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Living the Brand: Inside Branded Residences

Living the Brand: Inside Branded Residences 1440 428 ASG

Imagine a consumer so enamored with a brand that they want to embody it. Isn’t this every retailer’s dream? Enter the creation of branded residences—the next logical step some luxury brands are taking to create a deeper connection with their brand loyalists.

Take the Fendi Chateau Residences in Miami, for example, which feature 58 “flow-through oceanfront residences” featuring interior design by Fendi, white-glove service offered “on an intimate scale,” a spa with European thermal pool, and ultra-luxury concierge services by Fendi Chateau attaché, among other amenities.

Similar branded residences to suit every preference are popping up, and catering to consumers who live and breathe their brands.

Branded Residences Aren’t New – But They’re Hot Now

Branded residences aren’t exactly new. They date all the way back to the 1920s when the Sherry-Netherland became the first branded hotel development to feature fully serviced apartments. The concept gained traction when Four Seasons opened its Boston luxury residences in 1985.

Branded residences are luxury residential properties tied to a brand. Historically, they were only offered by exclusive hoteliers, providing prospective buyers the opportunity to purchase their own beautifully designed residence, either within the hotel itself or in a hotel-owned standalone development.

While hoteliers investing in branded residences was a logical progression, today’s lifestyle, auto, and fashion brands also are getting in the game, leading to a resurgence in these signature homes. In fact, the branded residence sector is up 160% over the past decade, according to London-based commercial real estate brokerage Savills.

“Fashion, a natural extension of one’s lifestyle, seems like an obvious choice for a branded home, and luxury buyers trust that products from fashion houses will retain high-quality details and a refined level of craftsmanship,” writes Emma Reynolds in the Robb Report.

While many high-end fashion brands including Fendi have carved out a niche in the home décor industry, branded residences offer the opportunity for these brands to immerse brand loyalists through touches like customized fabrics and fixtures. These looks not only appear in residents’ homes but throughout the entire building as well.

The Collaboration Behind Branded Residences

Branded residences typically stem from a partnership between a company and a developer in which the brand grants a license to the developer to market and sell residences incorporating its brand. Owners of branded residences are also typically required to pay annual homeowners’ association fees to help maintain the elevated look of the property.

Bentley Residences is an example of one of the newest non-hotel branded residences. Miami, which is known as the “branded residence capital of the world,” is home to these 216 furnished apartments and a host of amenities that rival those found in a five-star resort.

The Waldorf Astoria in New York City is another example of a branded residence, though a co-located type since the construction of 375 residences will sit on top of the hotel space. The residential section, called The Towers, has separate owner entrances and a concierge closet at the entryway of each residence to ensure secure and discreet package delivery.

Want the branded residence experience without the commitment (and cost)? Book a stay at Armani Hotels in Milan or Dubai, the self-described “pinnacle of luxurious living and fine dining” in “an exceptional world of luxury.” Starting at $2,400 a night for a room in Milan, guests can add on one-of-a-kind experiences and services to make their stay at Armani Hotel Milano “more and more exclusive.”

What’s the Draw?

The simple explanation points to modern society’s need for brand familiarity and speaks to the equity that some brands can boast, particularly in the luxury sector.

“We live in a branded world, and buyers of such products seek association with brands they are loyal to and know they can rely on for a premium product,” says Jonathan Nash, a top-producing luxury realtor with Beverly Hills-based Hilton & Hyland.

The allure of branded residences’ elevated level of luxury living appeals to time-starved, affluent, and brand-conscious would-be owners who are attracted to all these properties have to offer, including the exclusive brand experience. After all, these residences not only offer quality design, but security and the highest levels of service. Amenities like valet parking, spa services, dog walking, and even personal concierge services are table stakes.

For examples of unique amenities, look no further than Porsche Design Tower or Bentley Residences, whose auto-centric luxury perks include over-the-top personal car elevators. Major Food Group’s Villa even features a private restaurant and chef-designed kitchens.

The Future of Luxury Branded Residences

Here’s a revealing insight: commercial real estate brokerage Savills estimates that non-hotel brands will account for 20% of the total supply of branded residences by 2030. That’s an increase of 40% from current levels, showing the incredible ongoing transformation and expansion within the branded residences market.

They also predict the demand for branded residences will remain strong in global cities that are hubs for business and education, cultural attractions, and unique experiences. All of those attract the sort of affluence required to live in a branded residence.

In addition to New York, London, and Miami, another hot global market that is predicted to experience a growth in branded residences is Dubai, with 51 operational schemes in the works, according to Savills.

A few of the brands planning on entering the market before 2030 include Dolce & Gabbana, de Grisogono, and Mama Shelter.

Become Senior Savvy

In the end, overlooking the opportunity that Silver Shoppers bring to the table can be a huge mistake for your retail business. Industries like apparel, health supplements, skin care brands, alcohol beverages and investment brands are booming thanks to the mature consumer.

This often-overlooked segment of shoppers represents a significant opportunity to retailers. With a better understanding of this demographic, retailers can woo these consumers into loyal shoppers.

Prestige to Purpose: How Gen Z is Reshaping Luxury Retail

Prestige to Purpose: How Gen Z is Reshaping Luxury Retail 1440 428 ASG

Forget traditional luxury; Gen Z is here, and they’re redefining the luxury retail landscape with entirely new values. Their focus on inclusivity and sustainability is forcing brands to adapt or risk missing out on a massive opportunity. The question is, are luxury brands ready?

Values-Driven Consumers

Shaped by a world facing immense challenges, Gen Z prioritizes authenticity and social responsibility. Unlike previous generations, conspicuous consumption holds little appeal. Instead, they seek luxury brands that champion sustainability, diversity, and ethical practices. In fact, 62% of Generation Z prefer to purchase from sustainable brands and are willing to pay more for ethically produced goods.

Gen Z’s current $360 billion in spending power (up from $143 billion just four years ago) presents a pivotal moment for luxury retailers. This cohort’s loyalty hinges on brands that champion these core values. Failure to adapt could mean missing out on a massive market segment.

Luxury Brands Embracing Sustainable Initiatives

Recognizing the generation’s growing purchasing power, luxury brands are adapting their strategies to reach these consumers. From fashion houses to restaurants, companies are integrating sustainability into their core values and product offerings. This entails everything from using recycled materials and reducing carbon emissions to supporting charitable causes and fostering inclusivity in marketing campaigns.

Some luxury brands, like Loewe, Coach, and Veja, are embracing sustainability by opening recraft stores so that they can extend the life of their products and repurpose materials. Luxury thrifting is a growing trend that more brands are embracing.

Stella McCartney, a leading luxury brand in the sustainability movement, has introduced “the world’s first Mylo™️ garments created from vegan mushroom leather.” Gucci, Nanushka, Chanel, and Burberry are also embracing the idea of vegan leather and other sustainable materials.

Chanel has committed to significant changes to their production and packaging to help combat climate change.

Digital Natives & Social Mavens

Forget traditional tactics; Gen Z lives online. Luxury brands like Christian Dior are integrating AR and VR into their offerings, including AR and VR runways and Instagram filters, for immersive experiences that impress even these digital natives.

Social media is indispensable for reaching this generation, allowing brands to communicate their values, share behind-the-scenes insights, and forge authentic connections with consumers.

