Location Strategy

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?

@aubrey.janik

What happened to Circuit City? #greenscreen #circuitcity #MacysGiftTok #SpotifyWrapped

♬ original sound - Aubrey Janik

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.

The Modern Airport is the Destination
The Modern Airport is the Destination 1440 428 ASG

Imagine visiting an airport that not only serves as a transport hub, but also doubles as an adventure park, shopping mall, and sanctuary for relaxation.

In today’s travel landscape, airports are redefining themselves as destinations in their own right, offering travelers and locals alike experiences that go beyond the usual concept of an airport. Whether you’re looking for a taste of local culture, thrilling entertainment or an oasis to escape the stresses of travel, airports are evolving to cater to a diverse range of preferences and needs.

The timing couldn’t be more important. Industry experts say an expected 9.4 billion passengers are expected to travel by air in 2024, an important milestone as the global industry continues to recover post-pandemic. By comparison, the year 2019 saw 9.2 billion airline passengers.

The transformation of airports into dynamic, multifaceted spaces reflects a growing trend that enhances the travel experience, making the journey as memorable as the destination. Here’s how they’re doing it.

Amplifying Local: Airports Embracing Regional Flavors and Culture

At Adelaide Airport in South Australia, you’ll find 100 Miles, a restaurant with a unique philosophy: It exclusively uses ingredients procured from within a 100-mile radius of the establishment. Embracing the flavors of the region, this innovative eatery offers a menu featuring locally-sourced, seasonal ingredients sourced from the city’s Central Market and paired with South Australian wine.

The conceptual restaurant amplifies local flair and offers the nearly 6.5 million passengers traveling through the airport each year a taste of the region’s culture and products.

Yet 100 Miles isn’t just a restaurant; it’s a snapshot of the modern airport, reflecting the growing trend of providing authentic and locally-inspired experiences to travelers.

Across the ocean in Seattle, an expansion currently under way of the C Concourse at the Seattle-Tacoma International Airport is inspired by the Pacific Northwest landscape. The more than 145,500-square-foot expansion, expected to be complete in 2027, adds four additional stories above the airport’s existing concourse.

With enhanced views of the surrounding Olympic Mountains as the backdrop, the project provides travelers with additional dining and retail spaces, as well as amenities like interfaith prayer and meditation rooms and a nursing suite. A marketplace located in the middle of the concourse will be modeled after Seattle’s famous farmers’ markets and will serve as a location for more retail kiosks and musician performances.

As part of the Metropolitan Washington Airports Authority’s multi-year redevelopment plans, Reagan National Airport and Dulles International Airport will see a boost of local flair. D.C.-area coffee shops, gift shops and apparel shops will add locations inside the airports, alongside a new restaurant at Dulles from Fabio Trabocchi, a celebrity chef and owner of the Italian restaurant Sfoglina, which is nestled in the northern D.C. neighborhood of Van Ness.

Revamped Retail: Transforming Airports into Entertainment Destinations

Airports are not only redesigning retail and entertainment spaces to cater to the preferences of today’s travelers, but also becoming entertainment hubs – not simply a necessary stop.

At Perth Airport in Western Australia, guests can escape a haunted house, explore a space station, or battle pirates on the high seas– all while never leaving the first level of Terminal 1 International. It’s all part of the airport’s enhanced VR experience, Gaming Point, which offers VR escape rooms to elevate the travel experience. Gaming Point also allows guests to choose from a library of more than 50,000 games to play on state-of-the-art gaming desktops. Once gamers leave the airport, they can continue to play using their own Steam network account.

Have a long layover? No problem. Check out the flight museum or the used book store at the Milwaukee Mitchell airport, or play interactive games in Buzz Zones at the Hong Kong International Airport. Immerse yourself in art at one of Miami International Airport’s galleries, or make sure you plan a special trip through the Munich Airport during the holidays where you’ll find a Christmas market that features an ice skating rink, carousel and an open market selling handmade crafts.

