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18C — September 29 - October 12, 2017 — Fall Preview — M id A tlantic
Real Estate Journal
R etail
By Thomas S. Onder, Esq., Stark & Stark Optimism grows as retail environment responds to consumers
T
he Na t i ona l Re t a i l Federation forecasts that 2017 will provide
a much better economy, with lower gas prices, unemploy- ment, and inflation, bodes well for the end of 2017 and the start of 2018. Non-Traditional Tenant Of- fer Opportunities Traditional tenants like grocery stores and apparel look to do better this year. However, the trend toward non-traditional use tenants, such as restaurants, fitness, medical, educational, hotels, and entertainment continues. Non-traditional use tenants can help drive traffic for shopping centers both physically with “boots on the ground,” and also
with “pushing” consumers to the shopping center through use of social media. Social Media Increasing Traffic/Sales Increasingly, consumers are using social media during their shopping experiences through platforms like Facebook, Insta- gram, and Twitter. For savvy social media-minded retailers and landlords, this is an op- portunity to bring additional consumers into the shopping center to view products, ask questions, and make purchases and internet-purchase returns. The key to any sale is engag- ing the consumer and earning
his or her trust. Shoppers are now using “five star” rating systems and online reviews to distinguish between retailers and products online. Focusing internet presence, mobile apps, and social media to engage consumers online and earn their trust can get them to your center. Exceptional service, amenities, and other incen- tives can get them to return. Centers and retailers can offer consumers the opportunity to test products, take classes, as well as hold in-store events and hands-on demonstrations. This experience model can provide immeasurable growth for ten-
ants/retailers who embrace the changing shopping experience. Including so-called show- rooming and webrooming in your marketing or sales strat- egy to draw internet shoppers to shopping centers can increase traffic and sales. Showrooming consumers examine merchan- dise in a store and then buy it online. Webrooming consumers research a product online and then buy it in a store. Tailoring your marketing, advertising, and sales approach to these shopping techniques can help draw customers to your center. Right-Sizing Tenancies The last two years have seen an increase of retail tenant bankruptcies, based on chang- ing demographics, shopping habits, competition, and high debt ratios. Despite the fil- ings, many of the retailers are emerging with a “right-sized” footprint of stores and on-line presence. In any event, ten- ant bankruptcies can be seen as opportunities for shopping centers to re-vamp centers with new concepts, including non- traditional use tenancies. The Amazon Factor In addition, everyone is awaiting with baited breath, the effect of Amazon’s acquisi- tion of Whole Foods and how it will affect the shopping experience. For years, grocers have been trying to perfect the “groceries to your door” concept, with little success. If Amazon can do what it has done for online shopping with groceries and also add its physical footprint to the shop- ping center, then it will truly be a game changer. It is a game well-worth watching. If you are an owner, develop- er, and/or landlord, it is impor- tant to understand how these changes will affect your shop- ping center. Stark & Stark’s Shopping Center and Retail Development Group can help. Our attorneys regularly repre- sent owners, developers and/or landlords throughout the coun- try, in leasing, buying/selling, 1031 Exchanges, refinancing, as well any enforcement activities, including protecting landlords in retail tenant bankruptcies. Thomas S. Onder, Esq. is a member of the International Council of Shopping Cen- ters and a Shareholder and member of the Commercial, Retail and Industrial Real Estate, Litigation and Bank- ruptcy & Creditors’ Rights Groups of Stark & Stark. n
$83.6 billion in back-to- school spend- i ng - a 10 percent in- crease from last year. The Fede ra t i on reports that the i r num-
Thomas S. Onder
bers follow a pattern that looks much like 2012, when pent-up buying provided a similar boost in back-to-school spending, leading to higher holiday spend- ing. This forecast, coupled with
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