“Gen Z-ers are immune to traditional advertising. Authenticity and social impact make a difference. They want to feel a genuine connection when engaging with brands and these outspoken luxury and fashion shoppers are not afraid to voice concerns. More than one-third shared their opinions on social or political issues on social media last year.” EuroMonitor International

At the same time, social media has made luxury more accessible to younger, aspirational consumers.

“In a world of digitally native consumers, exclusivity has become less exclusive and, rather, more inclusive. Social media has been an influencing factor in this by allowing an insight into the inner workings of the luxury world. As a result, younger demographics view luxury as more approachable and accessible despite the price spikes orchestrated by economic headwinds. Younger Millennials and Gen Z & Alpha seek experiences beyond purely transactional; they seek deeper connections and close-knit communities that the luxury market can offer.” – Design4Retail

Luxury Is Evolving

According to Bain & Company, by 2030, Gen Z will account for 25% to 30% of luxury market purchases, while Millennials will account for 50% to 55%, giving luxury brands motivation to understand how to appeal to them.

YPulse ranked Gucci, Rolex, and Louis Vuitton as the top three successful luxury brands favored by Gen Z. They have something in common: they’ve shifted their marketing strategies away from a stodgy, old wealth approach to an accessible, modern approach. All three of these brands are visible online in gaming, the metaverse, and in NFTs. From Gucci’s presence in Roblox to Louis Vuitton’s partnership with Pharrell Williams, these brands are shifting the relevance of luxury to a new audience.

Some luxury brands don’t seem to be able to pull themselves away from that old money stodgy marketing approach, and it is reflected in last year’s RepTrak report, which revealed that of the luxury brands that typically claim the top spots, several fell significantly in rank, including Rolex and Mercedes.

Daniel Langer writes for Jing, “Storytelling excellence, superior on-brand experiences, and client-centric adaptability are the keys to tailoring client experiences to Gen Z consumers.”

Not all brands are able to make the transition from their old-style marketing to the new, digital-first, inclusive approach expected by Gen Z. If brands aren’t demonstrating honest, positive change at the corporate level, they don’t stand a chance.

As the luxury landscape experiences a profound transformation driven by the shifting values of Generation Z— a group that prioritizes purpose over prestige—brands will need to adapt to remain relevant and appeal to the next generation of affluent consumers. This shift toward sustainability, quiet luxury, and authenticity can help luxury continue to grow into the next decade

Call it the “old money” aesthetic or a low-key flex, but Quiet Luxury is here to stay. Read more >

Silver Shoppers: Adapting Retail for the Aging Generation

Silver Shoppers: Adapting Retail for the Aging Generation 1440 428 ASG

Forget the fountain of youth. It’s time to tap into the silver shoppers tsunami. Older consumers are becoming the majority; even youth-focused brands shouldn’t write them off. This demographic wields significant disposable income, making it ripe for savvy retailers who will provide the products and experiences they desire.

If you have any assumptions about Baby Boomers and the way they spend, it’s time to throw them out. While Millennials are the largest generation by population share, Boomers hold 51% of the wealth in the United States. The International Standard Organization estimates that in the US alone, the Boomer generation outspends others by $400 billion annually—and a significant portion of future global income will be concentrated in their hands.

As the population ages, how can retailers anticipate the needs, desires, and evolving spending habits of older consumers? And what do these “Silver Shoppers” mean for your business?

Shifting Perceptions and Redefining ‘Old’

Would you believe that the women in the Sex and the City spinoff, And Just Like That were supposed to be the same age as the women in The Golden Girls? Or that in All in the Family, Edith was only 44 and Archie was 48? This shift in how age is portrayed in pop culture reflects how the concept of “old” age has changed dramatically in the last few decades.

“More senior citizens are more healthy, adventurous, and actively engaged in society than their counterparts were even 10 years ago. Now, researchers say the way aging is measured should change too,” explains Mehran Movassaghi, M.D. in a blog for Pacific Men’s Health.

Baby Boomers are those who were born between 1946 and 1964. More than 20% of the U.S. population fall into this category.

While retirement is often associated with people in this age group, about 40% of people age 55 and older were working or actively looking for work in 2020, according to the U.S. Bureau of Labor Statistics.

This trend of “unretirement” is just one example of how Baby Boomers are bucking what it means to age. A recent Michigan State study found that people say they feel about 20% younger than their actual age. Beginning at age 50, many say they feel about a decade younger.

But how does this redefining of “old” shape the retail market?

Senior Spending Power

According to BCG, there will be more older people than younger people globally in the next couple of decades.

“Aging will transform the demographic structure of every major market, even those with relatively young populations today. In China, for example, the percentage of the population 50 to 70 years old will grow from 26% in 2020 to 30% in 2050. In India, it will increase from 16% in 2020 to 25% over the same period. The size of this opportunity will continue to grow, too: the population of 50- to 70-year-olds in the 12 nations we examined will approach 1.1 billion in 2050.”

This demographic shift offers a significant opportunity to retailers, as the increasing number of older consumers with higher average net worths represents a substantial and growing market segment.

As the population’s average age goes up, retailers and other industries will need to be flexible in how they reach these consumers. Many in this aging cohort are influential, active, and in control of a significant amount of expendable income.

Capture the Boomer Audience

If age is just a number, how does that reflect in the behavior of aging consumers? As it turns out, older consumers are active consumers. Boomers are doing more shopping and scrolling than ever before.

More than half of the Baby Boomer population shops online. Consumer research also found that while most senior populations still prefer to shop in person, there are certain key aspects of online shopping that can be attractive when emphasized, including fast delivery, simple tracking, and secure packaging.

For retailers who recognize the evolving preferences of aging consumers, there’s a significant opportunity to tailor shopping experiences to better cater to this demographic. Here are some tips to capture this dynamic audience that is redefining what it means to age.

1. Meet them where they are.
As Boomers and Gen X age, health and medical care will become a priority. As we recently explored in our article on Medtail, “With an aging Boomer population, increased healthcare demands and shifting consumer preferences, it’s no surprise that repurposing retail space has become a strategic necessity. It has created a dynamic landscape that continues to evolve as both the health care and retail industries face unique challenges.”Retailers, particularly in the Medtail space, can take a tip from CVS, who opened MinuteClinics in many of their locations.“Convenience, accessibility, familiarity, and trust are all elements that retail health clinics and pharmacies can build on in the decades ahead. It’s essential that we make older people feel welcome in retail health clinics and show them that they are interacting with a provider they can trust,” says Creagh Milford, DO, MPH, Senior Vice President of Retail Health, CVS Health.

2. Give them a grocery experience to remember.
Consumer research shows that shoppers between ages 19 and 24 make more than 34% more grocery trips than shoppers ages 75 and older. Because older consumers tend to go to the grocery store less often, each trip becomes more meaningful.Retailers that make in-store conversions to impact the shopping experiences of senior shoppers in a positive way can benefit. For example, varied basket sizes, clear signage, and personalized assistance can offer a better shopping experience for seniors, who are more likely to return when they feel valued and accommodated.Rethinking product offerings to serve the needs of older adults is another way to attract this demographic. From easy-to-open packaging to products designed for accessibility and convenience, adapting offerings to cater to the unique needs and preferences of older adults can enhance their shopping experience and foster loyalty.

3. Make human interaction a priority.
Older consumers tend to prefer the human touch, too. A fitting example of catering to this desire comes in the form of “slow checkout lanes” that have been rolled out in The Netherlands at Jumbo Supermarkets. The slow checkout concept, for shoppers who prefer to chat to a human than scan their own items have been so popular that the chain has promised to open them in 200 additional locations.

