The real estate industry is one that has endured quite the cycle of ups and downs throughout the last few years. Trends of all kinds have come and gone, leaving behind results both good and bad. One trend that is making an impact on the real estate market right now is the proliferation of the online presence of retailers.
Known as e-tail, brick and mortar stores are increasingly being replaced or down-sized due to the heavy flow of business that is now performed on the internet. This has had a change, not only in how retail businesses are conducting operations, but also in how real estate agents who deal in commercial and retail real estate run their business as well.
Instead of relying on large, warehouse spaces to house products and attract consumers, retailers are now looking for places where they can accommodate this new trend. This was recently noted in a study performed by the National Association of REALTORS®, that found that neither shopping in a brick and mortar store nor internet shopping is heavily preferred over the other.
“This research speaks to the ned for retailers to focus their technology efforts inside the store,” said Dan Seliger, digital strategist for 3GTV Networks, in a blog post cited by the study. “We have to stop thinking of the Internet as something tethered to a home computer or a shopper’s smartphone. The goal should be a borderless communication continuum where every channel is connected. … Smart retailers can use this approach to help over come the inheren limitations of brick and mortar while offering shoppers a blended in-store experience built around their needs.”
Smart Retailers Need Smart REALTORS®
REALTORS® who are doing their homework on the changing face of retail are working to find spaces for their clients that are innovative and adaptive to their specific needs. As retailers are needed to provide a more blended experience, so are real estate agents. In many cases this involves finding space that has a smaller real estate footprint and the capability to be wired for various forms of technology.
Technology offers retailers the opportunity to more efficiently regulate inventory and space needs. Delivery and in-store pick up options are helping retailers to generate more sales per square foot, resulting in a much smaller store format. This will add to a great reduction in stores that follow the big-box format in the coming years.
With the added pressure of e-tail, retailers are looking for physical spaces for their stores that have little to no faults or weaknesses. Francis Rentz, managing director of Southland Commercial Advisors in Tallahassee, emphasizes that each site needs to have impeccable fundamentals such as visibility, accessibility, parking and favorable demographics to the business.
“A solid anchor tenant may get a project build, but a great location and greater design will be even more important going forward to sustain a project,” Rentz says. “As Yaromir Steiner said in a recent Shopping Centers Today article, ‘The place is the an-chor.'”