Airport Innovation: Setting New Standards for Comfort

It’s not all about entertainment. International airports are also elevating passenger comfort and relaxation during layovers.

At the forefront of innovation, Auckland Airport’s Strata Lounge boasts private wellness pods that visitors can book in advance. These pods create a calming ambiance through gentle, customizable lighting, immersive floor-to-ceiling photographic murals of tranquil forest landscapes, and modular sofas that can be converted into single and twin sizes.

At Dubai International Airport, global travel hospitality brand Airport Dimensions has installed its largest “Sleep and Fly” lounge where guests can unwind and even take a power nap in between flights. Afterward, guests can freshen up in luxurious showers stocked with Ayurvedic spa products, enhancing the sense of relaxation and rejuvenation.

The “Sleep and Fly” lounge is a prime example of how airports are setting new standards for airport comfort, reflecting a growing trend in which airports worldwide are redefining the passenger experience. As travelers increasingly seek unique and enjoyable layover experiences, these airports are taking the lead in offering services that elevate the airport experience to new heights.

Airports as Community Hubs: Enticing Locals to the Airport

While most people who walk through the automatic doors of an airport are on their way to somewhere else, more airports are reimagining what it means to be a community hub.

By transforming airports into hubs for socializing, recreation and even a whole day of entertainment, they are no longer simply places for travelers in transit. This shift in perspective is enticing locals to visit the airport for activities – many of which have nothing to do with traveling.

One example of this transformation that sets the standard for airports serving as the new mall is the Changi Airport in Singapore, home to the Jewel mall. Nearly 300 retail and dining outlets offer a variety of airport shopping center experiences at the mall. Near these airport retailers is a 150,000-square-foot Canopy Park that includes gardens, topiary walks, bouncing nets, mazes and giant slides that create a fun airport experience. While these areas are part of the airport complex, they are located in the landside zone and are accessible to anyone – flight ticket or not.

At the Detroit Metro Airport, visitors have access to two terminals with a DTW Destination Pass, and at Orlando International Airport, you can visit terminal C with a visitor pass. While these passes allow family and friends to surprise loved ones arriving at any of the gates near the terminals, it also offers an opportunity for locals to access a PGA tour shop, gather for a drink at a taproom, get a massage and eat at one of dozens of restaurants.

The distinction between travelers and locals blurs in these locations, as airports are increasingly working to invite everyone to explore a world of social interaction within their confines.

Wellness in Travel: Enhancing Passenger Well-Being

1 in 3 business travelers say the journey itself is the most stressful stage of their trip out of town. And in a post-pandemic world, only about a third of those traveling for business are happy to be back on the road, citing stress and exhaustion for their hesitance.

Even those traveling for vacation often experience stress. More than 90% of Americans say traveling can be stressful.

Many airports are seeing an opportunity to address this stress by enhancing the passenger experience. While comfortable lounge chairs, calming teas and neck warmers to relax tension may sound like pampering tools found in a luxurious spa, they are actually part of the Centurion Lounge space at Houston’s George Bush Intercontinental Airport.

Airports like this one are increasingly focused on promoting passenger well-being by introducing a range of amenities and services that cater to holistic health, relaxation and mental peace. This shift in perspective reflects a broader trend in the travel industry, as travelers seek ways to alleviate the stress and anxiety often associated with journeys.

Other key developments in this wellness-centric transformation include:

● Bringing nature into the terminal through incorporating natural elements like dog parks and walking paths.
● Offering healthier dining options like at Newcastle International Airport in the UK, where you can find a range of vegan, vegetarian and other healthy food options.
● Wellness-centric lounges that offer private sanctuaries to de-stress and take a break from the airport crowds.
● Digital gyms like at the Incheon Airport in South Korea, where passengers can participate in interactive visual workouts for different ages.
● Wellness services, including flu shots, IV infusions, diagnostic testing and even virtual yoga and meditation services offered through XpresSpa at airports in New York, Phoenix, and Salt Lake City.
● Noise pollution reductions that eliminate loudspeaker announcements (and additional passenger stress) at Zurich Airport.