4. Integrate technology with accessibility in mind.
Seniors will gladly spend money online, provided you make it easy for them to do so. Ensure that online platforms are user-friendly and accessible, with larger fonts and easy navigation. It’s important for any e-commerce site to be safe and secure since this is a top concern of shopping online for seniors.Retailers should consider offering online shopping with home delivery options for those who may have difficulty visiting physical stores.

5. Offer in-store events or workshops.
Hosting events or workshops tailored to Boomers’ interests, such as cooking demos, gardening classes, and DIY workshops (like Lowe’s DIY-U workshop) is a great way to engage customers in your brand without selling. Those types of activities provide opportunities for social interaction (that we all need) and experiential shopping experiences.

6. Engage in the community.
Consumers in general, but mostly Gen X and Boomers, appreciate businesses that contribute positively to their neighborhoods and support local causes. Engaging with the community through events, sponsorships, or partnerships is a great way to build meaningful relationships.

Become Senior Savvy

In the end, overlooking the opportunity that Silver Shoppers bring to the table can be a huge mistake for your retail business. Industries like apparel, health supplements, skin care brands, alcohol beverages and investment brands are booming thanks to the mature consumer.

This often-overlooked segment of shoppers represents a significant opportunity to retailers. With a better understanding of this demographic, retailers can woo these consumers into loyal shoppers.

loyalty program

Members Only: The Modern Loyalty Program

Members Only: The Modern Loyalty Program 1440 428 ASG

In the 2000s, many of us attached miniature loyalty cards to our keychains or stuffed the full-sized versions in our wallets. Loyalty programs have come a long way since then. Today, we simply punch our phone number into a keypad or scan a QR code to instantly access our loyalty accounts and redeem rewards with ease. Companies use “members only” appeal to gain valuable insights into customer behavior by offering rewards for a variety of desired actions, from social media shout outs to exclusive access to events and early product releases.

While loyalty programs once were used to reward customers for spending money at a retailer, today they have evolved to become powerful tools that help businesses grow. That said, loyalty programs have gotten a facelift to appeal to today’s consumer. Conversion specialist Invesp reports that 49% of consumers spend more after joining a loyalty program. The longer the relationship lasts, the more consumers spend. Repeat customers, on average, spend 67% more over three years than they did in the first six months after purchasing from a brand.

A Winning Strategy

Modern loyalty programs are a win-win and prove to be a powerful consumer-centric retail strategy. A PwC survey found that 53% of consumers choose a business to patronize by considering value, and 30% specifically cite benefits, rewards, and privileges as a factor.  On average, a customer in the United States belongs to 17 loyalty programs, eight of which they are active.

According to The Robin Report, investing in a loyalty program is one of the best marketing investments a brand can make.

“The benefits for retailers are substantial: Loyalty customers shop more, spend more, and stay longer. They’re more likely to engage – rating products and advocating for the brand, online and IRL. Moreover, in the current climate of iOS privacy protections and increased privacy legislation, these programs have become the richest source of permission-based consumer data collection, which can then be used to fine-tune program features and communications for maximum impact. Lastly, companies with high loyalty and/or dependable subscriptions get higher valuations on Wall Street.”

Another benefit of loyalty programs for retailers is the influence loyalty programs have on loyalty member purchasing decisions— a whopping 81% of consumers say a loyalty program membership influences their likelihood of making a purchase. Not to mention 59% of loyalty members are more likely to choose the member brand over a competitor.

According to McKinsey, customers who join loyalty programs are 64% more likely to purchase from that company multiple times, 50% more likely to recommend it to a friend, and 31% more likely to pay more to shop with that brand.

A Hidden Data Goldmine

Loyalty programs present a valuable opportunity for businesses to collect first-party data while offering rewards and incentives to their customers. When executed well, data culled from loyalty programs can help brands increase customer lifetime value, drive repeat purchases, and create brand advocates.

Loyalty programs’ influence spans across multiple channels, including online stores, brick-and-mortar locations, mobile apps, and social media platforms. This omni-channel presence provides customers with seamless interactions and more opportunities to earn and redeem rewards.

Just look to beauty retailer Ulta, which identifies loyalty members’ needs and desires through its membership program, across multiple channels. With more than 42 million active members, Ulta revamped its program in 2024 to further enhance the member experience with special birthday offers. Ulta members earn points on purchases, can earn bigger benefits the more they spend by achieving Platinum or Diamond status, and can use their Ulta Beauty Rewards credit cards to earn even more points. Points can be redeemed for purchases and salon services.

loyalty program

Modern Loyalty Programs and Blockchain Technology

Retail loyalty programs are facing a challenge: keeping customers engaged with programs that often feel siloed and offer limited reward options. Blockchain technology offers a potential solution that could revolutionize how brands design and manage loyalty programs.

Imagine a world where loyalty points aren’t just for your store, but can be earned and redeemed across a network of participating retailers. This is the power of blockchain. It allows you to create secure, digital tokens that represent loyalty points. These tokens are:

  • Decentralized: No single entity controls the data, reducing operational costs and increasing transparency for both you and brands and shoppers.
  • Immutable: Once a transaction is recorded on the blockchain, it cannot be altered, eliminating fraud concerns.
  • Interoperable: Customers can use their tokens at any store within the network, unlocking greater value and flexibility for them. This can incentivize them to shop at a wider range of stores, potentially introducing them to new products and brands.

Beyond the customer benefits, blockchain offers significant advantages for retailers:

  • Increased engagement: By offering a more versatile rewards system, you’re more likely to keep customers actively participating in your program, leading to repeat purchases.
  • Reduced program management costs: The decentralized nature of blockchain can streamline program administration and potentially reduce maintenance fees.
  • Valuable customer insights: With customer consent, blockchain allows you to gather valuable data on spending habits across the network, providing insights into broader consumer trends and informing more targeted marketing strategies.

While still in its infancy, blockchain has the potential to be a game-changer for loyalty programs. By offering increased value and flexibility for both brands and customers, blockchain can help you create a more engaging and rewarding loyalty program experience. This can ultimately lead to increased customer retention, brand loyalty, and revenue growth.

Unlocking Stronger Customer Relationships

Loyalty programs are a powerful tool to differentiate and drive repeat business. By aligning rewards with customer preferences, brands can create a seamless and rewarding shopping journey that keeps them coming back for more. Studies show that loyalty program members spend up to 67% more over three years than non-members.

Suburban Boom: Is Urban Retail Doomed?

Suburban Boom: Is Urban Retail Doomed? 1440 428 ASG

Is Urban Retail Doomed?
The pandemic brought about a seismic shift in the way people live and work, prompting a mass exodus from city centers to the tranquility of suburban life. As individuals and businesses embraced remote work, the appeal of spacious homes, lower population density, and a more relaxed lifestyle became irresistible.

This migration (or “reshuffling” as some have called it) has impacted various aspects of society, and the retail industry is feeling the reverberations. As more people and businesses choose to stay in the suburbs, retailers are reevaluating their location strategies to adapt to this evolving landscape.

Trends in Suburban Living

People moving away from cities to suburbs is not new, but the pandemic acted as a catalyst, accelerating the shift. Millennials in particular have fled urban areas because of the rising costs of rent, which are now nearly 30% higher than before the pandemic.

