20 Dec ICSC New York Deal Making – Final Thoughts
Despite the myriad of reports lately, retail is not dead. Albeit declines in sales, the challenges for retailers, developers, and REIT’s span beyond just the bottom line. ICSC New York Deal Making made it clear: retail is not dead – it’s transforming. Overall, it seems that concepts once believed to be unsustainable are not only becoming more popular, but also the norm: food and beverage based retail and pop-up stores are here to stay.
Among the conversations in the retail industry are ways to appeal to younger demographics, and ways in which these demographics are shaping the retail and real estate industries. While retailers are consolidating, even shuttering their stores altogether, developers, property managers, and REITs are increasingly finding vacant spaces more difficult to fill. ICSC speakers and attendees noticed that apparel stores are no longer attracting consumers the way they used to; that now diversification is critical. Audiences want variety and convenience, unique design and experiential elements.
Beyond the need to diversify and the rise in popularity of pop-up shops and food and beverage retail, it’s become clear how these younger demographics are shaping the retail and real estate industries. Young, new brands are hesitant to commit to long term leases, as they experiment to figure out what works best for their brand. E-tailers are switching to brick-and-mortar stores as they leverage their online presence to drive foot traffic and in-store sales. The rise of popularity of food and beverage presentations and experiences continue to grow in the wake of social media. Now, more than ever, there is a corresponding need for technology, experiential elements, and brand narratives in physical spaces in order to stand out as a brand and attract the spending power of younger demographics.
If retail isn’t dead, the question remains: are retailers and REITs seeing a downward slope in their profits as a result of e-commerce, or as a result of their unwillingness (or inability) to accept the new normal?