What’s ‘In-Store’ for the Future of Retail
Article | 4min read
by JONES REAL ESTATE on June 07, 2023
In an era where essentially any retail product can be found in your pocket and purchased from the palm of your hand, what role will bricks and mortar retail play for consumers in the next decade?
At Jones Real Estate, we believe it will be a BIG one…
Since the advent of online retail and global sales phenomena like Black Friday and Click Frenzy, upward pressure has continued to mount on shopping centre and retail asset owners to keep customers coming back to stores in-person.
COVID-19 lockdowns have accelerated this flight to digital commerce too.
However, like any industry, disruption is a lever for innovation. And in the case of retail, steady headway is being made on some ground-breaking innovations that will keep bricks and mortar relevant in an increasingly digital age.
ELEVATING SHOPPING EXPERIENCE THROUGH VIRTUAL AND AUGMENTED REALITY
Augmented reality and virtual reality (AR and VR) technologies are already revolutionising the way we shop, significantly boosting the in-store shopping experience.
Being a relatively new concept, these digital innovations are exciting, and have sparked broad action among online-inclined consumers globally to get out and try it for themselves.
Some AR technologies can be accessed at home, giving consumers the opportunity to virtually try on clothes and shoes, or preview what different furniture looks like in different parts of their house (without having to move heavy items!).
So, therein lies an opportunity – retailers and brands should be reserving special AR integrations to entice people back into stores, which will boost both brand awareness and footfall, while also contributing to the appreciation of their bricks and mortar retail property investment.
Indeed, while some consumers have wholy converted to online retail, 60 per cent of Australians said augmented reality helps them shop in new and exciting ways, and 74 per cent believe it helps make better shopping choices, according to research released by Ipsos and Snap in 2022.
Considering AR and VR retail integrations are still very much in their infancy, we expect future advancements to continue causing a positive stir and ultimately drive increased visitation at key retail and shopping hubs, both locally and abroad, where the elevated in-store experience is unmatched by at-home retail offers.
Furthermore, the same basic principles regarding augmented and virtual reality can be applied for commercial office owners looking to enhance the daily worker experience, which will act as a drawcard to get tenants back into their workspaces.
VERTICAL HIGH STREETS AND TOWN SQUARES
As the rate of urban sprawl grows nationally, and particularly across Victoria, we expect to see more retail offerings and shopping centres built vertically – no longer commanding the huge land parcels of titans such as Chadstone and Westfield.
Instead, these vertical villages or multi-storey town squares will provide the same level of convenience (if not greater) for consumers, however they will do so in a more efficient manner over several key grading points.
Broadly speaking, building future retail precincts vertically will use less land, making them fundamentally more sustainable as more green space can be either preserved or incorporated around them.
Significant cost savings can also be achieved through the build process of a vertical shopping precinct, as key infrastructure like carparking can be integrated underground directly beneath the property – a critically important factor for the commercial success of new precincts as commercial-zoned land prices in traditionally suburban areas climb.
Building up instead of outwards also promotes accessibility and creates a better customer experience as each floor’s offering is clearly defined and accessible by elevator, which are both drivers that can lead to a spike in foot traffic.
ELEVATING RETAIL EXPERIENCES WITH CUSTOMER DATA AND ARTIFICIAL INTELLIGENCE
Despite the ease of online shopping provided by technological advancement, many retail categories will continue to appeal to our human curiosity to see, feel and experience specific products before choosing to purchase.
Brands using customer data to retarget customers with new campaigns related to their interests is already commonplace across the retail sector. But while brands gather information to form a deeper understanding of their buyers, both online and in-store, we also expect the data they obtain to create a major shift in how retail advertising and store configurations are approached in the future.
Stores will become experiential brand centres and consumer experiences will be curated to individuals leveraging their data, not just through generic advertisements. Understanding a customer’s buying habits, interests, style and colour preferences will also support retailers in providing bespoke in-store product ranges and experiences seamlessly.
We also expect customer data to optimise retail floorplans by allowing brands to identify and prioritise their most popular product(s) at the beginning of their customers’ journey in store.
Powerful artificial intelligence platforms like Azure Kinect will continue to provide retailers innovations like advanced volumetric tracking, whereby the movement and behaviour of every customer is tracked in-store – capturing everything from where people stop to which products they touch.
Through the integration of high-tech artificial intelligence and customer monitoring, we also anticipate future advancements at the point-of-sale as brand’s continue to streamline their checkout process to create a better in-store experience.
While self-service pay stations are already in the marketplace as a means to boost on-the-floor sales staff numbers, customer information logging across billing and shipping will continue to become commonplace and potentially reduce the need for these.
In fact, in the next few years, it may not be crazy to think we can simply walk in, grab the product we are after, and walk out – without having to worry about lining up to pay!
If you would like to learn more about our forecasts for the future of retail, discuss a commercial sales or leasing matter, or chat about a separate commercial real estate item, please reach out to Jones at: email@example.com