The biggest segment of the workforce, many Millennials have moved to the suburbs, recognizing the benefits of remote work, and businesses followed suit. For many businesses, the shift has offered more cost savings and a better quality of life for employees. According to a recent study from McKinsey Global Institute,
• Hybrid work is here to stay. Office attendance has stabilized at 30% below pre-pandemic norms.
• New York City’s urban core recently lost 5% of its population; San Francisco’s lost 7%.
• Foot traffic near stores in metropolitan areas remains 10 to 20% below pre-pandemic levels.

The firm’s research predicts that “few of the people who left will return and that urban shopping will not fully recover.
Echoing the post-World War II exodus of their grandparents, Millennials are putting the suburbs back on the map. Many retailers and restaurants have followed by shifting locations from urban business districts to the suburbs. While this is good news for suburban communities, it’s bad news for cities’ central business districts.

Suburban Shift Alters Retail Location Strategies

Gone are the days of downtown malls drawing metropolitan residents to the city center.
As suburban living continues to gain momentum, retailers are adapting to this new reality. The shift is prompting them to reassess their location criteria, considering factors beyond the urban-center location and forcing landlords to re-evaluate mall and department store spaces.

Retailers must now identify where the new suburban hubs are emerging and strategically position themselves to capture this growing market. This offers retailers the opportunity to meet customers where they are, or are going.

Retailers have re-evaluated where and how they open flagship stores, recognizing that in some cases, Main Street suburbia is a more logical move than 5th Avenue. In other words, the retail store prototype is dead.

Location data becomes particularly important as a form of insight, revealing unexplored opportunities for every potential location. In addition to traffic patterns and roadways, location data reveals extensive demographic data about consumers living in the area.

Factors Shaping Urban and Suburban Retail

As urban and suburban landscapes continue to evolve in response to shifting consumer preferences and socio-economic trends, there are still several factors that could exert influence on retail. Here are a few of these factors that are important to watch over the next few years.

The Call to Return to Office
Return-to-office trends have been somewhat mixed. Some corporations like Boeing and UPS have called for workers to come back five days a week, while others have taken a hybrid approach. Recently, IBM has told U.S.-based managers that they must return to the office at least three days per week, pivoting away from fully remote work.

Where these office spaces are located could have an impact on urban versus suburban retail, ASG President and CEO Carrie Barclay explains. “I think the challenge is going to be the continued evolution of the call of RTO (return to office) and the response – and whether hybrid can remain strong,” Barclay said.

Urban Crime
But urban retail is facing another challenge – the rise of social disorder and crime reminiscent of 70s and 80s, Barclay says. Crime surges drove out many urban residents and businesses, regardless of incentives in place to keep them in the city. “This will have to change in order for retailers to return to urban areas,” Barclay said.

That may be on its way to happening, with recent reports showing homicides declined in the United States across the board in 2023. The five largest cities in the United States – New York, Los Angeles, Chicago, Houston, and Phoenix – each showed at least a 10% decrease in homicides that year.

Omnichannel and e-Commerce
With online shopping becoming increasingly popular, retailers must find ways to blend their physical stores with an online presence to deliver a seamless shopping experience to suburban customers. This shift presents opportunities for retailers, who must consider several factors when reevaluating their location strategies.

Opportunities to consider may include hybrid retail spaces, click-and-collect services, curated local experiences, and local delivery solutions.

Consumer Demographics and Behavior
Changing consumer behaviors, influenced by digital advancements and shifts in shopping habits, have a profound impact on retail location strategies. Online shopping and the desire for convenience prompt retailers to reevaluate their physical presence, considering factors like proximity to residential areas and the integration of online and offline experiences.

Factors such as family-oriented lifestyles, access to green spaces, and a desire for community engagement become crucial considerations in tailoring products and services to meet the expectations of suburban customers.

Technology and the Suburban Retail Experience
Technology plays a pivotal role in enhancing the suburban retail experience. Retailers should leverage tools like mobile apps and online platforms to engage suburban consumers, personalize their shopping journeys, and seamlessly integrate digital and physical touchpoints. This creates a tech-enabled shopping environment that aligns with suburban lifestyle expectations.

Community Integration
Suburban consumers value a sense of community. Retailers can benefit from integrating into the local fabric, participating in community events, and understanding the unique needs of suburban residents.

Retailers may need to adapt their store formats to suit suburban environments. Larger store spaces, outdoor seating areas, and a focus on family-friendly shopping experiences can resonate with the suburban lifestyle.

Local Fulfillment Centers
Retailers are exploring the concept of local fulfillment centers strategically placed in suburban areas. This allows for quicker and more cost-effective e-commerce deliveries to suburban customers.

Challenges and Considerations for Retailers in the Suburban Shift

Despite the opportunities, retailers face challenges in the suburban shift, including competition, zoning regulations, and the need for a deep understanding of local consumer nuances.

Navigating these challenges requires careful consideration, a deeper reliance on data analytics, and a flexible approach to adapt to the specific dynamics of each suburban market.

The Future of Retail Location Strategy

The suburban shift has altered the dynamics of retail location strategies. Retailers must adapt to this change, carefully analyzing the emerging suburban hubs and embracing the integration of online and offline channels to remain competitive in this evolving landscape.
Suburban areas are witnessing the rise of mixed-use developments that combine residential, commercial, and recreational spaces, and retailers can benefit from collaborating with developments to become integral parts of these suburban ecosystems.

Retail location strategy is likely to be shaped by continued technological advancements, sustainability considerations, and an emphasis on community integration. Retailers will need to stay agile, adopting innovative approaches to meet evolving consumer expectations and capitalizing on opportunities as they are presented.

Who Cares About Consumer Electronics?

Who Cares About Consumer Electronics? 1440 428 ASG

The consumer electronics industry is thriving, projected to balloon to nearly $1 trillion by 2029. This explosive growth reflects the profound impact electronics have on our daily lives. Consumer electronics are no longer just nice-to-have items for most people.

Today many consumers use tech to buy more tech; but decades ago, if you wanted the latest tech gadgetry, you’d head to the nearest Radio Shack. There you could purchase everything from electronics parts to the first iterations of the home computer and so much more.

Radio Shack led to the birth of consumer electronics stores like Circuit City, Ultimate Electronics, and Best Buy. People would flock to these stores, particularly on Black Friday, to get the latest TV, phone, VCR, and stereo system. But consumer electronics stores found it hard to stay relevant in a world of expanding online retail options. BestBuy continues to explore new ways to add value, and Radio Shack, once hanging on by an ethernet cable, is reportedly clawing its way back. The rest have long since boarded up the doors. That makes us wonder: Does anyone care about consumer electronics stores anymore? And how did we get here? Have selection, accessibility, and relatively lower costs caused us to take consumer electronics for granted?

A Tale of Two Location Strategies: Best Buy vs. Circuit City

In the 1970s, Circuit City was the top consumer electronics store in the country. The retailer had knowledgeable experts ready to help consumers make the best choices for their needs; it was widely considered a trustworthy place to shop.

But things change.

The internet equalized access to knowledge and more education consumers knew what they wanted to buy when they came to the store. Modern consumers wanted convenience, but Circuit City (like Blockbuster) failed to pay attention to the changing dynamics in the industry. And they did not recognize how desperately they needed to change their location strategy to appeal to consumers.

“Circuit City chose inconvenient store locations and consumers chose to visit the more convenient Walmart stores; it was slow to supply its customers gaming technology, failed to promote products from popular vendors like Apple; and its web site was underdeveloped just as Amazon was beginning to surge in popularity.” – Inc

Best Buy

Best Buy not only survived through the disruption of Amazon and the pandemic, but has managed to thrive. But how?

