As winter storm season ends and landscaping begins, the ACACIA team has spent the last few weeks out in the field meeting our customers at the annual Professional Retail Store Maintenance Association National Conference and the Restaurant Facility Management Association Annual Conference. We had many conversations with facility managers in all different verticals of retail, and learned so much about the current state of the industry at the educational seminars.

We’ve all heard the term “Retail Apocalypse ” and see the large closures of once mega brands, like the recent folding of Toys“R”Us. It’s normal to be nervous in this environment of brands going, or even starting exclusively, online. After many years of providing service for clients in this industry, we are confident that this new era of in-store experience is not the end of retail – but a catalyst for change and growth. Here are three signs retail isn’t going anywhere – and how to maximize the opportunity to create a better experience for your customers.

1. Shopping Centers Had Solid Performance in 2017


With all of the articles on LinkedIn, and even the leadership of the country, insisting that Amazon is taking down retail one big brand at a time, it’s easy to believe that the numbers aren’t there to support brick and morter stores anymore. But the numbers don’t lie – and that simply isn’t the case. In fact, The National Council of Real Estate Investment Fiduciaries reports that in 2017, “NOI (net operating income) per square foot posted a 2.1% gain from 2016, which extended the industry’s winning streak.” Additionally, occupancy rates are holding strong at a whopping 93%. While shopping centers include other non-retail service-based concepts, even malls – the most talked about closures – had their NOI “surge ahead by a hefty 13% from the previous year.”

2. People Still Crave In-Person Experiences 


The product type that your company produces makes a huge difference in predicting success with a brick and mortar location vs. an online shop. For many products, just because you CAN buy it online doesn’t mean that you want to. Restaurants, for example, have been mostly shielded from this “apocalypse” because though consumers have many options for ordering in (GrubHub, Uber Eats, Postmates, Seamless, the list goes on) and even for ordering food to cook (grocery delivery services like Instacart or meal kit subscriptions like Hello Fresh or Blue Apron), people still want the experience of going out to eat and shopping for their own food.

Big box stores like Target have performed consistently well throughout the retail closures because of their in-store experience, prices, and convenience. While electronic stores that sell high-priced items, like Best Buy, have suffered because of the ability of consumers to shop around online for the best price, many consumers don’t feel that need for lower cost items – and they don’t want to wait several days for their purchase to be delivered. While online clothing retailers are performing well, many consumers still want the experience of seeing, touching, and trying on clothing before purchasing – actually, a slight majority of 58.1%. By focusing on the things that shopping digitally solves for your customer, you can pinpoint ways to improve your in-store experience to make it more attractive, convenient, and affordable. Like Target has, you can create brand loyalty by solving customers’ problems, but making them feel welcomed, educated, and entertained.

3. Digital vs. Physical has Always had Ebbs and Flows 


Like “Retail Apocalypse ” today, a different industry was hailed as coming to an end about a decade ago. You couldn’t attend a marketing seminar or read anything in the industry back in 2006 without someone espousing that “print is dead” in the wake of the rise of digital marketing. It was all about e-mail blasts. It gave us the metrics we craved, the interaction, the tangible ROI from a marketing campaign that sending out a print mailer rarely gave you. It was automated, it was easy, it was repeatable, and it was modern. If you were spending any of your marketing budget on print back then, you were a dinosaur. But then, something happened. The e-mail market got so saturated and loud that people began doing the digital equivalent of what they had been doing with print mailers – deleting them all out of their inbox every day (AKA tossing them in the garbage) without even reading their content. And so, print began to stabilize itself. Getting a unique and sharp-looking piece of print marketing sent to you became a novelty again, and marketers began to look at their approach to their consumers using multi-pronged campaigns including digital, print, social, and in-person engagement.

The same is happening to retail. A great retailer will recognize that their customers want to interact with them in a variety of ways, including online, but that their physical store should be the hub of where customers engage with and become loyal to their brand. The future of retail will include an experience shaped by data, but executed by humans in an environment their customers love to come to.

Change is an inevitable part of any business and it inspires growth and adaptation to make an industry better. Retailers who can overcome these obstacles and see the opportunities to better engage with their customers will thrive. It is more important than ever to pour your resources into ensuring the future of your retail operation through innovation and cost efficiency. A facility manager’s role is critical to the success of retail as it evolves, as the NOI of the operation itself is tied to their efficiency in managing the many moving pieces of retail operations.

ACACIA is committed to supporting our retail partners through this time of change, growth, and excitement for the future of the industry!

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