Re-inventing Retail: It’s Not Just for the Big Guys

Re-inventing Retail: It’s Not Just for the Big Guys
Smaller Stores are Joining the Latest Retail Real Estate Trend
By Melissa Sievwright – VP, Marketing

In a previous post we shared some of the latest developments in the re-invention of retail – a chapter of our industry’s history that is being written right now. But in case you thought only businesses with mega budgets, like Reebok and Target, could be re-inventors, think again. Independents and small chains are that ready to get creative can transform retail, too. Many of the tenants in the shopping centers managed by Levin are starting to explore the possibilities. Here’s a quick look at some of the winning tactics in this growing retail real estate trend.

Going Hyperlocal Drives Shopper Traffic and Customer Loyalty
The connection between small businesses and their communities is a powerful one, and something that cannot be duplicated online. People are interested in what’s going on locally and prize locally sourced products. Retailers who want to stand out are tapping into this interest and partnering with their closest “neighbors” to bring shoppers into their stores for events and special promotions.

The Seven Most Popular Recipes for Small Store Re-invention
Keeping the hyperlocal connection in mind, re-inventors with small budgets are turning their stores into destinations. The most popular templates are proving to be:

1. Samplings, with food and beverages from local sources.
2. Art shows, with displays by local artists and crafts people.
3. After-hours shopping, with special openings for VIP customers.
4. Product demonstrations.
5. Holiday tie-ins (not just in December), with a special day in every month.
6. Classes, featuring everything from crafts to accessorizing.
7. Charity, with events that benefit organizations (the more local the better).

Successful Re-inventors Look Beyond Their Core Business
Whether a retailer is large or small, they must provide a compelling and relevant customer experience (“shopper-tainment”) if they want to re-invent. That means thinking of themselves as more than a supplier of goods or services. The big players provide great examples. Staples is a source of business support, not just a place to buy supplies. Reebok is not just about gym clothes, it is about a lifestyle. Following these models, a wine store becomes a source for entertainment ideas. A hair salon becomes a place for relaxation and “me time.” The wine store offers samplings from local caterers on Friday evenings. The nail salon has a free mini-massage day. This is re-invention at its best.

Social Media Powers Small Retail Re-invention
Not surprisingly, social platforms are proving to be the retail re-inventor’s best friend. They are being used to announce in-store experiences and for post-event coverage. Instagram and Pinterest, since they are so visual, are popular choices. Live broadcasts from events on Facebook’s Livestream and Twitter’s Periscope are trending as well.

These are exciting times for the retail industry. The big players are breaking the boundaries. But there also is a lot of creative action with a hyperlocal flavor at the grassroots level.

For more about re-inventing retail and smaller businesses, check out:
http://www.snapretail.com/blog/be-the-host-with-the-most-and-stay-under-budget/

http://www.retaildoc.com/blog/attracting-customers-to-experience-the-store-is-only-half-of-retail-success

http://www.nynow.com/industry-insights/how-to-create-amazing-in-store-events

Is the Department Store Dying or is this Evolution as Usual?

Is the Department Store Dying or is this Evolution as Usual?
Retail Real Estate Trend: Luxury Retailers Revive the Customer Experience


There are some questions in retail that never seem to go away. Among the most-asked concerns is the health of the traditional department store. Is this retail concept on life support? Have department stores lost their relevance? Are we in a post-department store era? Industry watchers, the media and even retailers themselves raise these queries regularly. As regional leaders in retail real estate, it’s an issue we keep a close eye on. Here are some of our recent observations.

In Retail, Change is the Name of the Game
Nothing in the retail industry is static. Since the first department stores opened in the mid-19th century, the concept has been evolving, driven by changes in economics, demographics, population migration and technology. Yes, in some cases the surviving department stores have lost their role as commercial anchors in America’s cities and even in some major malls. From the stresses on their middle class customer base to endless competition from smaller stores with unique product assortments, discounters, outlets, monobrands, club stores and online, these retailers face mega-challenges. Consider also that the ongoing cycle of discounting as a competitive tactic is eroding margins. No wonder we hear of store closings and stock downgrades and pronouncements of a post-department store era.

Can the survivors keep on surviving? It looks like they may have a fighting chance. Retailers will rise and fall as they always have. But the concept of a single space where shoppers can browse, discover and select from a wide range of items – and enjoy the experience – will likely go on. One caveat, however: if the retail icons don’t want to go out like the dinosaurs, they’ll need to continue evolving to meet customer needs.

