Retail is dead and it’s all Amazon’s fault! Or so the narrative goes. Amazon specifically and online shopping in general has undoubtedly changed the game in terms of mom and pop shops and malls, but the retail obituaries are premature. Retail is rapidly evolving, and that change is creating exciting opportunities for entrepreneurs and local shop owners. By analyzing new shopping habits a few key adjustments will make sure brick and mortar shops have a future.
Younger shoppers clearly have short attention spans and are more interested in experiences over materials. This means that stores must be far more aesthetically pleasing with cashiers morphing to more of a concierge role. Banks have been using this method as they reduce the size of their branches and reducing the number of tellers in favor of ATMs. However, they have far more greeters who help customers discuss a wide range of financial options. Banks have also done well with integrating technology with physical locations. Increasingly people use apps to do their everyday banking so when they do walk into the branch it will be for something out of the everyday. This how other retail sectors should use their apps. Apps are becoming an essential tool. Savvy retailers use the app to get their customers to the store. Even if it is just to pick up a product they already purchased or to take a picture with some branded content to share on social media. An all-encompassing experience will get a consumer out of their home, a routine purchase won’t.
Malls have been capitalizing on the “experience” movement by moving away from relying on large anchors and looking to create more wide-ranging entertainment and dining experiences. Adding local flavor to well known chain stores serves as a break from the sterile monolithic structures that consumers are tired of. If someone walks into a Chick-Fil-A in Queens, they should know they are in Queens. This is a change from the “you could be any ware” style chains used for decades. Increasing farmers markets and pop up shops while prioritizing hiring from the local communities has ensured that malls maintain their place as community centers. This is also why throughout the country, colleges, medical clinics, and gyms are leasing spaces in malls. Prioritize the community and let the commerce follow not vis versa.
However, it is not just the merchants who need to evolve with changing consumer demand, the property owners need to make changes as well. Too many landlords are using outdated models in negotiating leasing. It is a major reason there are so many vacant storefronts. The change in consumer behavior means a store’s ability to turn a net profit has been reduced. Landlords need to adjust accordingly and reprice the value of their asset. The pop-up shops and short term “trial” leases are good starts, but more is needed.
Lastly, the government (especially at the local level) needs to stop overregulating small businesses. Through nickel & dime taxation, constant changes to labor laws, multiple levels of red tape, and so on, opening and maintaining a small business is a herculean effort.
If branding is the key to success than rebranding is the key to survival. The malls and shops that rebrand themselves to meet consumer demand will excel.
*Note this article is based on a forum co-hosted by the Queens Chamber of Commerce and Queens Center Mall on 6/6/18.