This post from Eric Hawthorn is part of our Llenrock Group guest post series and originally appeared on the Llenrock Group blog.
Retail drives other retail, which means vacant store fronts are a significant liability for both landlords and their tenants. Outside of key retail hubs like Manhattan and certain regional shopping malls, retail vacancies are a major problem, even years after the financial crisis. The slew of retail closures and bankruptcies that afflicted the retail sector (i.e., Borders, et al) have left enormous open areas in once-vibrant shopping districts. And big-box retailers aren’t the only culprits; in many of the country’s most fashionable shopping districts, a small storefront may go unfilled for months and even years after its boutique tenant has gone out of business. Here in Philadelphia, some of the city’s most popular, vibrant shopping districts–Market East, Manayunk’s Main Street, and South Street–have unfortunate gaps in their retail offerings, despite large crowds of daily visitors. Even Philly’s Walnut Street west of Broad–the most valuable retail area in the city–has seen a vacant storefront or two.
We’ve discussed the subject of retail vacancies and their short-term solutions, pop-up shops, a few times here on the Llenrock Blog. Sure, a landlord would prefer to have a strong credit tenant with a splendid long-term outlook, but in a pinch, a pop-up store can work as well and help to drive traffic to the area’s retail–all while boosting revenue when there would otherwise be an empty storefront. We’ve all seen unique retail concepts “pop up” in malls, shopping centers, and urban retail strips for short periods, whether a few weeks or a whole season. Examples of such pop-ups in recent years have included seasonal staples like Halloween and Christmas shops, brand-specific concept stores (to promote a new line of clothing, etc.), and even discount book stores. In major regional malls and big-city shopping districts one likely finds pop-ups built around a particular concept, like a “One Direction” store.
But unique concepts are not limited to pop-up shops, though the temporary format may sometimes be compatible with a specialized concept. Some stores, here in the States and throughout the world, feature unique layouts, operations, products, or other attributes to make them stand out from what–let’s face it–can be an often bland or mundane retail landscape. Particularly in response to the onslaught of online retail, which has cannibalized brick-and-mortar retail for some time now, many retailers have launched retail concepts that offer more than simply merchandise at a higher price than one would find online. Today, more and more retailers offer an experiential shopping opportunity to their customers.
Check out this article on The Independent, which looks at the growing trend in which retail concepts attempt to create an all-encompassing experience for the consumer, merging retail and entertainment: retailtainment:
First coined by American sociologist George Ritzer in his 1999 book, Enchanting a Disenchanted World, Revolutionising The Means of Consumption, “retailtainment” was defined as “the use of sound, ambience, emotion and activity to get customers interested in the merchandise and in the mood to buy”. He argued it was all about allure; the dilemma of attracting more customers “while remaining highly rationalised”.
Thus we have pricey, elaborate concept stores like The Disney Store, M&Ms World, FAO Schwarz, and the Apple Store, as well as boutique and name-brand retailers like Urban Outfitters and Hollister and Abercrombie. These stores, some oriented around a single product or product line, some more diverse, may offer the exact same products one might find on Amazon (and often at lower prices). But what they offer customers is a memorable, fun experience–something more than simple shopping.
Thus we have retailtainment, a segment of the lifestyle shopping movement that is revolutionizing traditional retail. This is a healthy change for the retail sector, whose customers have long ago tired of “traditional.”