Retail breaks the Internet: How local retail can adapt in the age of e-commerce

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All your Christmas shopping. At your door. Wrapped. In a day.

Online retailers have made the holiday rush so convenient it’s almost bearable. But while technology has undoubtedly made our shopping lives easier, it’s become a huge chunk of kryptonite to many traditional retailers who are watching their superpowers slowly melt away.

Many retailers, of course, are considered “Internet-proof” because they offer services you can’t get through your phone or laptop. After all, it’s hard to fix your tire or get your nails done with Amazon Prime, and Americans will always love eating out. The changing retail landscape doesn’t impact these types of businesses in the same way, which is why so many of service-oriented retailers have been garnering the most looks from investors in recent years.

But if you’re selling a product, the road ahead is more challenging. As you’ve already learned, you won’t beat the convenience of shopping online, and you’re probably not going to compete on price.

Not all is lost, however. That old real estate mantra of “location, location, location” just means something a little different for you now.

Consider your next move

Malls are mostly ghost towns – or gone entirely – these days, but the original concept still applies—and can still be leveraged for success. After all, humans will always crave that social interaction, and it’s well-documented that adding an “experience” to your retail offering not only drives traffic but also provides that social aspect we all need.

So, while high-traffic areas may have been the most sought-after location in recent decades, it makes more sense now to be in an area that facilitates an “experience.” And don’t limit your concept of experience to just water parks and movie theaters, either. The library and aquatic center at City Center Lenexa, for example, are “Internet-proof” services that also happen to sit adjacent to small, boutique retail businesses that benefit from that foot traffic (which also comes from the apartments above them that offer built-in visibility).

Another good example? Look at Twill, a women’s clothing boutique thriving in Parkville. The owner isn’t trying to compete on price or availability (the “treasure hunt” aspect of these stores is part of the fun, after all), but her neighbors down the sidewalk include a nail salon, an ice cream shop, a Nick & Jake’s—all Internet-proof businesses that drive customers right to her door.

No, retail is not dead, but retail business owners are being forced to choose their neighbors differently than we’re used to.

Retail adapts to survive

The good news is that Kansas City offers a very affordable cost of doing business, as compared to pretty much any other urban region across the country—and definitely lower than the U.S. average. And that helps businesses of all types, including retail. And I’ve seen more and more local retailers continue to stay relevant – and solvent – by adapting to the changing landscape.

As the National Retail Tenants Association points out, these small changes to attract customers take many forms:

“Retailers, including fairly traditional retailers, are ramping up excitement for customer engagement with all kinds of community outreach, such as displaying murals by local artists and adding nontraditional services, as well as public engagement activities, including experiential shopping, live and recorded music and videos, game and activity spaces, and even food trucks … With all the changes in the retail and real estate markets, old ways of looking at things may no longer make sense.”

In other parts of the metro, we’re seeing individual communities and neighborhoods doing a better job of creating destination shopping areas – think Brookside or the shops in Prairie Village – that bolster the appeal of the retail found there. Or look at Rainy Day Books, which has survived the bookstore apocalypse by offering author events and plenty of community involvement, and by creating a culture of “shopping indie” that’s attractive to local book lovers.

The main lesson here is that retail is rapidly changing, and we’re all learning what this new normal is (and will be in the future). Both developers and business owners have to be open-minded and creative in how they use space, and retailers in general should look at how to better connect with local customers.

You’re never going to put Amazon out of business, but with a little hard work and some market insight, you may find your own little pocket of customers looking for you this whole time.

Erin Johnston is vice president of retail brokerage at Copaken Brooks, a full-service commercial real estate firm headquartered in Kansas City and serving the Midwest. The company’s full suite of services includes: leasing (office, medical, retail, industrial and underground), construction management, investment acquisition and sales, tenant representation and HQ relocations, condo management, property management, asset management, and development. Share your thoughts on our Facebook page or on Twitter @CopakenBrooks.

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