Predicting Retail’s Future

The changing retail landscape will create new winners and losers, and retailers and landlords who understand consumer expectations will be more successful, said JLL, Chicago.

JLL surveyed more than 1,500 adult consumers to find out which trends will have the biggest impact on the retail sector’s future. “What did they tell us was most important to them? It wasn’t magic mirrors or robot sales clerks,” JLL’s The Future of Retail report said. “More than anything, they want skilled customer service, personalization and convenience.”

The report noted nearly 40 percent of shoppers expect to see new and innovative retailers in their shopping centers in the next 10 years. More than one-third want to see more entertainment and dining options and just over 15 percent want to see non-retail uses mixed into their shopping centers.

“Customers will be demanding more from where they shop,” JLL said. “It’s not enough just to update the store roster once every 10 years. Keeping a finger on the pulse on new brands and concepts is key to maintaining a loyal shopper base.”

The report suggested shopping center landlords may need to think beyond typical leases. “Some new emerging brands are not ready or able to sign long-term leases but have enough of a following to make a short-term lease worthwhile,” JLL said.

Despite the rapid growth of e-commerce, more than 90 percent of retail sales still take place in physical stores and shoppers want to interact with knowledgeable sales staff, the report noted. “These interactions happen within the walls of the store,” it said. “In this age of heightened competition, shoppers are inundated with options but helpful customer service can build brand allegiance. A little more than half of all shoppers said that personalized service from a store associate was a deciding factor in where they shopped.”

In addition, growing demand for memorable experiences has led to more entertainment tenants in retail centers, including movie theaters, e-sports venues, performance spaces and even adventure-themed destinations. “Generation Z is driving this demand for adventure-themed entertainment like indoor skydiving and arcades,” JLL said, citing Urban Air Adventure Park, a retail center occupant with climbing walls, trampolines, indoor skydiving and laser tag. Urban Air Adventure Parks generally occupy between 25,000 and 50,000 square feet and average 15,000 customers per month. The concept plans to have 300 locations open by 2020, the report said.