The 21st-Century Department Store is Rising Thanks to Luxury Retailers
Department stores are writing the next chapter in their history. Many middle-market merchandisers are in transformation mode with heavy emphasis on technology. Most major players in this category, for example, have embraced omnichannel to meet the demands of tech-empowered shoppers and to counter online competition. A smoother shopping experience with electronic beacons and self-checkout counters is in the making. Smart mirrors are being featured in fitting rooms. And sales associates with tablets in hand can provide instant information about the entire inventory.

It’ll take more than tech wizardry though to reinvent the department store. High-end retailers may have found a winning strategy by restoring the joy of shopping. Neiman Marcus, Bergdorf, Barneys New York, Nordstrom and Saks Fifth Avenue are leading the charge in the U.S. Their goal, echoing the original concept of the department store, is to create a unique customer experience that goes beyond transacting. Listen to their executives and you’ll hear phrases like retail theatre and creative merchandising. To deliver those, they’re reimagining interior space with maximum aesthetic appeal, curating inventory, introducing new lines and designers, incorporating restaurants and wine bars into the retail environment, using pop-ups, and staging exclusive events. They’re exploring the concept of customizing each branch store with touches of local style. They’re doing things their online competition can’t. And they’re not neglecting technology. They’ve mastered omnichannel and moved into data mining to gain precise insights into the habits and preferences of their key customers.

Retail Real Estate Trend? Joy of Shopping at Middle-Market Department Stores
Middle-market retailers can’t (and probably shouldn’t) try to mirror the tactics of the luxury department stores, but there are signs they are scaling the joy of shopping concept to fit their markets. Ideas on the table include right-sizing space and upgrading interiors, improving visual merchandising, curating inventory to include exclusive brands, incorporating food and beverage service and upgrading staff. Localization of branches and unique in-store events, sometimes inspired by a chain’s flagship venues, are emerging. (Read more about this trend here: http://www.businessoffashion.com/articles/intelligence/whats-next-for-the-american-department-store.)

Back to the Roots of Successful Retailing
Is there a silver bullet here? Department stores may finally be on track to reclaiming relevance and appeal. They seem to be taking the advice of Macy’s Margaret Gitchell, one of retail’s first female executives. Her mantra was “never forget to astonish the customer.” That worked in the19th century and it may just be the key to surviving in the 21st.

Retail Property Managers Stress Corporate Citizenship

By Bob Carson, EVP, Levin Management

Green Products Help Both Business and the Environment
This month, more than a billion people in 192 countries are expected to take action to protect the environment in observation of Earth Day (April 22). Sustainability is always top-of-mind in the retail real estate industry, with property owners, managers and tenants all involved in the effort. At Levin Management, our property management services team is committed to using the best in planet-friendly products and processes.

Energy Efficiency is the Goal of Our Property Management Services
Energy efficiency has always been our top priority. Years ago, the emphasis was on controlling the expenses of heating, cooling and lighting the buildings in the properties we managed. Today, we’ve got a dual goal: cost-control and environmental sustainability, with a special focus on solar power, LED lighting and high-efficiency roofing.

Levin is in the final stages of our first solar project, at Capitol Plaza in Ewing, N.J. With Vanguard Energy Partners of Branchburg, N.J., a national solar construction firm, we’re installing rooftop panels at 1001 Spruce Office Center, the property’s office component.

We anticipate a significant drop in annual utility costs by supplementing electric power with this clean, alternative energy source. Besides lower bills, N.J. property owners, who install solar, benefit from tax rebates and sustainable renewable energy credits, which are market-traded certificates.

Based on our positive experience in Ewing, we’re exploring additional solar opportunities. A number of clients and larger big-box tenants have expressed interest in undertaking similar projects.

More Powerful LED Lighting is a Practical Energy Solution
LED bulbs are both energy efficient and long lasting. Their typical lifespan is four to nine years, depending on the specific use, which curbs the costs of both materials and operation.

We’ve been using LED lighting at shopping centers for years but were limited by their low illumination levels. Recent technological advances have corrected that problem. Now we’re transitioning all the parking lot lighting at Warren Plaza in Washington, N.J. to LED – with great results. We’ll be bringing LED lighting to other sites under our management soon.

New Roofing Products Provide Improved Insulation
Our property management services team likes the good news in roofing. The newest products on the market have a higher R-value, meaning they do a better job of limiting heat loss. That improved insulation equals less energy usage and lower heating costs.

New code regulations require that commercial owners use these energy-saving materials in both new construction and re-roofing. In other words, this sustainability measure is a mandate – not a choice. The catch? The cost of R-value materials is between $1.25 and $1.50 per square foot more than traditional products. Owners can expect to recoup that outlay over time with lower heating bills.

