June 12, 2017

Create better retail spaces

The rise of online retailers like Amazon has had a direct affect on the world of brick-and-mortar retailing. It started with the decimation of booksellers and has helped lead to the troubles of old-school retailers like Sears, several big box stores, and destinations like Worcester's Greendale Mall. The days of people shopping for certain goods in physical locations may be on the way out, but smart developers still can attract a robust retail customer base.

Case in point, the owner of the former Kmart strip mall in Milford off exit 19 of I-495 is spending $20 million to convert the now largely vacant plaza into a more upscale retail destination called Milford Crossing. Rather than attracting another big box store to fill the main space, developer RD Management is relying on a Stop & Shop grocery store as an anchor and working to bring in more restaurants to leverage the steady traffic.

The key behind RD's Management's renovations and new tenants is the company is replacing a retailer no longer in demand with a strong new anchor largely immune to online shopping. While consumers can buy groceries online, it is hard to imagine a future where people won't want to see and be able to hand pick items like fruits, vegetables, meats and seafood. As for restaurants, the industry looks strong. According to the National Restaurant Association, Massachusetts restaurants will do $17 billion in sales in 2017 and grow their workforce 8 percent over the next 10 years.

Picking the right mix of operators for any retail setting may not be a layup, but you can have an Amazon-proof niche. Other retail establishments falling in that category include exercise centers, walk-in medical clinics, and even merchandise retailers like TJX or Dollar Tree who rely on freshly discounted, high turnover inventory.

Banks, apparently, have figured out this trend of providing customers with what they want out of retail locations. Even with the rise of mobile banking technology, branches are still in high demand – reaching a record high of 1,325 branches in Massachusetts in 2015, the most recent year available – but customers aren't using them as much to deposit checks and get cash. Rather, branch customers are looking for fulfillment to more complex financial requests – like loans and retirement accounts – so banks are ditching the teller-driven model in favor of offering a more highly trained workforce capable of meeting these demands in a friendlier setting.

The lesson here for all businesses is even as your customers' habits and needs change as a result of new technology and economic forces, you can keep them coming through the doors by evolving and giving them what they are looking for.


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