From celebrating local culture where passengers can embrace regional flavors to ensuring visitors are entertained or comforted, airports have undergone a remarkable transformation. With more than 9 billion passengers expected to travel by air in 2024, it’s crucial for airports to evolve and carefully craft elevated experiences so that they are not merely a means to an end.

The way and why people travel are changing. Read about The New Bucket List Travel: https://consultasg.com/redefining-bucket-list-travel/

The Retail Store Prototype is Dead
The Retail Store Prototype is Dead 1440 428 ASG

Once upon a time, when a store launched, there was a flagship on 5th Avenue in New York City that served as the prototype store. From there, a standard cookie-cutter rollout of smaller, but similar, stores proliferated across the country as the brand grew. In fact, it became so cookie-cutter that it led our CEO, Carrie Barclay, to write about the threat of retail homogeny in 2017.

As Carrie wrote then, homogeny is for milk, not for retail. Today, those prescient words are proving themselves again and again.

Time to Toss Out the Recipe Book

There is no cookie-cutter roll out anymore. In fact, without the right data, it’s hard to know where to locate a new retail store, let alone the design that should be implemented.
You might instinctively think New York City is where you need to be, but the data may point to better success in Indianapolis.

Most retailers vying for today’s customers must be able to deliver a hyper-personal, customized experience that is different in every location. The store a brand opens in Buffalo, New York simply cannot be the same store as the one in Raleigh, North Carolina.

Retail Location Strategy and Store Design Are Intertwined

Today’s retail location strategy and store design must be relevant and deliberate. Rollout is a complex dance where every store is now a prototype.

As retailers try to control the cost of building, sourcing materials from the local area is a smart approach, but that means different material boards for each region; styles and materials for stores in the Pacific Northwest will be different from those in the Midwest.

Rather than see this as another wall barring retail growth, brands can embrace the opportunity to use location, materials, and product mix together as a way to provide a unique experience in every store. Not only do local customers appreciate the local feel, but travelers enjoy going into to a store they love in a different location and noticing local or regional differences in the retail environment.

“Don’t go too quickly. Take it slow. You don’t need to go from 0 to 20 stores in a year—especially if you’re just starting out. You don’t have to commit to rolling something out across the entire fleet. Give yourself the chance to evaluate what works and what doesn’t. How does it work for the staff? Customers? What if we can’t duplicate it? Or if you must change it for every single store? Someone needs to be the keeper of the standards and organization, and that’s where we step in,” says Jennifer Crawford, Senior Project Manager at ASG.

Opportunity to Meet Customers Where They Are

Post-pandemic, consumers are shopping closer to home, but they still seek unique and memorable experiences when shopping in person – and they do love to shop in person. These factors are shifting location strategies for retailers, leading to store openings outside of the typical launch areas – and introducing unique store designs for certain neighborhoods and college campuses.

“You can maintain a national footprint and effectively leverage regional and localized design. Bringing these strategies to scale can be a differentiator for retailers who want to thrive, not just survive.”

—Carrie Barclay, President and CEO of ASG

When assessing retail spaces, location data emerges as a distinct form of insight, capable of revealing unexplored opportunities for every potential location. This data explores more than just traffic patterns, structures, and roadways. In addition to all that information, it also reveals extensive demographic data about the consumers living in the area, including median income, home values, and more.

With data-driven insights, brands can test a variety of different prototypes to see what works where. Small-format stores and flagships can benefit from the insights that give a human touch to the brand.

How Are Brands Repositioning?

Retailer solebox is a shoe company in which every location is specifically designed for where it’s located. Their website explains, “The stores all have their own design concept and stand for themselves – what connects them is the carefully curated assortment. The latest sneakers, streetwear from different continents but also some pieces from the high fashion world can be found at solebox.”