Best Buy embraces the evolving market by offering a compelling combination of physical experience, expert advice, and the convenience of a pre-owned market. During the pandemic, the retailer acted quickly to provide curbside service and adjust its business model to meet consumer demand. The brand didn’t just make it through the dark times, but came “roaring out of the pandemic era with 37% sales growth.” The secret to its success? Using data analytics to inform their retail location strategy.

“Best Buy recognized that 70% of US consumers lived 15 minutes or less from one of their physical locations. This meant they could offer a service where customers could use the website to view products, and then find out if the item they wanted was in stock at their local store. If so, they could simply place their order, and then head down to the store and collect it – much in the same way Starbucks offers its mobile order-and-pay service – cutting down on time spent browsing shelves in store.”
– Future Stores

Now, they are using that responsive approach while diversifying their offerings to appeal to modern consumers with Best Buy Health and strategic partnerships with hospitals and healthcare electronics that bridge the healthcare gap.

Consumer Electronics in Brick-and-Mortar

The consumer electronics industry faces a fascinating challenge. The very technology it offers has empowered consumers to bypass traditional stores in favor of online shopping. Direct-to-consumer giants like Apple establish their own retail spaces, while e-commerce behemoths like Amazon offer unparalleled convenience and competitive pricing, both diminishing foot traffic in electronics stores.

That said, dismissing physical retail entirely would be a strategic misstep; while convenience is a strong consumer driver, physical stores offer crucial advantages.

Electronics brands still benefit from partnerships with brick-and-mortar retailers. An in-store presence allows brands to showcase new devices, provide tactile experiences, offer personalized recommendations by knowledgeable staff, and provide pre-owned offerings catering to budget- and eco-conscious consumers.

Retail Strategy for the AI, 5G, XR Age

Consumers already rely on electronics to deliver a seamless lived experience; this will only become more prevalent as AI and 5G converge. Add holography and virtual reality to the mix and the world we experience in even the next five years will look remarkably different than the one we’re living in now—and it will largely be driven by consumer electronic devices that keep consumers connected to the world. Our devices have become critical tools for delivering the products, experiences and connections consumers want.

“Consumer electronics are a very peculiar industry, one that shares elements with the fashion and luxury industries, with the added pressure of being reference voices for innovation and new trends. This means that the evolution in consumer electronics ecommerce is far from over, and all its main actors will keep looking for a strategy that gives them at least a little advantage over its competitors.”.
– VTex

As a result, partnerships between retailers and consumer electronics brands are increasingly strategic, with collaborations geared toward creating immersive in-store experiences, leveraging online platforms, optimizing supply-chain logistics, and more.

Some examples:
Vizio & Walmart – The retail giant’s recently announced the $2.3 billion purchase of its largest TV vendor, giving Walmart a stronger foothold in the business of selling ads, subscriptions, and other revenue-generating activities.

Samsung & Best Buy – This strategic partnership involves co-branded promotions, pre-order campaigns, and in-store experience zones. Samsung benefits from prominent store placement, dedicated staff promoting their products, and amplified marketing reach through Best Buy’s channels.

Apple & Apple-Authorized Resellers – Apple partners with authorized resellers, allowing a wider physical presence while maintaining control over product and customer service.

Dyson & Target – Dyson partnered with Target to offer a curated selection of its products in select stores. This grants Dyson a physical store presence and broader brand exposure.

Future Opportunities and Challenges

Advancements in technology coupled with evolving consumer preferences and the rise of e-commerce has fundamentally reshaped electronics retail. Stores like Best Buy offer a compelling example of how to adapt.

Survival hinges on surpassing the simple act of selling electronics. Today, it’s about the entire customer experience: seamlessly integrating online and in-store options, prioritizing convenience, and offering personalized tech solutions. This shift acknowledges the ever-increasing demand for the latest gadgets while addressing the growing concerns around sustainability and ethical manufacturing. Building partnerships with brands that share these values becomes crucial to staying competitive in a landscape driven by tech-savvy consumers with ever-evolving expectations.

Don’t pull a Circuit City. Learn more about how retail location data can lead to success: Make the Right Move with Retail Location Data (consultasg.com)

Is Retail Theft Stealing the Shopping Experience?

Is Retail Theft Stealing the Shopping Experience? 1440 428 ASG

After allegedly stealing more than $75,000 in items from popular retailers like Target, Nike, Best Buy, REI and Dick’s Sporting Goods, two men are facing prison time for their roles in the thefts that stretched from June 2023 to January of this year. The San Jose, California, incidents are among those garnering national attention as retailers continue to look for solutions to combat a problem that has long been an issue for businesses worldwide.

From employing undercover surveillance teams to sticking items behind locked cases and removing self-checkout kiosks, many businesses have begun taking matters into their own hands to crack down on retail theft.

While there’s little doubt that retail theft is detrimental for businesses, some experts question whether retail theft is truly as formidable as media reports claim. Is it truly the cause of lack luster revenue performance for certain retailers and, true or not, has the perception impacted how customers shop?

Organized Meets More Violent Retail Crime

A National Retail Federation survey found that retailers reported a 26.5% increase in organized retail crime incidents in 2021. Organized retail crime (ORC) groups often operate with a high degree of sophistication, often out of the public view.

They may:

  • Use advanced techniques, tools, and strategies to carry out thefts, evade detection, and quickly move stolen merchandise.
  • Focus on high-value merchandise like electronics, designer clothing, and more that can be easily resold on the black market.
  • Leverage technology to aid in their criminal activities. This could involve the use of electronic counter-surveillance tools, communication devices, or techniques to disable security systems.

On the flip side, viral TikTok videos of smash and grabs are making consumers fearful, and retailers are being forced to take action – not just to protect their property and profits, but to ensure that their customers feel safe when coming into the stores.

Market researcher and journalist Pamela Danziger explained in an article in Forbes, “Retail crime is far from a victimless crime committed against a faceless corporation that can absorb the losses. Real people are the victims. And increasingly, retail criminals are using terrorist tactics of aggression, intimidation, even violence to put anyone off who might interfere with their crime.”

Target CEO Brian Cornell revealed to Investor’s Business Daily that the company saw a 120% increase in theft incidents involving violence or threats of violence during the first five months of 2023 and that inventory shrink would reduce profits by more than $500 million compared to 2022.

Is Retail Theft Really the Reason Stores Are Closing?

Recently, the National Retail Federation was forced to walk back serious claims about retail theft losses. Originally, the organization claimed that “half of the industry’s $94.5 billion in missing merchandise in 2021 was the result of organized theft.” However, retail experts estimate that number is closer to 5%—an extraordinary discrepancy.  Perhaps even more noticeable to consumers are the store closures of popular retail chains like Target after theft and organized retail crime in cities like Seattle, Portland, San Francisco and New York City.

Though employee and customer safety should not be overlooked, The Robin Report says blaming retail closures on organized retail crime may be exaggerated, and some of those closures may simply be attributed to mismanagement.

While shoplifting, employee theft, and organized retail crime may all play a role in undermining retail profitability, some of the culpability for retail closures may lie with inventory management issues and operational decisions as well.

In fact, retail analysts have pointed to inventory management as a significant challenge in the past few years amid excess merchandise and missing demand forecasts. They say better inventory management processes and upgraded systems can be a top strategy in loss prevention.

