Getting Creative with Retail Real Estate
As the retail landscape continues to evolve in response to an explosion of creativity and innovation from both new and existing brands, this is an exciting and inspiring time to be in the business.
Not only are we are seeing more retailers and restaurants experimenting and innovating with new concepts, services and product offerings, we are fortunate to be working along side many of them to find new ways to present and deliver those products and services. From new technologies and expanded creativity to experiential elements and environments, the world of retail is bursting with new ideas and new and old companies engaged in making them happen.
Consider some of the creative concepts and inspired approaches that have come on the scene or are currently in the pipeline:
An inspired new concept
A new Naples, Florida-based cigar lounge concept called Burn by Rocky Patel epitomizes this emerging generation of retailers determined to stake its claim by delivering a unique experience. For Burn, that goal is achieved both by providing a memorable and enduring sense of place, but also by offering something unique: a luxurious cigar lounge/bar where guests can enjoy fine cigars and premium spirits. From its décor and design to its top-shelf service, Burn is all about providing guests with a true escape — an environment and an experience that is unlike anything else. Burn presents itself as “the perfect place to enjoy life’s pleasures.” Guests can enjoy cigars from Burn Founder Rocky Patel’s full line, as well as cigar makers around the globe. Burn’s world-class humidor comes complete with private lockers for guests to safeguard their own personal inventory for future visits.
Dining out is in
The range of new restaurants and creative dining options is an eye-opening and mouthwatering reminder of the ascendance of dining in the retail hierarchy. Fast-casual restaurants have been particularly creative and many have successfully gained a foothold among a crowded group of competitors jostling for space in one of retail’s fastest-growing segments.
Among the many new or expanding fast-casual/experiential restaurants out there is Wok Box Fresh Asian Kitchen, which offers a fusion of different Asian cooking traditions in a fresh, healthy and made-to-order concept. The Canadian-based restaurant opened its first U.S. location in 2012, and today has nine locations across the U.S. with more than eleven additional locations in the “opening soon” pipeline.
Another purveyor of healthy fast-casual cuisine is Florida-based Tossed, a gourmet build-your-own salad concept that emerged organically (no pun intended) from a chef-driven bistro in New York to a brand with five U.S. locations and an eye towards international expansion. Healthy, fresh and premium ingredients are a recurring theme in many of these new fast-casual innovators, like Denver-based Modmarket, that combines fast-casual dining with made-from-scratch farm-to-table food in just minutes, and Atlanta-based Fresh to Order, which offers high-end salads, sandwiches and larger plates at a fast-casual price point.
What an experience
These days, experience is king, and retailers who can successfully introduce or enhance experiential elements are resonating with a customer-base that is eager for more. Retailers are targeting these experience-seeking consumers, particularly the much-discussed Millennial demographic, which is leading the charge when it comes to prioritizing experience as a commodity. A study by research firm Mintel, found that consumer spending for vacations and dining out is expected to spike by more than 25% by 2019.
It isn’t just the new names that are working the experience angle: several venerable retailers have started to configure themselves for experience-seeking consumer, enticing shoppers by giving them experiences along with their product. Target, for instance, recently partnered with fitness brand SoulCycle to offer consumers a unique opportunity: not only will Target collaborate with SoulCycle on a line of dual-branded clothing, but it will also open wellness shops within some of its stores, and provide free SoulCycle spinning classes at pop-up stores in ten different cities.
Nordstrom is also getting into the experience game, adding new counters to its women’s shoe departments where shoppers can design/create their own customized shoe. Outdoor retailers like REI make programming (from in-store demonstrations to group outdoor and fitness activities) a regular part of its operations, and fitness brands like Lululemon are finding similarly engaging ways to help consumers view their products as a gateway to a broader experience. Lululemon’s New York flagship now provides a health-and-fitness “concierge” to help shoppers find the right gym, design a customized running route, book a free exercise class, or find a healthy place to eat.
Real estate matters
As creative and innovative new experiential retail concepts continue to emerge and established retailers evolve and pivot in that direction, it’s clear that finding the right markets and the right sites for them to establish a foothold and expand and flourish will remain a critical priority. With ever expanding omnichannel competition and highly specialized products and services comes a greater need for strategic real estate planning. The days of if we build it they well come are long gone. But, the good news for developers, retailers, restaurants and consumers is that there is a new battle cry that is working today: If we engage them, not only will they come…they will stay and spend.
Spencer Bomar is a Principal with Avison Young where he coordinates the Firm’s national retail services group. Based in Atlanta Georgia, he has more than 20 years of experience in the retail real estate industry.
Avison Young is the world’s fastest growing commercial real estate services firm. Founded in 1978, the company comprises 2,100 real estate professionals in 74 offices, providing investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multifamily properties.