Roofs with a high R-value definitely make a property more marketable. More and more, prospective tenants – particularly national retailers – are looking for this type of roofing. They realize that, in addition to promoting sustainability, higher R-value roofs reduce operating costs. Many prospective tenants, in fact, will choose a property with an energy-efficient roof over one with traditional roofing.

Going Green Makes Good Business Sense
Earth Day reminds us of our responsibility for the environment. At Levin, our property management services team is always on the lookout for new ways to boost the value of the shopping centers we manage. We’re glad that many of the best measures for protecting the bottom line also protect our planet. Owners and operators who embrace these opportunities get a double win: enhanced property values and reduced carbon footprints. And those are both good things!

It’s an Omnichannel World but Retail Stores Continue to Rule

Consumers Love Online but Still Prefer Shopping at Bricks and Mortar

You know there’s a big retail real estate trend brewing when Amazon, the premier pure play online retailer, announces a plan to open 300-plus book stores. Yes, that’s stores, as in bricks-and-mortar establishments. Market tests of on-campus locations and pop-ups in major cities preceded their February 4 announcement. Amazon’s move is an important indicator of the increasing success of omnichannel and an acknowledgment of the role of the physical store in branding and building sales in concert with online and social media. But the successful bricks-and-mortar establishments of the new omnichannel era we’re doing business in are not your grandpa’s retail store. Read on for a quick glimpse of what’s happening and what’s ahead.

The Traditional Store is Morphing into an Omnichannel Hub

As a leading retail real estate company and one of the top construction management firms in the Northeast, Levin is excited about the coming changes in store design. And, of course, we’re pleased that bricks-and-mortar establishments continue to be favored by America’s shoppers. (Over 90 percent of the transactions in December 2015, in fact, took place in a store, according to the ICSC). http://www.chainstoreage.com/article/icsc-omnichannel-wins-physical-stores-epicenter

As one ingredient in the omnichannel mix, stores now and in the future will have to offer more than just physical access to merchandise. Today’s consumers tend to have pre-shopped online and expect the store to be just one element in a seamless purchasing experience. Store design and construction will have to accommodate “click and collect” purchases made online and picked up in-store, plus returns and exchanges – that means easy in-and-out and space to hold pre-ordered merchandise. The demand for same-day delivery will have implications for parking and loading vehicles.

Information-on-Demand and an “Entertaining” Environment: Retail Real Estate Trends to Watch

Omnichannel shoppers expect web-supported shopping. That means kiosks and touch screens that let them check product availability and place orders, plus store associates with tablets to provide up-to-the-minute information and hassle-free checkouts. As a model store environment, think Apple.
Virtual fitting rooms and same-day delivery are predicted to shrink the selling floor, with more space going to lounges for food and beverage services that rank high, especially with Millennial shoppers. Since omnichannel shoppers prize the VIP treatment, expect to see more sensors, beacons and other electronics that will allow a retailer to deliver coupons and points to mobile phones and direct shoppers to merchandise based on their purchasing profiles. Retailers on the leading edge of omnichannel have already introduced these in-store features. Take a look at Crate & Barrel, NordstromStarbucks, and Top Shop to name a few. Expect more to come. https://erply.com/case-study-how-you-can-copy-nordstroms-secrets-to-massive-retail-success/ and http://insider-trends.com/why-omnichannel-is-the-elusive-holy-grail-of-retail-and-three-retailers-who-have-found-it/

No Longer a Secondary Player, Logistics are Now Key to Omnichannel Retailing

Click and collect and in-store online ordering, both with demand for same-day delivery, have placed new importance on logistics. Warehouses and distribution centers will need to be in closer proximity to stores. Some retail real estate trend watchers predict that large warehouses will become the hub, with smaller centers near stores serving as the spokes in the delivery wheel. The possibility that retailers may supplement their flagships with pop-ups or small specialized boutiques will mean further logistical challenges. http://www.inboundlogistics.com/cms/article/new-retail-strategies-its-a-store-its-a-site-its-a-warehouse/
Warehouses, whatever their size or location, are facing changes driven by the fulfillment of small individual orders with quick turnaround. The impact on IT, employee levels, building design and configuration, and transport are massive, along with the need for acreage in densely populated areas. Retail real estate and construction management are certain to feel the effect of these changes in logistics.

Every Step in Omnichannel Leads to Another Step

The convergence of the virtual and the physical in retailing is just the beginning. As that blend is achieved, new doors are opening. Retailers and the businesses that service them will have to walk through those to succeed in the evolving and complex world of multichannel.