Retailers that are embracing ecommerce are excelling in the market today and vice-versa. Whereas those that are either one or the other, are not performing as well as they could. In the current market it’s all about adaptation. The businesses that adapt thrive and those that do not are closing their doors.
The athletic brand Fabletics is an excellent example of that. Launching in 2016 as strictly ecommerce retail, it established itself in the market and now has over 50 storefronts throughout the U.S. and is planning to have over 70 by the end of this year (Santana, 2021).
Brands are broadening their scope
Target and other department stores like Macy’s have begun partnering with other goods and services to broaden their scope. Target now has Ulta, Kohl’s has Sephora, and Macy’s has incorporated Toy’s. Retailers need to entice the consumer who comes in for an online order pickup to stay a while and leave with more than they intended. That is why stores with a larger footprint are broadening their scope (Levy, 2021, 22:00).
Typically, family’s idea of doing something together is often aligned with entertainment and retail. Some believe that America is over retailed, but today that may not be the case as it was 10 years ago. Statistically, the retail footprint has increased only 4% from 2010 to 2020 and retail sales have increased by 42% (Levy, 2021, 26:15). By these statistics, maybe we have balanced out what was previously an oversaturated market.
Rebranding: Process, Purpose, Profit & Permission
Brands that have been around for a long time are rebranding themselves in order to make themselves relevant to the current market. For instance, Levi’s has an ad showing the grandfather, father and son all wearing the Levi jeans. With this image imprinted on its audience’s mind, it effectually broadens the scope of the Levi brand (Levy, 2021, 27:14).
Guest Speaker Danan Telsey, CEO of Telsey Group, proposed the belief that incorporating process with purpose will lead to increasing profit as well (Levy, 2021, 28:00). This is because so many of those who are Gen Z, are more willing to put their money toward a cause or purpose. If they can purchase something for themselves and also support or help someone in need, it’s a win-win situation. Further breaking this idea down:
Process: observe other brands and see how you can update your brands offering.
Purpose: create a connection that gives your brand purpose.
Profit: incorporate these methods jointly to increase your profitability and overall success.
Permission: tenants need permission to try new things to increase their profitability.
During the height of the pandemic tenants were granted certain permissions, such as the use of sidewalk space (that were not written into their lease originally), which allowed them to make an offering for customers and in turn helped to bolster their business in uncertain times (Levy, 2021, 24:55). Now the companies that have worked to adapt their process and purpose are not only surviving, but excelling. The question still remains, how can landlords and tenants work together to keep their doors open and businesses thriving in this ever changing market?
Telsey also addressed the supply chain issues. This macro issue affecting retailers at this time, is another topic all together. Shipping from Vietnam or labor at ports in California have seen major setbacks with shipments. Some solutions depending on your budget may include:
- Hiring airfreight
- Ordering sooner
- Hiring your own ship
- Using different resources to meet your clients and customers needs (until your usual shipment arrives)
Each of these have varying costs, which are then passed on to the consumer. Unfortunately, this issue is not a quick fix and will not likely see any type of resolution until at least July of 2022 due to the complexity of international laws and existing regulations that must be addressed.
Point being, continuing to incorporate new tactics and thinking outside of the box is what will help landlords and tenants succeed as the constantly changing parameters for the new normal persist.
This is blog was deduced from CBRE’s podcast Back in Black: Retail’s Recovery and Ongoing Revolution
Citation:
- Levy, S. (Host). (2021, Dec. 7). Back in Black: Retail’s Recovery and Ongoing Revolution (No. 83). [Audio Podcast episode]. In The Weekly Take from CBRE. CBRE News. https://www.cbre.com/insights/podcasts/twt-episode-246-back-in-black?utm_medium=email&utm_source=ExactTarget&utm_campaign=Weekly+Take+Ep+246
- Santana, S. (2021, May 14). Kate Hudson-founded clothing brand to open first SA store. Bizjournals.com. Retrieved December 9, 2021, from https://www.bizjournals.com/sanantonio/news/2021/05/14/fabletics-to-open-first-store-in-san-antonio.html.