Direct-to-consumer brands drive mall boom
The pandemic is back in the headlines, casting a shadow over a struggling retail industry.
But consumer spending remains robust. This is the good news. Even better news: This year there has been, and is expected to continue, heavy investment by brick and mortar retailers, especially online merchants.
The mall may have died (or turned into the Amazon
There are many reasons. Among them: the rents of open-air centers have fallen; online customer acquisition costs have become so high that physical stores are a better use of capital and a more effective branding tool; and the lingering pandemic has made buyers wary of large indoor sites.
The most common reason given by digital native retailers is that while shopping online is convenient, it is not personal. So these retailers are hitting the bricks, coming to a neighborhood near you.
Amazon alone is expected to open more than 3,000 physical stores over the next two years, according to Adam W. Ifshin, an industry insider and CEO of DLC Management Corp. Amazon Fresh
The list of retailers that have announced expansions this year is long, and the number of planned store openings is on track to far exceed closures.
The majority of all these new stores are opening in strips, exteriors and so-called “power centers” – anchored by big box retailers. In fact, it looks like a renaissance is brewing in what was once a mundane category.
Companies like Macy’s
Shopping malls and department stores are not coming back, but malls have become the new game in commercial real estate.
Public operators have seen their prices soar. Site center sharing
Meanwhile, established national brands are experimenting with smaller sub-brand concepts. Lowe’s
Dick’s Sporting Goods
One of the main benefits of meeting clients where they live rather than online is the ability to develop in-depth data. When customers visit stores, retailers have the opportunity to gather real reviews, information about specific markets, information about specific products and lines, and about specific demographic groups within geographic markets.
The line between digital and physical is blurring more and more, but one thing remains, the customer must remain at the center of the conversation. Listening to them daily through as many channels as possible and giving them what they want ends in everyone’s happiness.