As retailers try to squeeze more sales-per-square-foot out of smaller spaces over the next year, they will be forced to get more creative—even partnering with each other to make their stores more compelling, Dave Weinberger told Chain Store Age Online. Weinberger is VP and director of engagement for CBX retail design consultancy. He believes real estate pressures will drive four trends in the year ahead, all of which are related to better understanding and catering to today’s shoppers.
“Consumers are shopping more often and making smaller trips,” Weinberger says. “Because of this, retailers are not just shifting to smaller formats. They are also taking increased note of how people shop and why their habits are changing.”
The consultant describes “theme-parkifying” as a way to give shoppers an exciting experience that happens to be convenient. He cites the Chicago and New York locations of Eataly as a possible source of inspiration for chains seeking to innovate in this way. “Sometimes likened to a grocery store with tasting rooms, the Italian food and wine emporium offers a compelling mix of retail, restaurants, food and beverage stations, a bakery and cooking schools, all under one roof,” Weinberger explains. “Such themed and curated shopping experiences are precisely the types of brick-and-mortar concepts that can inspire people to close their MacBook Pros, get off the couch, and drive to the mall.”
Themed and curated shopping experiences are precisely the types of brick-and-mortar concepts that can inspire people to close their MacBook Pros, get off the couch, and drive to the mall.
In the year ahead, other retailers will likely put their own spins on creative curation and theming. Babies “R” Us, for example, could take over a large-footprint store and create an experience built around a theme such as “motherhood.” Such a hybrid concept could have Babies “R” Us joined by, say, a Starbucks, a Lululemon, a Massage Envy, and a wine shop all inside a vacant big-box store, Weinberger says.
Convenience concepts will likely snap up premium corner locations, which are frequently owned by banks that no longer need this real estate. “In 2015, as the major convenience players jockey for position, look for C-store companies such as Couche-Tard, 7-Eleven, or CST brands to make big real estate deals with banks as they seek to seize such coveted real estate,” he says.
Struggling retailers this year will try to “reboot” and get out of their real estate commitments rather than simply closing their doors as in the past. Six months ago, for example, Authentic Brands Group announced it was shutting down all Juicy Couture locations, with a re-launch of the brand planned for 2015.
“Store-in-store deals are part of this proposal as well,” Weinberger says. “Is this strategy high-risk? Sure. But it is potentially high reward as well.”
Lastly, the consultant describes “side selling”—a trend toward looking for alternative channels in which to sell retail goods. Retail is currently popping up in parks and other public spaces, and it will continue to branch out in the year ahead.
“We will start to see colleges and universities, which have the demos and traffic flow retailers crave, sign more exclusive partnership agreements with retailers,” Weinberger predicts. “More businesses, too, will open up their extra space for retail.” Gyms, for example, could boost productivity by offering vitamin shops, apparel stores and juice bars.
“I firmly believe retailers will have to get creative to compete in the marketplace and get the most out of their real estate in 2015,” Weinberger concludes. “Channel lines will continue to blur as retailers invite, not only more consumer brands and tech vendors, but also other retailers into their stores. It should be an exciting year.”