America’s $3.5 trillion retail sector is going through tough times. E-commerce has cut into the conventional brick-and-mortar market by roughly 12 percent, an impact that has decreased rents, increased retail vacan- cies and left landlords increasingly anxious.
But even in this period of widespread adjustment, the number of store openings nationwide has outpaced closings. We see this in Fairfield County, Connecticut, with first-quarter vacancy rates in 2018 totaling 3.7 percent, 30 basis points lower than one year ago, according to CoStar Group.
The retailers that aren’t surviving are those that aren’t adapting to con- temporary market dynamics. Techno- logical and social disintermediation create the chaotic decision-making process of adapt or perish. Still, amid today’s anxieties, here are three examples of adaptation that offer promise.
Selling an Experience
Stores that are succeeding today are often the ones that have realized that retail is now less about selling goods and more about selling an experience. Below we offer two examples in Fairfield County, both designed to add a stimulating overlay of experience into typically more tepid retail settings.
Skip Lane
Director,
Cushman & Wakefield
The first illustration of a retail experience is the indoor adventure ropes course located within furniture and mattress retailer Jordan’s 150,000-square-foot showroom along New Haven’s Long Wharf. Touted as the largest in the world, the course includes two 60-foot high ropes courses, four 200-foot zip lines, a 200-foot suspended catwalk and a liquid fireworks water show offering Connecticut shoppers much more than the traditional shopping experience. This is clearly not just shopping for furniture.
Retailers Get Creative
A second example of experiential retail is represented by General Growth Properties’ (GGP) forthcoming SoNo Collection in Norwalk, a 728,000-square-foot, $525 million mall scheduled for a fall 2019 opening. The CEO of the company, which has agreed to be acquired by Brookfield Property Partners, has mentioned the venue’s appetite for nontraditional attractions. Various news reports have pointed to the prospect of rooftop gardens, sculptures, restaurants, a health club and potentially a museum.
So, zip lines, liquid fireworks, gardens, food courts, health clubs, concerts, entertainment and the arts. Sure, some of it isn’t terribly new, but creative retailers are doing whatever it takes to infuse experience into shopping and trigger a physical visit.
Carl Wunderlich Director, Cushman & Wakefield
Our second observation relates to the continuing promise of destination shopping at locations like the new 325-unit Atlantic Station apart- ment tower in downtown Stamford, which was developed by Cappelli and RXR near the Metro-North station. Cushman & Wakefield is poised to prepare the first leases within its 17,000-square-foot bloc of street-level retail. As recently reported in the Stamford Advocate, the space has attracted interest from a range of pro- spective tenants including banks, res- taurants and gourmet grocery stores. The value-add strategy here, in the daunting e-commerce age, is to work hard to leverage the full potential of transit-oriented retail. The best merchants will resonate strongly with the complex’s new residents. Retail leasing must deliver tailor-made amenities and services that make both a structural and satisfying contribution to a community.
Civic Support
The third example of new thinking amid the cacophony of retail clicks is seen in the tighter connections being forged between city halls and chambers of commerce.
Naturally, the synergy between municipalities and businesses goes back centuries, but now retail is feeling competitive heat from the Internet. If Main Street’s stores fail, Main Street fails too. Tax revenues decline. Boarded-up stores convey messages of civic gloom.
Blaine Stiegler
Director,
Cushman & Wakefield
In response, organizations like the Westport Downtown Merchants Association have been joining forces more closely with municipal leaders. Together, they’re not just marketing stores and products, but marketing Westport itself, with initiatives to enhance community streetscapes, improve Westport’s overall appeal and gear up for competition with SoNo.
It’s tough out there for retailers. The business of selling commodities to consumers is getting marginalized. The new challenge for brick-and- mortar stores is making shopping experiential, fun and discovery-like.
For decades the retail sector enjoyed a relatively change-free playing field. One thing is for certain, there is change afoot and those who adapt and adopt will flourish.
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Contact editor David Cohen at [email protected].