Jeni’s is a popular ice cream shop with more than 25+ locations. Travelers love seeking out Jeni’s in the towns they visit because they know they’ll find something different at each location. Jeni’s has developed a winning strategy of choosing a location, like Congress Street in Austin, Texas, and then creating flavors based on the local market. They also appeal to customers’ desire for sustainability and inclusivity by using Direct Trade ingredients, employing a diverse team of people, and working to improve our environmental and social impact.

“People go on first dates at Jeni’s Scoop Shops, people get proposed to, and have their weddings with us…Our customers send our ice cream for Mother’s Day, bereavement gifts, and anniversary gifts. We are a part of people’s lives,” said Chelsea Clements, former director of ecommerce at Jeni’s, to ShopperHQ.

American clothing and accessory retailer Vineyard Vines was founded in 1998 on Martha’s Vineyard by brothers Shep & Ian Murray, who still lead the company. They now operate more than 70 retail locations, including an outlet division, a successful e-commerce business, a domestic distribution center, and expanding corporate headquarters. Shep & Ian’s philosophy that “every day should feel this good” and “if you’re doing what you love, you’ll be successful” is a major part of their brand. In 2020, they reevaluated their location strategy and, working with ASG, discovered that the brand does best along the coastlines.

To compete effectively for today’s experience-driven consumer, retailers must toss out their old playbooks and develop location and design strategies that connect with consumers where they are. The traditional store prototype is dead; now, every store is a prototype that allows the brand to learn more about what customers want and fine-tune their approach.

Read more about ASG’s retail location and insights tool, ASGEdge, which helps retailers examine potential sites using a forward-looking modeling that scrutinizes an extensive list of variables, including proximity to competitors, demographic insights, and consumer behavior.

Medtail is Moving In
Medtail is Moving In 1440 428 ASG

Once one of the largest shopping centers in Tennessee, One Hundred Oaks in Nashville faced a prolonged downward spiral. Like many malls, it enjoyed success as a thriving urban shopping hub with nearly 900,000 square feet of retail space. However, the story of One Hundred Oaks mirrors a broader trend seen across America, where malls struggle and eventually succumb to closure due to changing consumer preferences, community migration, and the rise of e-commerce.

Nearly half of the former mall’s property is dedicated to Vanderbilt University Medical Center’s clinical and administrative support operations with 22 specialty clinics, a pharmacy, imaging center, and laboratory.

The opportunity came at a time when Vanderbilt University Medical Center needed to expand its services to keep up with patient demand. Despite the unconventional nature of the location at the time, the transformation of the One Hundred Oaks site made sense. It was just four miles away from downtown Nashville—creating a medical space at a time when there was a demand for accessible health care.

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.

medtail

Meet Medtail

Referred to as “Medtail,” this transformation within retail stems from healthcare tenants moving away from expansive hospitals and independent structures to more accessible locations to deliver in-person services that cannot be accessed through online platforms.

And these healthcare services aren’t only the vision centers, dental clinics, or urgent care facilities you typically see occupying former malls, strip malls, and other commercial spaces. Health and wellness providers of all kinds—therapists, sleep clinics, dermatology centers, and even university medical systems, as we’ve learned—are playing a pivotal role in revolutionizing the healthcare real estate sector.

Today, major healthcare systems, including the University of Rochester, are embracing this trend. The university constructed a 350,000-square-foot ambulatory orthopedic facility at The Marketplace Mall site in Henrietta, New York. The $227 million project—the largest offsite project the university has ever undertaken—will include an outpatient surgery center and a physical therapy space.

Similarly to the former One Hundred Oaks space, the University of Rochester project is an example of how new life can be breathed into an unoccupied retail space—the outpatient surgical center is a former Sears store—by converting it into a space that meets the country’s growing demand for more healthcare infrastructure.

