If you’ve been reading this column over the last four years, let me first say, “thank you!” It’s gratifying to think that my musings about retail and retail real estate have kept your attention and interest. In this, my 100th and final (except for an occasional contribution) Retail Rap, I wanted to tackle the big question: What’s next? Where is the retail industry — particularly brick-and-mortar — headed in the months and years ahead? Some of my answers to that question have their genesis in the earliest Retail Rap columns. Among the first few pieces were about the growth of new burger concepts and the rise of fast casual dining (Burger Bonanza): “the eye-opening (and mouth-watering) growth of a wide range of specialty burger restaurants [is] challenging the familiar fast food standbys”; and the trend toward downsizing store sizes to smaller spaces (Big Names, Small(er) Stores):
“Maybe it was the pressures of the recession, but I think these newer, smaller formats are the inevitable result of retailers asking themselves the tough questions about efficiency and then figuring out which departments actually generate more sales per square foot. With less wasted space for surplus inventory and more effective floor plans, some retailers are realizing that they can offer virtually the same selection in a much smaller space.”
I also pointed out in that piece that this was “…a way for retailers to continue expanding by opening up in markets that aren’t a great fit for a full-sized store and relocating existing stores within a marketplace.”
But new concepts and evolving store sizes are hardly the only trends to keep an eye on going forward. The emergence of e-commerce as well as online and mobile ordering is one of the most significant developments impacting the industry. While e-commerce continues to grow at an impressive rate, the most interesting aspect is that it hasn’t taken a bigger bite out of brick-and-mortar — the increases on the virtual side of the ledger have not been counterbalanced by corresponding decreases for brick-and-mortar.
After reading this week’s Retail Rap, I’d love to hear your thoughts on how our industry has changed over these last four years. Are you an irrational optimist? Do you have a different take on the impact of digital and mobile channels on brick and mortar?