In Reality, Shrinkage Hasn’t Changed Much Year Over Year

According to the National Retail Federation, “… the average shrink rate in FY 2022 increased to 1.6%, up from 1.4% in FY 2021.” These numbers were “in line with shrink rates seen in 2020 and 2019,” according to the 2023 Retail Security Survey.

According to the same survey, external theft accounted for 36% of losses, yet 27% was attributed to process, control failures, and errors, leading Just Style to ponder whether “organized retail theft has become a convenient cover for internal flaws such as bloated inventories, heavy discounting, and employee theft.”

In a conversation with PBS, Neil Saunders, retail analyst at Global Data questioned the reality of the claims that retail theft is out of control.

“I think one of the reasons retailers mention theft so much is that it provides a narrative for things that are happening elsewhere in the financials,” he said. “So we have had a lot of retailers this year, for example, saying, well, our profitability is slightly down, our margins are slightly down. One of the reasons for that is because rates of theft have increased.”

Retail Theft: Impact on In-Store Experience for Customers

While some theft prevention measures can be successful, it’s important for businesses to understand that they may also influence the customer journey. Retail theft can have a significant impact on customer experience, affecting both the immediate shopping environment and the long-term relationship between retailers and their customers.

Balancing security with a positive shopping environment is crucial for retailers seeking to retain and attract customers. Here are several ways in which retail theft and the prevention strategies can influence customer experience:

Increased Prices

To compensate for losses incurred due to theft, retailers may raise prices on their products. This can result in higher costs for law-abiding customers, impacting their budget and diminishing the perceived value of shopping at a particular store.

Intrusive Security Measures

Visible security measures, such as surveillance cameras, security personnel, and anti-theft devices, can create an atmosphere of suspicion and discomfort for customers. Excessive security measures may make customers feel as if they are being treated as potential criminals.

Stockouts and Reduced Variety

Retail theft can lead to stockouts and reduced product variety. When items are frequently stolen, retailers may choose to limit their availability or discontinue them altogether. This limits choices for customers and may lead to frustration.

Increased Security Checks

Some retailers implement more stringent security checks at the checkout to prevent theft. This may involve additional bag checks or scrutiny of purchased items, leading to longer wait times for customers and potentially causing inconvenience.

Unpleasant Shopping Environment

Retailers may rearrange store layouts or use locked cases for high-value items, making the shopping experience less convenient. Disorganized displays and locked cases can contribute to a less pleasant and efficient shopping environment.

Stricter Return Policies

To combat fraudulent activities associated with retail theft, retailers may implement stricter return policies. This can inconvenience legitimate customers who may face more hurdles when returning products.

Damage to Brand Image

High levels of retail theft can tarnish a retailer’s reputation. A perception that a store is a frequent target for theft may lead customers to question the overall safety and security of the shopping environment.

Loss of Trust in Staff

If retail theft is a recurring issue, customers may start to lose trust in the store’s ability to provide a secure shopping experience. This lack of confidence can extend to store staff, leading customers to question the effectiveness of employees in preventing theft.

Diversion of Resources

Retailers may divert resources away from customer service initiatives to invest in theft prevention measures. This reallocation can impact the quality of service and attention that customers receive while shopping.

How Retail Theft Will Influence Retail Location Strategy

Retailers strategically choose locations for their stores based on various factors. Will retailers choose to avoid high-theft areas, or are they implementing innovative strategies to mitigate the risk associated with certain locations?

Already, we are seeing retailers close inner city stores where crime is higher and retail theft is more common. It is likely that new retail openings will factor crime statistics into their location strategy decisions. According to Investor’s Daily Business, the following retailers have already taken action:

  • Whole Foods closed its flagship store in downtown San Francisco in April after opening in March 2022.
  • Walmart closed four Chicago stores in April, citing annual losses in the “tens of millions of dollars” (but did not explicitly mention theft).
  • REI announced plans in April to close one of its best-performing stores in downtown Portland, citing shoplifting and higher crime. The outdoor retailer spent more than $800,000 on extra security in 2022.

Where Do We Go from Here?

Local and federal agencies are also coming to the assistance of retailers by providing new laws, better enforcement, and other support. The U.S. Congress introduced a bipartisan bill, Combating Organized Retail Crime Act of 2023, that expands federal enforcement of criminal offenses related to organized retail crime.

The bill is one of several collaborations needed to curb retail theft and address the threat of organized retail crime. Retailers will not only need to balance the prevention measures they take to avoid alienating shoppers but also work closely with authorities and each other to turn the tide.

Ultimately, the fight against organized retail crime requires a multifaceted approach that encompasses legislative support, collaboration among retailers and law enforcement agencies, and strategic deployment of security measures. By working together and remaining vigilant, retailers can better protect their assets and uphold the integrity of the retail industry.

Experiential Retail: A Balancing Act for Profitability and Appeal

Experiential Retail: A Balancing Act for Profitability and Appeal 1440 428 ASG

Transactional shopping is easy to do online, from the comfort of home, with free shipping and free returns. But consumers want a reason to leave their home, drive to your location, find a parking spot, and step inside your store—and it’s up to retailers to give it to them. And as the landlord, you want that foot traffic as much as the retailer does.

With attractions ranging from pop-up retailers with limited holiday engagements and entertainment spaces like theaters and concert venues to active leisure activities like axe throwing and escape rooms, today’s mall bears very little resemblance to these retail meccas of yesteryear.

Experiential retail shifts the focus from transactions to immersive experiences, aiming to offer customers unique, memorable interactions beyond what online shopping provides. It acknowledges that shoppers crave engaging, value-added experiences alongside their purchases.

Adapting to Experiential

How can landlords balance attracting foot traffic while safeguarding investments amid experiential retailers’ needs for space and tighter budgets? The short answer, of course, is to say yes. Offer flexible space, invite the experiential retailers in. Give consumers a reason to keep coming back.

Of course, it’s more complex than that and there are many factors that must be considered, but the mall of today represents a huge opportunity for retail growth and renewed consumer interest.

Doug Tilson, who leads ASG’s Tenant Representation, explains:
“The real struggle for landlords is walking this fine line between bringing in the experiential retailers that consumers want, while still meeting the financial goals for their shopping centers. A lot of these locations are publicly traded REITs with profit goals and shareholder expectations they must meet.”

Making the Most of Your Mall Space

How can landlords position themselves to benefit from experiential retail? How do they attract a beneficial combination of retail offerings that keep the traffic coming? Consider these factors:

Strike a Balance
How do landlords marry the need to show profits with less lucrative experiential retail tenants?
Tilson explains, “There is significant competition for space, especially in the top-tier shopping centers. So, there is a tradeoff between doing something the customer desires with the constraints of possibly lower returns,” he says. “If an experiential retailer pays less, does the landlord do it for the customer, or do they prioritize the more profitable traditional retailer? My advice: Look at your shopping center as an asset and stay relevant with your consumers. Ignore short-term quarterly earnings and focus on the long-term strategy.”

Curate Your Tenant Mix
Carefully curating the mix of tenants within a shopping center or complex is crucial. Selecting retailers that align with the experiential trend and offer unique, engaging, or interactive elements contributes to the overall appeal of the retail space, but they should not be the only priority.
“We saw this happen in many shopping centers when sit-down restaurants became popular,” says Tilson. “In a number of instances, landlords went overboard and ended up with an imbalance. They must be careful not to overdo any one type of retail. And consumers still want to shop; shopping centers still need traditional retailers. Don’t throw baby out with bath water. You still have to have products for consumers to buy, whether or not they have an experiential component to them.”