At a time when a healthcare worker shortage and endemic COVID-19 are making the outlook of the healthcare industry less clear, one trend is evident: There is a dire need for more healthcare infrastructure. And that infrastructure may look different than expected, but it’s transforming the way we access medical care.

The Face of Medtail

Successful Medtail businesses have a keen awareness of the demand for accessible healthcare solutions. These setups strategically position healthcare services in high-traffic areas, making medical attention conveniently available where people already frequent, redefining the accessibility and approachability of healthcare.

A Tether Advisors survey found that nearly 80% of private equity, commercial real estate, and retail healthcare respondents believe Medtail investment will increase. You don’t have to look far to see proof.

  • VillageMD and Walgreens are opening of nearly 600+ full-services doctors’ offices. The clinics, located inside Walgreens pharmacy locations, will staff more than 3,600 primary care providers. The company says at least half the locations will be in medically underserved areas.
  • In Winona, Minnesota, a once vacant Kmart now serves as a primary care clinic for Gundersen Health System. Vacant since 2014, the building now houses several medical specialty offices, including family and internal medicine, pediatrics, women’s health, imaging services, occupational therapy, and an eye clinic.
  • About four hours north in Duluth, Minnesota, developer Kraus-Anderson converted a former Younkers department store into an adult and pediatric therapy facility for Essentia Health. The 45,000-square-foot facility includes gym spaces, treatment rooms, and spaces for rehabilitation psychology and support groups.
  • After an economic downturn during the pandemic, the Good ‘N Plenty restaurant closed in Lancaster County, Pennsylvania. Well Spring Care Inc. purchased the 8.5-acre property in 2022 to convert the structure into a 24/7 medical clinic for the Amish community.

Research shows that nearly 20% of retail space is now leased by medical providers, up from 16% in 2010, and it shows no signs of stopping.

What’s Driving Medtail?

What’s behind this surge in utilizing retail space for medical services? One of the biggest key drivers is convenience.

While convenience may mean proximity to one consumer, it may mean avoiding enormous hospital campuses to another. A vast majority of hospital and health systems say they expect a continued increase in outpatient volumes through this year and beyond. In fact, 95% of health leaders surveyed in the Guidehouse and Healthcare Financial Management Association report say outpatient volumes will increase this year alone, and 40% expect jumps of 10% or more.

While many patients may prefer to bypass navigating through complex facilities to find a physician or healthcare specialist, these statistics also beg the question: Is there even enough room at current healthcare facilities to accommodate rising patient numbers?

Small communities in remote areas also once had little access to medical facilities, with patients forced to drive dozens of miles to see a specialist. With Medtail’s rise, rural patients are now seeing more options available to them.

There has also been a shift in how healthcare has embraced preventative wellness, recognizing the importance of proactive measures and offering services that empower individuals to maintain their health and well-being before issues arise.

Look no further than Dollar General to illustrate this transformation. Not to be left in the dust by Medtail leaders Amazon, CVS, Walmart and Best Buy, the discount retailer created a healthcare advisory panel to assess opportunities in Medtail and healthcare under its DG Wellbeing brand.

Earlier this year, Dollar General began teaming up with DocGo, a mobile health and transportation service provider, to pilot three mobile health clinics. Large vans in three Tennessee store parking lots now offer customers basic, preventive, and urgent care services, as well as lab testing to reach underserved populations in high-traffic areas.

Malls experienced among the highest vacancy rates in the fourth quarter of 2022, with an average rate of 8.7%. General retail locations fared much better at just 2.5%. The number of empty office buildings looked even more bleak, with a record 963 million square feet of office space unoccupied in the United States at the end of the first quarter of 2023.

Commercial leasing agents may feel like they have their work cut out for them. Yet reusing underutilized retail space offers a glimmer of hope and opportunity in these changing times. Opening retail spaces to health and wellness businesses can not only bring new life to empty storefronts while also tapping into the growing demand for accessible medical services.

