8,053 stores closed their doors for good. Not to mention consumer spending through e-commerce channels is as high as ever, and Amazon is still staking tis claim as the “King of E-commerce.” But so far this year spending at brick-and-mortar is increasing, and retailers are getting creative with their store concepts to draw in customers.
To get a handle on the latest trends and what to expect from the retail industry going forward, Fashion Mannsucript spoke to Taylor Coyne, a retail research manager at Jones Lang LaSalle (JLL).
FM: What do you think the U.S. retail market is going to look like in five years?
Malls all across the country are witnessing significant renovations and many of those are seeing unconventional mall tenants and new uses being mixed in with traditionally retail-only centers. Many mall transformations have included an emphasis on food and beverage offerings, whether that’s adding in a brand new food hall like Eataly or adding in new restaurant concepts like Nobu and Fig & Olive.
Malls are trying to rid the public of the perception that they are solely places for occasional shopping events, instead creating live/work/play environments by incorporating residential, office, and hotel uses into their properties.
Malls are also experimenting with non-traditional tenants to fill spaces that have been left by underperforming retailers.The Void, the immersive virtual reality concept, is pure experience and while that may seem like an unlikely tenant, The Void is able to add to the center’s appeal by bringing in visitors that may not have normally made a trip to the location otherwise.
FM: What are some of the biggest challenges that retailers today are facing?
Heightened competition is one of the bigger challenges. However, with an increase in competition comes innovation. This competitive environment forces retailers to evolve and pilot new concepts to remain relevant during a time when consumer preferences are constantly shifting.
FM: What is one retailer that you think has been maneuvering the tricky retail landscape well?
Best Buy has done an excellent job of navigating the changes within the electronics sector. They have focused on training staff to become experts in many technologies that people want, but may not know how to navigate all the possible choices. They’ve created a true human experience by focusing on quality customer interactions.
FM: What do you see as the next big trend in retail?
Augmented reality has the capability to completely transform how we shop, and will change the way that we interact with products in-store and also how we shop at home. AR will allow brands to virtually engage with shoppers, which will be increasingly important as our world becomes more digital and the majority of American consumers do at least some shopping online. Home furnishings retailers are especially primed for AR since it can give shoppers the ability to see how those bulkier, and often expensive, items will look at home.
FM: Technology and AI are predicted to be major players in the retail space, but personalization and meaningful experiences are key to being successful. Do you see them as exclusive or could a retailer have both?
There are six universal criteria that satisfy customers’ most basic needs that JLL uses to evaluate experience. Two of those are Meaningful and Personalized. The Meaningful dimension looks at how connected shoppers feel to a brand (i.e. if they feel a sense of pride in buying that brand). Personalized relates to how a retailer understands the unique needs of its shopper and can make recommendations based on past purchases and behaviors. Both of these dimensions of experience can exist together, and arguably the better a retailer can perform on both will determine how engaged and fulfilled a shopper is.
FM: Off-price retailers have been doing relatively well during retail’s slump (as compared to normal retailers, department stores, and malls), why do you think that is?
Value is and will always remain important to budget-conscious shoppers. Interestingly, as we continue to talk about experience, it’s not the only aspect of success. Affordability is the most important aspect when shopping at an off-price retailer, and it often supersedes experience.
FM: What is the one thing you think that retailers today should put more focus on to be/stay successful?
Retailers need to focus on connecting with their shoppers and ensuring those shoppers have a great experience both in-store and online. Modern consumers expect to shop across multiple channels, including in-store, and the retailers that can adopt omnichannel strategies will be best fit to serve the modern consumer.