Retail is in the midst of a transformation as new technology, experiential concepts, and shifting consumer preferences fuel changes in existing retailers and drive the rise of new ones.
Nowhere was this more evident than at ICSC’s RECon, the biggest retail event of the year. We sent three of Metro’s Rookie Brokers (Sales Associates)—Niklas Markley, Samuel Thiers, and KJ Kulik—to Las Vegas to report back on the show.
Here’s what they learned about technology, changing retail concepts, and the overall outlook for retail in 2019 and beyond.
1. What are your top three takeaways from RECon? Can you provide a takeaway for retailers, landlords, and technology?
Niklas: Retailers: Many retailers are moving toward customization. As experiential retail becomes trendier, customizing the retail experience will keep customers coming back.
Landlords: They seem more willing to negotiate on terms and are willing to take a chance on start-ups as some of the big name retailers continue to shut doors for good.
Technology: I came across a robot that could travel up to two miles away from the distribution center carrying packages to people’s homes. The company is working with elevator manufacturers to gain access to their servers to keep connectivity solid throughout busy cities.
Samuel: Retailers: Companies such as Starbucks and Home Depot are heavily relying on mobile orders in their business models.
Landlords: They need to get creative when leasing space with more “interesting” retail such as food halls, experiential showrooms, and entertainment concepts.
Technology: Consumers are more reliant on smartphones and more retailers are developing mobile applications as part of their business model. Starbucks, for example, has seen mobile ordering transactions increase eight percent in the past two years.
KJ: Retailers: They seem to have more power/leverage at the moment. Medical clinics and fitness users are expanding at unprecedented rates.
Landlords: They will pay more for a well-positioned and innovative retailer. Clicks-to-bricks are finding an easier time making deals with landlords who see the value in what the concepts bring to their center.
Technology: Data has become extremely valuable and will continue to be used to enhance shopping experiences.
2. What are some of the major themes that dominated the convention floor or breakout sessions during the conference?
Niklas: Experiential and customizable retail has been the big wave recently and it was quite apparent at RECon in Las Vegas.
Samuel: Large retailers such as Walmart are fighting back against Amazon with localized distribution hubs, handpicked in-demand inventory, and customer consultants.
KJ: “Less traditional, more innovative” seemed to be a theme of the show, as it was clear many of the retail concepts were thinking outside the box in their designs, strategies, and even menus. The target customer for 2019 looks a lot different than one from 2000 or even 2010.
Customers want experiences as well as material items that are personalized. We even see personalized food becoming more and more successful with companies like MOD Pizza and Chipotle providing made-to-order products with various options accommodating different diets.
3. Did you learn anything new about how retailers and landlords can benefit from technology? Are there any new tools you’ve discovered as a result?
Niklas: Faster, same day delivery seems to be a trend, whether by a robot on wheels or a drone dropping off food at your front door.
Samuel: Millennials are using mobile apps set up by retailers more frequently for purchasing. Certain retailers may not have that accessibility and thus are not utilizing all platforms to their advantage. Retailers and landlords can benefit by adapting their business models and realizing this trend sooner rather than later, especially as millennials continue to enter the workforce and exercise a higher spending power.
KJ: The company Marble put on a great display of its delivery robot, having it run by itself down the halls of the convention center and use its sensors to stop and avoid any foot traffic along the way. With robots such as these taking over the “last mile” of the delivery supply chain, retailers may be able to meet consumers’ increasing demands for next-day or same-day product delivery.
4. Did any new retail concepts emerge at the show?
Niklas: One that was new to me was the FlowRider concept. The company started out making “surf” machines for water parks and now they are looking at opening some of their own locations.
KJ: I learned of companies like Storefront that refer to themselves as the “Tinder of retail” and use data and preferences to match landlords with tenants. It’s being used by pop-up shops that prefer to sign short-term leases and have flexibility. It can be perfect for the landlord as well to fill space and bring in revenue while focusing on long-term solutions for their retail space or shopping center.
5. What are your retail predictions for the rest of 2019 based on what you learned at the conference?
Niklas: I believe the retail market will continue to rise as online retailers look to open brick-and-mortar stores, and more and more local mom-and-pop shops will start popping up or look at adding additional stores with rent prices staying steady or falling in some cases.
Samuel: The retail landscape will change as millennials enter the workforce and baby boomers leave. Luxury and more mainstream companies and brands will begin to see growth in sales that will slowly increase over time.
KJ: I predict a strong 2019 and a strong next few years for retail as successful companies adapt to the “experiential retail” model and the ones unwilling to change get left behind.
Vacancy rates are moving in a positive direction for landlords and with so many innovative retailers setting their sights on large-scale expansion, we’re in store for a new wave of concepts that are built to endure in today’s retail environment. More retailers are opening stores right now versus closing, which is showing people that the retail apocalypse may have been blown far out of proportion.
6. How will you apply what you’ve learned at the show to your work at Metro?
Niklas: According to multiple sources, there were roughly 40,000 people in attendance in Las Vegas. The minority of which were brokers. To us, this means that most attendees were potential clients. A broker’s book of business can largely depend on the people you meet and connections you make at RECon, especially in the early going. Furthermore, by walking the show, you can discover retailers that are not in our market and make connections with those who want to be here. While the deal-making portion of RECon is valuable, the best things to bring home with you are strong connections.
Samuel: Understanding economic changes is crucial to understanding current consumer behavior. It is important as a new Sales Associate at Metro Commercial to understand economic trends and how they will impact the retail market in the future.
KJ: One thing I was able to get a feel for at the show was the energy and enthusiasm that many of these real estate professionals carry with them to every meeting. I was able to absorb new information about retailers, landlords, and markets far away from the ones I know in New Jersey and Pennsylvania.
Going to this show and interacting with professionals from across the country is one of the best ways to gain perspective on other markets and the retail industry as a whole. Additionally, this conference really showed me how valuable it is to form a network in this business. Deals can come in all shapes and sizes and growing your professional network can only lead to good things.