Incorporating Medtail is just one way malls are transforming to reflect consumer behavior. Learn about an exciting new chapter for the modern mall.
Retail Location Data

Make the Right Move with Retail Location Data
Make the Right Move with Retail Location Data 1440 428 ASG

In the retail industry, where competition is cutthroat and every move matters, the right location can be the ultimate arbiter of success. Yet, astonishingly, many ambitious retailers fail to recognize the untapped potential and invaluable insights that retail location data offers. 

We get it. It’s easy to get wooed by a vacant retail space in a trendy neighborhood or an open location that has high foot traffic at first glance. But ignoring valuable insights before making a decision can lead to missed opportunities and potential pitfalls.

Empowered with retail store location analysis, retailers can strategically select a site that provides the best opportunities to achieve objectives and maximize profit potential. 

But what kind of information is useful in determining the right location for your retail business so that you can make the best decision for long-term success?

A Data-Driven Approach to Evaluating Retail Locations

In a dynamic marketplace, retailers must stay ahead of the curve before they ever even open. Harnessing the power of data and leveraging it to make informed decisions about where to invest in real estate is critical in today’s competitive retail landscape. 

But what exactly is location data, and how can it help your business? On a macro level, location data refers to information that indicates the geographic position of places, people or objects. While location data can provide details like latitude and longitude coordinates or direction of movement, this information can also provide valuable details like patterns, trends and even historical information that can help businesses make important decisions. 

For example, this type of data is widely used in targeted advertising. By analyzing location data, businesses can understand the behavior and preferences of their target audience in different locations, enabling them to tailor their marketing campaigns accordingly. 

Location data can also be utilized in supply chain management, helping businesses optimize logistics, track shipments and improve overall operational efficiency. By analyzing historical location data, businesses can identify patterns and trends, optimize routes and reduce delivery times, ultimately saving costs and enhancing customer satisfaction.

When evaluating retail spaces, location data is a specialized type of intelligence that can unveil hidden secrets and untapped potential of each possible storefront. The data isn’t only about roads, buildings and traffic patterns. Location data can unveil who lives in an area, their average incomes, the types of homes they live in and more demographic details. 

Thanks to advances in location data, retailers can now explore potential locations by leveraging sophisticated analytics and predictive modeling that analyzes a wide range of factors like competitor proximity, demographic information, and consumer behavior.

Retail Location Data

Key Data Points when Evaluating Locations

A retail store location analysis involves examining several data key points that include:

  • Demographics: Beyond population size and income levels, savvy retailers now delve into the nuanced intricacies of the community. They unravel the aspirations, values, and lifestyles of potential customers, tapping into the emotional connections that drive purchasing decisions.
  • Competition: Competition is no longer just a hurdle to overcome. It’s an opportunity for collaboration and differentiation. Retailers armed with this new mindset embrace the strengths and weaknesses of their counterparts, crafting innovative strategies that set them apart. By harnessing the power of partnerships and symbiotic relationships, they create unique experiences that resonate with customers on a deeper level.
  • Foot traffic: Foot traffic analysis evolves into an art form, a delicate dance between prediction and anticipation. Retailers move beyond static numbers and tap into real-time data, understanding the ebb and flow of customer movements. By embracing the patterns of time and space, they strategically position themselves to intercept the ever-changing currents of consumer traffic.
  • Accessibility: Accessibility encompasses more than physical proximity. Retailers now navigate a complex landscape of convenience and connectivity. They reimagine the concept of accessibility, exploring parking availability, public transportation integration, and the interplay of digital and physical realms. By seamlessly blending the virtual and brick-and-mortar experiences, they become beacons for modern consumers.
  • Cost: Many retailers struggle with achieving a delicate balance between investment and potential returns. It’s no longer a straightforward calculation. Visionary retailers consider the intangible assets and the value they bring to their chosen location. They weigh the cost of leasing or purchasing against the transformative power of their unique offerings, creating a new formula for success.

