Small Business, Services, Replace Traditional Anchors
There’s been a lot of hand-wringing in the retail industry of late as traditional anchors struggle in the new economy. Clever ideas and novel concepts, however, are doing well in their place, and more shopping centers around the country are taking notice. There’s lots of space to fill in a vacant anchor location, but some malls have been doing nicely by getting creative with food and other services in their place, having a positive effect on occupancy rates. That’s according to a recent article on ICSC’s TheCenterOfShopping.com. “Over 95 percent of the new retail leases signed during the fourth quarter were for small-shop space, resulting in a small-shop lease rate of 91.2 percent for the same-store pool and 89.9 percent for the retail portfolio, up sequentially 80 and 100 basis points, respectively,” said Retail Properties of America, Inc.’s Shane Garrison, executive vice president, COO and chief investment officer.
Out: Long-Term Leases; In: Flexibility
Change in the retail industry isn’t limited to the size of stores or the technologies utilized. No longer considered a “fad,” pop-up stores are starting to become more common. Retailers are reconsidering their market and demographics, and learning to adjust to their tastes and needs. The pop-up gives them the ability to change more rapidly to appeal to their desires at the time. A recent article on Glossy.co, a publication covering fashion, luxury and media, noted that, “According to PopUp Republic, a retail marketing database, the pop-up industry was valued at $50 billion in 2016. Meanwhile, in its 2017 outlook report, CBRE forecasted that the future of physical retail would look like ‘rogue retailing,’ a model that requires more flexibility on the behalf of both landlords and retailers.”
Case Study: Home Depot Builds Success In-Store and Online
For some, the seemingly endless aisles of everything for the home can be quite daunting; for others, it’s the earthly equivalent of a DIY heaven. Home Depot has become a leading home products retailer both in the real world and online. The company serves two primary markets: home do-it-yourselfers and professional contractors (3% of its customer base but 45% of its revenue). As a recent case study article in Adweek magazine, Home Depot is also one of the largest U.S. ecommerce retailers, but hasn’t lost sight of its in-store experience for its consumers, who “bring in a spark plug for [their] 1979 snowblower and say, ‘I need one of these.’ If the associate doesn’t know the answer to that, [they’ll] be disappointed.”
Visit DMM at ICSC’s RECon 2017
DMM will be at RECon 2017, the ICSC’s convention that brings together retail real estate professionals from around the world. The show gets underway May 21st and runs through the 24th at the Las Vegas Convention Center. Come visit us at our booth (#N1329) and learn more about our DMM Retail Boundaries products. Get a personal demonstration, find out what’s in store for ShoppingCenters.com online access down the line, or just come by and say hi.