Embrace New Retailers, but Perform Due Diligence
Just because you may be considering bringing in more experiential retailers doesn’t mean you still shouldn’t perform due diligence. It’s important to maintain fiscal responsibility with new tenants, even if you’re providing more flexibility to the terms of the lease regarding space and scalability. Be sure to address the issue of liability, particularly as it concerns some of the more adventurous experiences.

Use the Fundamentals of Retail Real Estate Strategy
For landlords, consumer expectations may change, but the basic tenets of retail real estate investment have not. (For more, pick up Secrets of Retail Real Estate: How Successful Retailers Win by ASG founder Steve Morris). Location matters. Accessibility matters. The only thing that has really changed are the types of retailers. You’re more likely to have success with a grocery store as an anchor than a department store these days. And you may need to consider more flexible lease and space terms to attract the right kind of retailers to your space.

Embrace Agility
If the pandemic taught retailers anything, it’s that everything can change in an instant. Be agile and willing to change your strategy to suit shifting demand. Where department stores once ruled, it’s more likely your spaces will be filled with DTCs opening physical locations, medical retail, seasonal pop-ups, and experiential retailers. But this shift is an exciting one, because the changing dynamics of your location can be a draw for consumers who are looking forward to what’s next.

Design Stores for Flexibility
Flexibility is a crucial factor in designing retail spaces that attract experiential retailers. Consider allowing retailers to create dynamic and ever-changing environments by offering modular layouts, movable fixtures, and adaptable spaces that can accommodate distinct types of experiences.

Integrate Technology
Incorporating technology into retail spaces is necessary with experiential retail. From augmented reality (AR) and virtual reality (VR) elements to interactive displays and seamless online-offline integration, retail landlords should supply the infrastructure necessary to support these technologies.

Prioritize Sustainability
Embracing sustainability practices can resonate with consumers who are increasingly conscious of environmental issues. Retail landlords can encourage and support eco-friendly practices among their tenants, creating a positive and responsible image for the entire retail space.

Analyze the Data
Leveraging data analytics can help retail landlords understand consumer behavior and preferences. This information can be used to tailor experiences, optimize tenant mixes, and continually adapt the retail environment to meet changing consumer expectations.

Perfectly Positioned
Landlords can embrace experiential retail while taking a balanced and prudent approach by implementing these strategies. This holistic approach allows retail landlords to position their spaces as destinations rather than mere transaction points, creating a more compelling and competitive retail environment that will attract consumers for the long-term, while minimizing the risk of financial insolvency.

Modern Landlords and the Department Store Dilemma

Modern Landlords and the Department Store Dilemma 1440 428 ASG

As traditional department stores grapple with significant losses in a challenging retail landscape, modern landlords should adopt flexible leasing models to remain competitive. To navigate changing consumer preferences, department stores must innovate by investing in technology, enhancing online shopping experiences, and forming strategic partnerships. Success stories from adaptable retailers like Von Maur, Bloomingdale’s, and the unexpected return of Toys “R” Us offer insights into strategies for reinvention.

Department stores have been on a tough journey lately, and a big part of that story revolves around changing consumer behavior and the dynamics of retail real estate. Stores have seen a dip in foot traffic, leading to a struggle to pay the rents demanded by retail landlords.
According to Modern Retail, in just one quarter in 2023, Macy’s recorded $22 million in net losses, Kohl’s profits plunged 60% to $58 million, and Nordstrom’s net sales dropped 8.3%.

But it didn’t always used to be this way.

“Not only did department stores sell everything people needed to clothe themselves and furnish their homes, but they took advantage of the fact that, for the first time, consumers had disposable income. Department stores provided demos, offered lectures, and hosted entertainment events. Shopping was – get the irony here – an experience.”
– Carrie Barclay, President and CEO, ASG

Department Stores Struggle to Keep Up

This history of the department store is a reflection of our culture. But according to Frontier Economics, “the pace of the changes in the last year, including rising costs, channel shift and fast-evolving customer habits, has pushed many department stores to the brink. Even the biggest and best-known brands have faced difficulties. House of Fraser is under new ownership; Debenhams is fighting hard to stay alive; and John Lewis has reduced staff bonuses for the first time in over 60 years.”

Economic shifts and rising operational costs have made it tough for these former retail giants to sustain their traditional models. As a result, we’ve seen closures and restructurings as department stores grapple with these challenges. Meanwhile, shoppers are after more personalized experiences and specialized products, which many department stores find tricky to provide with their one-size-fits-all approach.

This shift in consumer behavior has hit the bottom line for these stores, putting pressure on their ability to keep up with the usual high rents in prime locations.

So, what is a modern landlord to do? Our top advice—be flexible.

Flexibility in leasing department store spaces allows landlords to remain responsive to market demands, attract a wider range of tenants, optimize space utilization, and mitigate risks, ultimately contributing to the overall success and sustainability of department store properties.

What’s Actually Happening to Department Stores?

Many traditional retailers have adapted to the digital age, exploring online sales channels, and implementing innovative strategies to stay competitive. The ones that didn’t are going the way of Kmart, like the following examples.

Bed, Bath, and Beyond
Bed, Bath, and Beyond went from being the retailer on top of the world in the post-economic downturn of 2008 to filing bankruptcy, suing suppliers, and being eaten up by Overstock in 2023. What happened?

The failure is “the result of an increasingly unwieldy corporate structure and its failure to fully reckon with the ascendance of online shopping,” according to the New York Times. In the article, Neil Saunders describes their situation as a death spiral, mostly caused by mishandling of debt.

Bed Bath & Beyond’s stores have closed, but Overstock acquired their intellectual property and took the BBB name in order to “acquire new customers and cement itself as a go-to home goods retailer,” according to CNBC.

Tuesday Morning
Tuesday Morning has closed its remaining 487 stores in 40 states after being approved for bankruptcy. Like Bed, Bath, and Beyond, the company was overextended, and when Wells Fargo increased their cash reserve requirement from $10 million to $30 million, it effectively eliminated any liquidity they had, as explained in a Retail Dive brief.

What Department Stores Can Do to Reinvent

The demise of the department store should be a wake-up call to all retailers to adjust course with the following strategies.

Adapt and Innovate
To survive and thrive, department stores must adapt to evolving consumer preferences. Investing in technology, enhancing the online shopping experience, and incorporating sustainable practices are crucial for staying competitive in today’s market.

The aging Boomer population and the multigenerational increased focus on health has opened doors to medtail, making “retail space a strategic necessity” that has created a dynamic landscape that continues to evolve as both the health care and retail industries face unique challenges.”

Collaborations and Partnerships
Strategic collaborations with popular and emerging brands can breathe new life into department stores. By creating exclusive partnerships or hosting pop-up shops, these stores can attract a diverse range of consumers and generate excitement around their offerings. Grocery stores and beyond are focusing more on consumer values, from sustainable, locally sourced products to products that are committed to protecting the environment.

Focus on Experience
Successful retailers are increasingly focusing on creating memorable in-store experiences. From interactive displays to immersive technologies, department stores must go beyond simple transactions and offer an environment that engages and delights customers.

As we previously reported, “The modern mall is undergoing a remarkable transformation to meet the changing needs and high expectations of today’s consumers. We are excited to be at the forefront, watching how retailers and mall owners embrace innovation, creativity, and technology to reinvent the mall experience. From immersive and experiential offerings to convenient and sustainable practices, the modern mall is poised to become a dynamic and engaging destination that goes beyond traditional retail.”

