By Michèle Rafferty - 21st April, 2021
On October 14th, 2020 The Goodman Center for Real Estate at LeHigh University hosted a panel about the future of retail. It posed a question that was already top of mind before the pandemic put additional pressure on the already challenged retail sector: “Who will fill all the empty stores on Main Street, in cities and malls?”. The event was presented by co-host Tara Stacom, Executive Vice Chair of Cushman & Wakefield and was moderated by Melissa Marsh, Founder and Executive Director of PLASTARC. Six panelists with unique backgrounds offered their perspectives:
Barrie Scardina, Head of Retail for the Americas at Cushman & Wakefield. Scardina is a thirty year retail veteran who started work in stores at the age of 16. She has a passion for the industry, especially in operations retail, and was recently President of Calvin Klein.
Liz Edmiston, CEO of Dynamite Group. A graduate of LeHigh University, where she majored in International Careers, Edmiston started her career at Bloomingdales. From there, she went on to become the Chief Brand officer for Calvin Klein Asian Pacific, and lived in Asia for the past 6 years.
Phil Colicchio, Executive Managing Director of Cushman & Wakefield. Colicchio developed his legal skills in the restaurant industry and now co-leads the specialty food & beverage and entertainment practice at Cushman & Wakefield. He is also faculty at the Culinary Institute of America, teaching Legal and Real Estate Strategies in the Masters Program.
Stephanie Lee, Founder of Spaceus. Lee is a recent graduate of the MIT School of Architecture. She founded her company with a former classmate after being dismayed by the many vacant storefronts they saw in Cambridge. To drive foot traffic to hollowed out Main Streets, her company transforms these unused properties into shared work spaces, pop up spaces for small businesses, and spaces for cultural activities.
Garrick Brown, Chief of Retail Analytics at Cushman & Wakefield. Brown studied the Arts at the University of California and has transferred his communication skills into E-commerce.
Naveen Jaggi, President, Retail Advisory Services at JLL. Jahhi graduated with a Finance Degree and then worked as a salesperson and clerk in a video store, which he subsequently bought, then later sold to Blockbuster in 1989.
Panelists presented their views on how the COVID-19 pandemic has affected retail, discussing both the initial disruption and possible paths forward for the sector.
Edmiston observed that younger consumers, from their teenage years to their early 20s, shopped online earlier during the pandemic but were already going out to stores again to shop. Meanwhile, slightly older customers who may be living alone or working at home have largely shifted their buying habits entirely to E-commerce.
All the panelists agreed that buying trends have changed. Brown explained that online grocery shopping had gone up by 10% and that online purchases of home improvements, sporting goods, office supplies, and electronics had also risen. At the same time, restaurant business has declined by 25%. Theatres are also struggling, as are apparel industries serving the business and wedding markets.
The trend of E-commerce purchases of home based goods is real, but it remains to be seen whether or not it will be sustained. While many large grocery stores have been able to continue servicing their customers, this has come at a price. Grocery stores can’t rely on their uptick in top-line sales. It simply won’t work for all businesses. Technology will be the divider between who will survive in the next 5 years, and small businesses will need help adapting.
Colicchio emphasized the devastating blow to the independent restaurant industry. Although delivery and pick-up transactions have reached record numbers at establishments like Domino’s, this isn’t something that most businesses can rely upon. The future for this industry indeed will be slow, and Real Estate depends on restaurants more than the other way around.
Traditionally, big profits were dependable in urban retail. However, with the shift of millennials and empty nest boomers to the suburbs, the future of retail is going to look very different.
Scardina explained that retailers need to focus on the fundamentals again. That means making sure the right product is being sold, marketing is effective, and engagement with customers is sustained. This will be essential to keeping people coming into stores. Part and parcel with that is seeing what consumers care about, whether that is sustainability, race relations or politics, and prioritizing that accordingly. Brands must be easily discernible and communicate their values clearly. And of course, great customer service remains essential. Proper training will facilitate that. Increasing efficiency in the use of space is essential.
Jaggi described how pre-pandemic consumer behavior differed from current patterns. Previously, six stops in the mall was the norm. Now it’s only three. Consumers want safety and are staying close to home. This means less impulse buying. Lee highlighted that addressing this will require retailers to create spaces that express care and where people can gather outdoors, as well as generally making retail environments more hospitable. Colicchio echoed this sentiment, and talked about how some developers have created food halls that draw upon local artisanal producers.
Edmiston stressed the importance of technology in supporting stores. For example, if consumers use an app, businesses can analyze their shopping trends and see whether they shop online or in store. Retailers need to make shopping purposeful, meaningful, and convenient. This means the future of the industry will depend on experimenting with new retail spaces, and will include curated pop-up stores—a kind of localised fulfillment center.
While the retail industry faces many challenges, there are also exciting developments on the horizon. The current period of uncertainty may well lead better experiences for customers and retailers alike.
