Nobody’s Perfect
It’s always satisfying to look back and enjoy your professional successes. While I see nothing wrong with patting yourself on the back and basking in well-earned personal kudos, I have found that, from time to time, we must also remember where we’ve fallen short. Thinking about past mistakes certainly keeps me humble. More importantly, I’m almost always able to learn something from my missteps. After all, the more insight and information I can gather about why I was wrong about something, the more accurate I will be in the future.
I’ve been thinking a lot lately about retail trends from the past that I misjudged as fleeting fads. While I was right about some, I think it’s a great time to revisit the ones I got wrong:
Coffee Shops
Probably the single biggest misjudgment I ever made was in the early 1990s when I said that coffee shops were a “fad.” If they are a fad, they’re one of the most successful and longest-lasting fads known to man! Looking back on it, I think I underestimated the impact of two very important factors: first, they sell an addictive product, and second, coffee shops are selling more than just coffee; they are selling an experience. And, while their product offerings have certainly evolved, so too has the real estate for these shops. Almost all of them started out in small in-line locations, but now we’re seeing a number of freestanding, hard corner locations. Some national brands are even successful enough to overpay for prime real estate they just can’t live without.
Tanning Salons
When tanning salons were taking off in the late 1980s and early 1990s, I didn’t think they had staying power for one big reason: health concerns over long-term UV exposure. I think one of the reasons that tanning is still a relatively strong and enduring concept today is because they have expanded beyond the UV lamps and are offering “healthier” alternatives like spray tanning. And, perhaps because it’s a fragmented industry with lots of independent operators, there’s a considerable amount of real estate available for these salons at bargain prices, particularly in distressed or undervalued locations.
Frozen Yogurt Shops
I admit, it’s delicious, but I didn’t think it would last. Not only are frozen yogurt shops still here; we’re seeing a sudden resurgence as they develop more healthy alternatives for consumers. The fact that yogurt is still pumping out profits is a testament to the adaptability and flexibility of these retailers. TCBY was practically on life support in the early 2000s, but with their focus toward health, they’re experiencing a real renaissance. I also think that the shift by some toward the self-service model lends to smaller store formats and lower operational costs, which helps them stay alive in an otherwise competitive market. Today, the biggest expense for some yogurt shops might just be their rent.
While I’ve obviously been wrong in the past, it won’t stop me from making predictions about the future staying power of some of today’s hottest trends. I may look back in a few years and eat my words once again, but I’m willing to go on-the-record with my skepticism and say that I’m not sure these trends are more than just a flash in the pan:
Cupcake Boutiques
I think there are too many independent operators getting into this niche, and not enough talented and creative bakers. Cupcake boutiques, like frozen yogurt shops in the early days, run counter to the healthy lifestyle trend that drives so many of today’s consumer choices. It’s not a coincidence that the most successful names in donuts -- think Tim Horton’s and Dunkin Donuts -- have evolved into more than just donut pushers. Many are better known for their coffee, and continue to adapt their menus toward the healthier lifestyle.
Massage Therapy Clinics
It seems that one of the single biggest retail service concepts growing right now is massage therapy. My skepticism here is based mostly on volume concerns. Massage and wellness concepts are healthier than cupcakes, for sure! But with massage clinics among the nation’s fastest growing franchises, I think this concept is perilously close to becoming over-stored.
What do you think? Have you been wrong about new concepts and trends? Are there any current trends you think may or may not stand the test of time? Why? Email me at [email protected].
Jeff Green is president and CEO of Phoenix-based Jeff Green Partners (jeffgreenpartners.com), a leading consulting firm specializing in retail real estate feasibility, retail expansion planning, medical retail planning, location analysis and commercial land use.