Contemporary Department Stores Getting it Right

While some department stores have sounded the death nell and others are facing imminent demise, several department stores are demonstrating a level of flexibility and agility that may help them survive in the modern era.

Von Maur
Headquartered in Davenport, Iowa, Von Maur is the parent company of Dry Goods, a women’s contemporary fashion store targeted toward modern young consumers. Von Maur is expanding Dry Goods rapidly, with 11 new store openings in 2023. Von Maur Dry Goods has been in business since 1872 but have managed to reinvent themselves time and again to keep up with consumer demand. Today’s focus is “fashion-forward style meets old-fashioned customer service.”

Bloomingdale’s
It might be surprising to see Bloomingdale’s on the list of hopeful success stories, but they have made some big moves to remain relevant, including appointing a new CEO. Unlike their parent company Macy’s that continues to struggle with relevancy and operational efficiency, Bloomingdale’s shows promise, says GlobalData Retail managing director Neil Saunders, who believes the new CEO’s international connections and experience will benefit the retailer.

In an interview with Modern Retail, Saunders said, “There are good brands in there. There’s a good selection. But really, there needs to be more differentiation. There needs to be more exclusive lines, more young, up-and-coming designers. There needs to be more newness.”

Toys “R” Us in Macy’s
Much to the devastation of generations of kids, Toys “R” Us closed their stores in 2018 and filed for bankruptcy. No one expected the brand to reemerge, but they now have 452 shop-in-shops in Macy’s around the country and have plans to open 24 flagship stores. Their new retail location strategy – air, land, and sea – will see stores opening in airports, on cruise ships, and in strategic locations throughout the U.S.

The Future Belongs to Innovators
“If the high street and the city centre are to survive, these important landmarks must find new ways to become destinations. Otherwise, the city may succumb to the 21st century’s version of retail modernity: the cavernous, windowless, invisible, under-regulated, under-taxed Amazon warehouse.” – Apollo

The state of department stores reflects a broader transformation occurring in retail. While closures of big box, specialty, and legacy stores may signal challenges, they also present opportunities for adaptation and innovation. As the industry continues to evolve, the key to success lies in the ability to embrace change and meet the dynamic needs of today’s discerning consumers.

Ethical Fashion: Revolutionizing Material Creation

Ethical Fashion: Revolutionizing Material Creation 1400 428 ASG

Sugar cane, seashells, and mushrooms—sounds more like a list you’d find on a recipe card than on a clothing label, right? But innovative brands are manufacturing clothing using such renewable materials, aiming to take a bite out of fashion’s substantial environmental impact and move toward a more ethical fashion reality.

Innovation in textile production and biofabrication techniques are facilitating the creation of textiles with desired properties like biodegradability, durability, and performance characteristics while using closed-loop systems that recycle water and minimize chemical usage in the manufacturing process.

But fast fashion is still favored by many—the market is valued at $123 billion compared to the $8.16 billion ethical fashion market. As we have watched sales of sustainable clothing steadily rise over the past decade, the fashion industry has quietly been making strides in material creation to minimize environmental impact.

Innovative Materials for Sustainable Fashion

The apparel industry is widely considered one of the worst-polluting, responsible for huge volumes of greenhouse gas emissions. In 2021, the apparel industry emitted approximately 897 million metric tons of carbon dioxide equivalents into the atmosphere. This is estimated to increase to almost 1.3 billion metric tons by 2030 if no drastic action is taken.

The pressure for drastic action is compelling companies to shift their focus towards more responsible practices, emphasizing renewable materials, and exploring innovative technologies to drive sustainability in the fashion industry.

“Sustainability in retail is here to stay, but such a commitment must be more than just words on a page. A genuine commitment to the environment needs to be reflected in every part of your supply chain and the decisions you make regarding how and from where you are sourcing ingredients, who you’re hiring to make your clothing, and how you’re treating people and the environment along the way. Consumers want to see not just a goal to be carbon neutral by 2035 but the steps you’re taking to ensure you can achieve that.”
– ASG

Bioengineered Materials and Brands Blazing the Way

Allbirds is a leader when it comes using renewable materials like wool (wicks away moisture while being soft and comfortable), sugarcane (used to make comfortable and supportive insoles), Eucalyptus tree fibers (a lightweight, breathable fiber made with responsibly sourced Eucalyptus), and castor bean oil.

TômTex is a bio-based, high-performance material created from seashell or mushroom waste. They focus on organic dying practices and recyclability; their products are 100% biodegradable. They made their first appearance in NY Fashion Week in 2022, where they showed off a two-design collab with Peter Do.

Smartwool is a company committed to transparency and sustainability. They produce socks, base layers, and other products made of Merino wool. Merino wool is soft, manages moisture, regulates temperature, and resists odors. They use reclaimed wool to create their socks, preventing those scraps from going to a landfill.

Pinatex is a pineapple-leaf based material that has been used as a sustainable alternative to traditional leather by ethical footwear brands like Po-Zu and Nae Vegan Shoes. Hugo Boss and H&M have also incorporated Pinatex into some of their collections.

Stella McCartney, the renowned fashion designer known for her commitment to cruelty-free fashion, collaborated with Bolt Threads, creator of Mylo, a mushroom-based leather alternative, to create The Frayme Mylo bag. It was the first-ever commercially viable product made from mushroom-based leather. Stella McCartney plans to integrate Mylo into their main collections of bags going forward.

Orange Fiber, a sustainable material made from citrus byproducts, was the highlight of a recent collection by the Italian luxury fashion house Salvatore Ferragamo. The collection featured dresses and scarves made from the citrus-based fabric. H&M uses Orange Fiber in its Conscious Collection as well.

Keel Labs, formerly AlgiKnit, is a biomaterials company focused on creating sustainable yarns from kelp, and are the developers of Kelsun fiber. The company works directly with fashion brands to develop biodegradable and renewable seaweed-based textiles. In 2022, the materials innovator received a $13 million infusion of investment from VCs, including H&M CO:LAB, the investment arm of H&M Group.

Spiber’s Brewed Protein materials are fibers, films, and other types of materials that are manufactured through fermentation of plant-based ingredients. Everything from filament yarn to fleece can be made with this innovative process. Sportswear brand GOLDWIN and The North Face Japan have used the trademarked fiber, which has been likened to spider silk in feel and durability, in limited edition collections.

Greener Fashion, Greater Loyalty

The fashion industry’s shift toward sustainable material creation is a crucial step in minimizing its environmental impact—and it may be a necessary step to maintain a strong and loyal consumer base.

“Time is running out for retailers who are lagging behind customers. The circle is definitely closing around the circular economy.” said Sanford Stein, in The Robin Report

Companies that adopt eco-friendly practices, avoid harmful processes, and embrace renewable materials can help drive the sustainability consumers say they seek. As we all become more conscious of the impact of our choices, the global shift towards sustainable fashion will accelerate. By revolutionizing material creation, fashion is taking a giant leap towards a greener and more sustainable future for all.
As brands embrace eco-conscious methods, shun harmful practices, and embrace renewable resources, they actively fulfill the sustainability consumers crave. As our awareness of our personal impact on the environment grows, the push for sustainable fashion will continue to gain momentum worldwide. By revolutionizing material creation, fashion can propel us toward a greener, more sustainable future.

Every business is trying to be more “sustainable.” Why is it so darn hard to do it? Read more:
Sustainability: What Does it Take? (consultasg.com)

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