Have you read any 2015 retail trend forecasts lately? Let’s face it, many so-called trends for the year ahead — the need to focus on things like mobile payment, customization, foodservice, smaller formats or millennial shoppers, to name a few — are at this point just the cost of doing business.
Yes, technology will be a part of retailing in 2015, just as it was in 2013 or, for that matter, 2010. These days, the story is more about real estate: As pressure on sales per square foot increases and retailers hunt for smaller footprints in higher-density areas, chains are getting increasingly creative. Some are even partnering with each other to compete. Here are four trends to watch for in the months ahead:
Consumers are shopping more often and making smaller trips. 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. Given the glut of empty big boxes in otherwise-healthy strip malls and shopping centers across the country, large-format seekers should look to New York and Chicago’s Eataly for inspiration. 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. 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.
In the year ahead, don’t be surprised to see retailers put their own spins on creative curation and theming. The likes of Babies “R” Us, for example, could take over a large-footprint and create an experience built around a theme such as “motherhood,” with a Babies “R” Us, a Starbucks, a Lululemon, a Massage Envy and a wine shop with open eating areas—all inside a vacant big-box store.
Huge shifts that are underway in the rapidly consolidating gas and convenience industry, where big players are snapping up street corners to create land banks that give them the freedom to either develop the properties or keep them out of competitors’ hands. But as good street corners get scarce, this strategy will have to adjust.
Drug stores have long had great dirt, but that business is booming, riding the wave of increased prescriptions and convenience items. Banks, by contrast, are ubiquitous and have set up shop over the last 50 years on some of the best corners out there. And yet consumers have fewer and fewer reasons to go to a branch. 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.
It’s hard to stay relevant today. Traditional brick and mortar stores have a more difficult time keeping up to date. Instead of slowly dying, look for some retailers to shut down, get out of their real estate commitments and reboot. Six months ago, 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 the proposal as well. Is this strategy high-risk? Sure. But it is potentially high reward as well. Indeed, a variety of retailers are likely to embrace similar approaches in the year ahead. My money is on Abercrombie & Fitch and American Eagle Outfitters being next. However, rebooting won’t be confined to apparel retail: After shutting down more than eight months ago, specialty bookstore Rizzoli has a New York flagship opening in the spring.
Retail is all around us. You used to have to seek it out by going to the store or the mall. Now, retail drives down the street and also has set up shop in your phone. Look for this to ramp up even more. Retail is currently popping up in parks and other public spaces. We will start to see colleges and universities, which have the demos and traffic flow retailers crave, sign more exclusive partnership agreements with retailers. More businesses, too, will open up their extra space for retail. Eventually, gyms that don’t have a vitamin shop, apparel store and juice bar will be seen as a thing of the past. In 2015, we could even see walls of merchandise from Walgreens or Rite Aid in high-traffic doctor’s offices.
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. 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.
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