In this era of retail reinvention, the evaluation of retail locations transcends the mundane checklists of the past. It requires a fresh perspective that relies on a retail store location analysis, embracing collaboration, and tapping into the pulse of the community. 

Retail Location Data

Consumer Migration Trends to Keep an Eye On

Another essential piece of data retailers should consider are the latest consumer migration trends. Consumer migration trends in the context of retail locations refer to the patterns and movements of consumers in terms of their residential locations and preferences for shopping destinations. 

These trends can provide valuable insights into where consumers are moving, how their preferences are changing, and how retailers can adapt their strategies to align with these shifts.

Consumer migration trends can be influenced by a variety of factors, including changes in population demographics, economic conditions, urban development, and lifestyle preferences. 

For example, a neighborhood or city may experience an influx of young professionals, leading to a rise in demand for trendy boutiques and upscale dining options. On the other hand, suburban areas may witness an increase in family-oriented retail establishments as more people move to these areas for a quieter lifestyle.

In our hometown of Columbus, Ohio, community leaders and businesses are leaning into the concept of developing mixed-use spaces in the East Franklinton neighborhood, which is adjacent to downtown, and experiencing a rebirth into a trendy, more progressive area. This area is seeing more young professionals move in just as the business district is developing Gravity – a mixed-use space that caters to entrepreneurs, artists, and other social innovators. 

By analyzing consumer migration trends, which can evolve over time, retailers can identify emerging markets and potential growth opportunities. They can adjust their expansion plans, allocate resources effectively, and tailor their product offerings to meet the needs and preferences of the target consumer base in specific locations.

The Right Location for Long-Term Success

Whether you’re a retailer looking for the right location to jump-start or expand your business, you can significantly benefit from using data to inform the decision-making process. 

Yet knowing how to obtain this data and then use it to make an informed decision can be challenging. Retail location analytics technology platforms can offer a tailored approach to generating real estate data with the goal of empowering clients so they can make confident decisions. 

When choosing analytics technology platforms, look for qualities like:

  • A user-friendly interface that is designed to simplify the analysis and visualization of data
  • Modeling capabilities that leverage historical data and market trends to forecast the potential success of a retail location
  • Integration capabilities that allow seamless data integration from multiple sources, such as demographics, foot traffic, and competitor analysis
  • Advanced geospatial analysis tools that enable businesses to understand the spatial relationships between different retail locations, competitor proximity, and customer density
  • Real-time data updates and monitoring features that provide up-to-date insights into consumer behavior
  • Data security and privacy measures that ensure the protection of sensitive information
  • Customization options that allow businesses to tailor the platform to their specific needs or metrics

By leveraging advanced analytics and artificial intelligence, businesses can make strategic decisions that align with their target market, mitigate risks and capitalize on growth opportunities. 

To learn more about how a retail data platform can help businesses, check out ASGEdge.

Connected Wellness: Healthcare as a Retail Opportunity
Connected Wellness: Healthcare as a Retail Opportunity 1440 428 ASG

The pandemic impacted the healthcare industry much the way it did education and retail; it helped accelerate technology out of necessity. Not only did the wearable device industry grow, but our idea of what health care can look like has changed considerably too. 

Now, we log in to our computers to talk to our doctors rather than spending time in waiting rooms; we upload our own health stats from our wearable devices rather than having a nurse take our blood pressure and pulse. In a world now reliant on self-service connected wellness, the healthcare industry is ripe for evolution. Here’s a look at how retailers can take part in the health revolution and what is driving changes in the industry.

What’s Reshaping Healthcare?

An aging population – According to SeniorLiving.org, “From now until 2030, 10,000 Baby Boomers each day will hit retirement age. Millions will begin to officially retire, collect social security checks and go on Medicare. Other Boomers will keep on working either out of financial necessity or out of some less tangible need like identity and self-worth.”

Telehealth convenience – Due to the pandemic, technology has advanced rapidly in the healthcare space out of necessity. 

