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12/03/2020

What the pandemic hath wrought: five key trends

Al Urbanski
Real Estate Editor & Manager
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One of the hallmarks of the pandemic might end up being the true launch of drone delivery.

For years, Phillips Edison’s national accounts and emerging trends team has been doggedly cataloging new trends in its neighborhood retail centers, but not as dogged as during COVID-plagued 2020.

“In the face of significant challenges, retailers have been finding more creative ways to engage with their consumers, and this has naturally accelerated the trend toward employing omnichannel strategies,” said Mike Conway, VP of national accounts and retailer partnerships at PECO, which owns and or operates more than 300 centers in the U.S.

Here are five key trends the PECO team has seen flourish during the pandemic:

Ghost kitchens.  These efficient additions to the foodservice business fill increased demand for takeout and delivery service without opening a storefront. Brands that have become reliant on the method include Fatburger, Nathan’s Famous Hot Dogs, Shake Shack, Fazoli’s, and Bloomin’ Brands. DoorDash has introduced DoorDash Kitchens, providing customized kitchen space for restaurant operators employing the DoorDash app.

Groceraunts. Supermarkets and restaurants are pairing up to create more diversified offerings at grocery-anchored centers. Saladworks announced its intention to expand its in-store locations to grocery stores across the Philadelphia region, most recently opening inside a Giant store in Camp Hill, Pa. ClusterTruck has expanded its partnership with Kroger to create an in-store operation offering delivery and takeout services, picking up on a trend that started in 2017 with Wahlburgers and Meijer.

Drone delivery.  The adoption of drone delivery among retailers took off during the pandemic, with Walmart taking the lead. The company recently announced partnerships with Quest Diagnostics and DroneUp to launch trial deliveries of COVID-19 testing kits in select markets, as well as with Zipline to deliver health and wellness products. Walgreens announced a 5x increase in drone deliveries through its partnership with the Alphabet company Wing in Christiansburg, Va.

5G arrives. As 5G networks and devices proliferate, retailers have more options to create the interactions and experiences that customers crave using such tools as virtual and augmented reality. It’s also changing how retailers engage with consumers. Target, for instance, is using the technology to offer shopping reservations to assist with social distancing and save time spent waiting in line to enter stores. 

Discount brand growth. Retailers like Five Below and Dollar Tree have continued to expand across the country. Dollar General recently announced the launch of PopShelf, a higher-end version of its traditional offering that targets millennials.

“Forward-thinking retailers will always find a way to stay relevant by meeting their customers where they are and catering to their preferences,” said Ashley Casey, PECO’s director of national accounts. “We are fortunate to have many of these types of retailers in our portfolio.”