Omni-channel: transforming the retail landscape
Dutch Real Estate Predictions 2016
New technologies and new ways to connect with consumers are transforming the retail sector. Consumers are increasingly taking non-linear path to purchase, combining both traditional store and internet channels. Accordingly, retail sector square meter has decreased due to changing retail buying patterns, the efficiency of omni-channel distribution and the changing behavior of millennials. To compete effectively, traditional retailers should reimagine how they create and capture value.
January 21, 2016
Implications for retails’ real estate strategies
This approach defines the omni-channel environment and has implications for retails’ real estate strategies in terms of store locations, footprint, warehousing, logistics and fulfillment.
Retailers are embracing technology like never before to enhance both their brand and customer experience. Unlike the past, retailers position physical stores differently and consider them to be a part of the seamless omni-channel customer engagement model, rather that the ‘only channel’. Commonly referred to as concept stores, they blend physical inventory, online access and experiential retailing to customize and enhance the costumer experience. With the focus on converting existing stores into concept stores, real estate owners will have to support technology-enabled retailing.
Furthermore, retailers will also potentially benefit from continued increase in the use of mobile and social media. A projected 65 percent of the global population will be using a mobile phone by 2016 and an estimated 83 percent of internet usage will be through handheld devices. It is no surprise then that mobile retailing is expected to continue to grow aggressively.
Real estate owners need to understand technology needs
The conventional retail real estate approach is largely based on strategic locations; today, however, retail property owners need to continue evolving their “shopping experience through the addition of food, entertainment and a wide array of retail offerings. For this, real estate owners need to partner with tenants to understand their technology needs and incorporate them as integral to store redesign. And those technology needs extend to more than just the store front; understanding big data will be a key driver of long-term retailer prosperity.
From a real estate perspective, the retail industry is undergoing a profound change. Physical stores remain core to creating an innovative and long-lasting shopping experience, but they are no longer the sole touch point for a retail brand. Instead, stores are positioned as part of the omni-channel customer engagement model, combining physical inventory, online access and an environment that is customized to enhance the customer experience. Much of the real estate portfolio for retailers will not be expanding, but undergoing redevelopment as existing spaces are transformed to provide that unique store ambiance. It is a matter of not just reducing and reinvesting, but also reimagining and repurposing retail space.
Dutch Real Estate Predictions 2016
- Big data in real estate: too big to ignore
- Omni-channel: transforming the retail landscape
- Asian investors raise their stakes in Dutch real estate
- Construction: significant rise of new residential projects
- Logistics: technology is redefining the retail supply chain
- Changing legislation creates opportunities in healthcare
- Real estate steps up as a key tool in the battle for talent
- Blockchain: the next game changer in real estate?