Published in the November 22 – December 5, 2017 issue of Morgan Hill Life
In early November I attended a two-day seminar organized by the Silicon Valley Economic Development Alliance. Many of the panel discussions were centered on retail trends, multi-use buildings and “what works where.” One session covered the topic of online-based retailers moving into brick and mortar spaces. He has witnessed and assisted myriad of Online Unique Boutiques to arise as occupants for retail spaces.
Don’t just limit yourself to thinking clothing stores but expand these boutiques to include virtual gaming centers, furniture showrooms, and even rotating co-business spaces. Multi-use buildings will become the saviors of the future ghost town shopping malls. The previous formula for retail mall success was a strong anchor tenant (Macy’s, Nordstrom, J.C. Penny), and high density. With the rapid closure of large chainstores, the anchor tenants in the previous equation will now be replaced by a mixture of housing, entertainment, grocery, restaurant, hotel and a little retail sprinkled on top.
More generally speaking, the United States has been “over-retailed” and we are just now shedding light on the issue. Many of you have heard the whisper that retail is beginning to collapse. That information is both accurate and inaccurate. Retail is still vibrant in many communities. However, the dynamic of retail has changed. No longer are we seeing the construction of the Westfield Oakridge and Valley Faire large scale malls. Last year 4,000 major chain stores were closed. This year 9,000 stores have closed their doors. Next year the number of closures is expected to peak at 13,000 stores. According to retail professional Garrick Brown, the last stores standing will be the high-end brands and the low-end discounters. Further, unique boutiques and show rooms will be the way of the future. Take it from Nordstrom’s which is already ahead of the game with their first new retail concept “Nordstrom Local” open for business in West Hollywood. The store is the very essence of client customization with amenities that include a personal shopper, on-site alterations, nail salon, beverage bar and same-day delivery. Don’t mistake this for your average retail store. Instead, think on a smaller scale (3,000 square feet). Which customer base is helping to cause the shift in this retail trend? Yep you guessed it, the Millennials. This group is generally more interested with having experiences than acquiring stuff. When they do acquire goods, these goods are more likely to be unique in some way rather than being mass market.
With the changes in the definition of successful retail and the shipping/shopping convenience bar being raised ever higher by online-based monster companies, ahem Amazon, the future of retail looks uncertain to say the least. Garrick Brown phrased the future of retail like this: “There’s no room for mediocrity. Period.”
Brittney Sherman is the member and community relations director at the Chamber of Commerce. Reach her at (408) 779-9444 or at firstname.lastname@example.org.
Brittney Sherman is the Member and Community Engagement Director at the Chamber of Commerce. Reach her at (408) 779-9444 or at email@example.com.