The Retail Apocalypse That Wasn't
Debunking the “End of the Retail Era” Myth
A naturally occurring force in any industry is change, stirring the status quo and leading people to jump on the bandwagon that an industry is dying. Since the onset of e-commerce, this myth has been ever present in retail. However, a recent study by IHL Group revealed a brighter picture than doom and gloom, concluding for every retailer closing their stores, five retailers are opening. That staggering number speaks for itself, but here are a few more reasons retail real estate is alive and well:
Clicks to Bricks
Amazon, the online behemoth used as the scapegoat for all negative happenings in the industry, is expanding its physical footprint with grocery and bookstore concepts like Amazon Go and the acquisition of Whole Foods in 2017. Why? If the entire industry is supposedly shifting online, then the opposite should be occurring.
In reality, retailers with an online and physical presence are the winners in the long run. An ICSC report shows that when a retailer operates in both spheres, it increases online and offline traffic and sales for the brand. This trend transcends Amazon, with online retailers like Untuckit and Casper announcing several brick-and-mortar locations in the coming years.
Children Are Our Future
In a recent guest blog post written by a member of the Generation Z cohort, the younger demographics prefer to shop in store based on both personal experience and research that supports this finding. “The key to attracting them is to make physical stores high-tech and all about the experience,” said the post.
ICSC found that 84% of Gen Z-ers most often use physical stores. With the oldest Millennials approaching 40 and Generation Z entering the workforce, these two generations are becoming the largest consumer base in the United States. To cater to these young shoppers, then brick-and-mortar cannot go anywhere anytime soon.
Evolution, Not Extinction
When the digital age brought e-commerce into our daily lives, most anticipated their share of the market was so formidable that it could not be challenged by an up-and-coming force like Amazon (think Sears). Those that underestimated this industry disruptor fell behind while others adapted.
Rappaport’s Director of Brokerage, Pat O’Meara, explains, “All the well-established retailers that have evolved in this new retail climate are doing so through smaller store footprints and increasing their online focus, among other factors. Successful brands’ online retail strategy does not hinder their brick-and-mortar locations – it complements them.”
For more information regarding our retailers who are expanding throughout the D.C. Metropolitan region (further proof the Retail Apocalypse is a falsehood), click here.