2018 Retail Landscape

Retail Challenges Go Beyond Competition from E-Commerce Last year brought a lot of bad press around big box store closures and the dwindling appeal of traditional brick-and-mortar retail in city malls. Most of the troubles experienced by these compa- nies have been blamed on the expansiveness of e-commerce. However, PwC highlights trends that go beyond e-commerce that are responsible for some of the challenges facing traditional retail, including: • Younger consumers prefer shopping online to shopping in person at department stores • The natural evolution of retail similar to the move away from catalogue ordering in the 50s • New innovations affecting the way clothing is manufactured and distributed • Overall changes in the demographic makeup of today’s consumers • And the effects of technology on society as a whole

In essence, for decades beginning in the 1950s, the proliferation of giant box stores, department stores, retail chains, shopping centers, and malls oversaturated the market. Now that the majority of retail transactions occur online, these massive structures are out of place in the current retail landscape.

The State of Brick-and-Mortar Retail Remains Strong

Even with all of the headwinds and changes occurring that have had a negative impact on tradi- tional retail, industry experts say that the retail landscape remains strong. Investors are still inter- ested in these assets, lenders are still willing to finance investments in traditional brick-and-mortar, and investors are able to acquire these properties at incredibly low prices right now.

The fact that many of these outdated assets were built within urban cen- ters is proving to be a plus now that younger consumers as well as older adults are moving back to the city. Coupled with the fact that online giant Amazon has turned its sights to brick-and-mortar, it’s clear that opportuni- ties abound in 2018 for revitalizing retail in city malls and shopping centers across the country.

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