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Real Estate Journal
ccording to the key eco- nomic indicator - the U.S. economy is healthy. By Tom Onder, Stark & Stark The Road Ahead… Retail Growth Coupled with Demographic changes offer opportunities for development A 16% more at combined brick- and-click stores.
economic picture is the buying power of four (4) generations - Baby Boomers (54-74 years old - 74 million in U.S.), Generation X (39-53 years old - 66 million people in U.S.), Millennials (24-38 years old- 71 million in the U.S.) and Gen Z (3-23 years old - nearly 74 million in U.S.), according to Pew Research. Consumption Expanding As owners and developers take advantage of this economic environment, there is a real need to address the wants of these four large generations. According to ICSC Research, the next 10 years will have
expended consumption from these generations. Generally, Boomers will be looking for more medical and healthcare offerings, Gen Xers and Mil- lennials more household items as they purchase homes and rent apartments, and Gen Z more entertainment options…. And don’t forget the Alphas, that’s the newest generation that started in 2016 for chil- dren born 2016 to about 2030, according to Goldman Sachs analysts. More interesting is that Mil- lennials (the largest generation) are predicted to increase their
consumption spending by 75% for basics of housing, health- care, food and leisure. Omni-Channel Expanding the Pie Each of these generations is using technology like never before to fulfill their retail needs. For instance, back-to- school shopping is now getting started earlier due to Prime Day - Amazon’s annual online sale. According to Forbes, Prime Day is expanding the pie for not just themselves, but brick and mortar as well with shoppers spending 17% more at brick-and-mortar stores and
Further, according to ICSC Research, more than 70% of these four combined genera- tions are using technology to conduct research before their purchase through their mobile device in-store to compare and also get coupons. No matter the retailer, internet sales are no longer looked at as a difficulty for tenants to operate around, but rather an accompaniment to their other sales options – which include in-store kiosks, mobile apps, website, social media, and also traditional in-store sales. Inter- estingly, all of this information on the consumer is kept some- where, allowing retailers to further target their customers. Last Mile The “Last Mile” is a term used in supply chain manage- ment to describe the movement of goods from a transportation hub to a final destination. The acquisition of Whole Foods by Amazon is a great example of an opportunity to try and cut the costs of that Last Mile in delivery of goods. Further, it is expected that drones will be able to cut that cost even further. The bigger outlook is on when autonomous vehicles will occur – which will allow a consumer to be picked up or goods dropped off right at their door without a driver. The Space is the Place Still, no matter the technol- ogy, the shopping center is a physical space people want to be at. The Greeks used the word “agora,” the marketplace, where people congregated, products were offered for sale, and culture and ideas were shared. Even with the passage of 3,000 years, that market- place exists today and will in the future. It is the experience of in-person shopping and social interaction that drives consumers to shopping centers. The growth of non-traditional uses such as medical, enter- tainment, child care, fitness at centers is evidence of the same. The road ahead for shopping centers is not your parents’ road… it’s changing and dif- ferent, but full of opportunities. TomOnder is a sharehold- er and Chair of the Shop- ping Center & Retail Devel- opment Group, as well as a member of the Real Estate, Litigation, and Bankruptcy & Creditors’ Rights Groups of Stark & Stark.
Unemp l oy - ment is 4% (lower than 4.4% a year ago). Gross d o m e s t i c p r o d u c t (GDP), the measure of the nation's
production output, is expected to remain between the 2% to 3%. And, both inflation and/ or deflation appear to be in check. Coupled with this solid
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