“One important question to ask is, ‘Why do we need so much merchandise in a store?’” Meitiner said. “People can buy online and pick it up in a store. Or they can go into a store and make a purchase and have it delivered at home. The blurring and integration of these lines shouldn’t matter to a company. You now need to serve every individual customer with an invisible linkage, not force them to buy the way they used to.”
Meitiner believes that a few years from now, COVID-19’s dissection of the retail industry might be seen as having elicited more good than ill.
“Digital disruption, changing behaviors of consumers, questionable viability of historically robust business models, the emergence of new players—those were all in place before the coronavirus happened. Good things come out of crises like these. It’s moved companies to achieve in a few months something that might have otherwise taken them five years,” Meitiner said.
One of the things sure to take place, he figures, is a new working relationship between landlords and tenants in retail real estate. National retail chains will be calling upon data to determine exactly what revenue they need to make at a store for it to be worthwhile in a certain mall or retail center. Five- and 10-year leases may cease to be standards.
“There is going to have to be a little more flexibility on the part of landlords. They like to have their rents set for long periods so that they can set out their balance sheets, but there’s going to be a shift in the way leases are created,” Meitiner said. “What needs to happen is more collaboration between tenants and landlords.”