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Retail real estate trends are highly dependent on the needs, wants and buying behaviors of consumers. Advancing technology, demographic shifts to urban centers and a post-pandemic climate all contribute to the future of retail real estate

Omnichannel Retail

Technology’s rapid progression has integrated the Internet into all aspects of our daily lives, and COVID-19 has only accelerated the merging of the physical and digital worlds. This digital revolution has transformed the way people shop today, disrupting the former retail commercial real estate market. 

While the practice of online shopping has skyrocketed among consumers in recent years, brick and mortar storefronts still remain an integral part of the retail experience in 2020. Today’s consumers use multiple channels to shop, and retail businesses are using an omnichannel approach to engage with them. The future of retail is transforming stores from inventory-heavy transactional centers to experiential showrooms, where customers can test products in-person and order from an online inventory. 

Many big retailers are integrating technology into their physical retail experience to enhance the in-store customer experience, A number of companies, including Timberland and Lowe’s, are using augmented reality, interactive touchscreens, virtual fitting rooms, automated support and other technology to bridge the on- and offline shopping experience. Today’s landlords are investing in newer buildings equipped for technology integration or adding technologies that will attract more retailers!

The Rise of Urban Centers

Many urban areas are shifting towards pedestrianization to accommodate population growth and reduce noise and air pollution. Car-free streets will soon be the new normal in large cities like New York and San Francisco. These walkable areas will become urban centers for leisure, with gardens, event spaces, retail, restaurants and more. 

The live-work-play mantra will be represented in mixed-use development projects that are focused on more than just retail. Shopping centers and open-air retail centers will become urban centers, encompassing a variety of amenities, from educational facilities and healthcare offices to leisure activities and retail. 

Retail Real Estate Market Post-COVID-19

COVID-19 has significantly impacted the way that we do business, and it’s still unclear how the repercussions may affect our economy and the future of retail. The pandemic has fueled short-term and potentially long-term struggles among retailers in particular, as many have been forced to close their doors for an indefinite period of time. When all of those businesses are able to reopen at full capacity, only time will tell how post-pandemic consumer behavioral changes will affect retail real estate usage.