Changes in consumer behavior are continuing to shift the business of retail real estate. As people began to move away from national chains and seek out local business in their communities so do developers when deciding how to fill their retail space.
When developers are deciding on their tenant rosters one thing that is taken into careful consideration is the location. In urban environments small, local businesses tend to do very well, while established chains are still more popular in the suburbs. This goes hand in hand with the demographic in any given area.
Developers must adapt to meet the demands of their customers. In 2019 this often means paying close attention to what millennials want. While often anything involving millennials invokes an eye roll, their influence is substantial and they hold real “spending power”. This important demographic tends to prefer unique companies with authentic branding that stands out.
Independent brands are proving to be the right choice for developers despite not having established sales histories or experience. More and more, communities are fiscally responsive to the authentic feel and exclusivity that these new retailers offer.
The idea of developers choosing new companies over established retailers seems unconventional, and it is! However, times are changing and people are becoming drawn to places that they identify as local. This could be due, in part, to the fact that everyone wants to see themselves represented and these newer establishments are doing just that.
Another contributing factor to the major shift in development is the rise of mixed-use projects. Mixed-use means that a single property is used for multiple purposes. It is becoming more and more common for shopping centers now to also share space with offices and private residences. This is changing what used to be only retail space into an area that offers more of a neighborhood feel.
This idea of having apartment condos next door to doctor’s offices, shops, restaurants, and yoga studios brings back the idea of community. It’s also incredibly convenient. Developers curating this new idea of mixing it up are broadening the range of their consumers, and in turn, increasing their profitability.