“While the surge in telehealth has been driven by the immediate goal to avoid exposure to COVID-19, with more than 70 percent of in-person visits cancelled, 76 percent of survey respondents indicated they were highly or moderately likely to use telehealth going forward, and 74 percent of telehealth users reported high satisfaction,” according to McKinsey’s 2020 Healthcare Report.

The wearable trend – It isn’t so much about the wearables as the data. Consumers have access to their own medical data more than ever, which allows them to be more proactive in caring for themselves.

“With 76% of adults age 50 and older indicating a desire to age in place, voice-activated tools, such as home assistants and home health-care technology (emergency or virtual care) are relevant potential purchases for them. If offered a choice, over half (53%) would prefer to have their health-care needs managed by a mix of medical professionals and health-care technology,” according to AARP.

Creating New Health and Wellness Experiences

Today’s retail consumers want personalization and convenience, and health and wellness retailers have an incredible opportunity to deliver high-quality, personalized, and convenient care to consumers. Doctors’ offices can learn how to create a patient experience that earns loyalty and satisfaction by looking to retailers’ offerings. 

Like retail, medical providers must customize the entire experience—patients want to have access to information, manage their own care, choose whether they come in to see the doctor or have an online appointment.

Think of patients as customers who want to have a consistent experience no matter how they choose to engage. If they chat online with a nurse, they expect the nurse to have the same information the doctor would if they were in the room with the patient’s medical file. But more than just consistency, patients are looking for ways to be more proactive in managing their own health.

Retail Health Clinics

Since the early ‘90s, when retail health clinics began opening, consumers have benefited from—and come to expect—the ability to seek non-emergency medical care outside of business hours. It’s clear that consumers want the same kind of convenience with their medical care that they receive in other areas of their lives. Healthcare providers who offer convenient, local care are not only popular among consumers but also are expected to see major growth. 

Self-Service Healthcare

As a multitude of wellness wearables, connected health devices and apps are developed, there could be space for an Apple Store-like offering for a health-care device shopping experience akin to the Genius Bar. 

Empowering consumers to manage and monitor their own health could eventually mean they can use a wearable to obtain information, like an EKG on the go. That could free physicians to focus on treating patients in need while simultaneously giving more people the power to be proactive about their own health.

Health Meta—Taking Telemedicine to the Next Level

Industry watchers’ speculation about potential partnerships between retail and medicine is exciting. Think about existing retailers like CVS and Walgreens, who already provide vaccines, fill prescriptions, and offer blood pressure screenings. What if they were able to extend those medical partnerships to create a one-stop telehealth shop? The future could see patients who meet with telehealth doctors in Walgreens or CVS for proactive screenings, upload their data from their wearable devices and do a little shopping while their prescriptions are filled. 

Incorporating Health and Wellness into Retail Design

Incorporating health and wellness into retail spaces can also enhance the consumer experience. Healthcare retailers can win customers by offering wellness products in-store and providing wellness experiences, such as massage chairs, meditation rooms, or spaces to host conversations on wellness topics.

“It’s not just about a breadth of product options, it’s about continuous wellness support for the consumer’s home, workplace, workouts and lifestyle. Create dedicated sections for healthy morning rituals (smoothie makers, lunch boxes, yoga mats), daytime products (working, running errands, exercising) and evening needs (sleep aids, organic cotton sheets, dream journals),” according to Medallion Retail.

As innovation drives the health and wellness revolution, design will take center stage. Design impacts the patient experience, drives patient retention, and enables health providers to empower patients to be more proactive about their health. 

The possibilities are endless.

Layered Construction: The Challenges in Retail Design
Layered Construction: The Challenges in Retail Design 1440 428 ASG

Opening a new store is essential, whether a brand is opening their first or their hundredth. A new store builds excitement, embodies the relationship between the brand and their customer, and showcases what’s new.  Those brands that choose design-driven concepts have the advantage to ensure a unique experience that also performs in the marketplace. So imagine the frustration and expense, both in capital and sales, that occurs when store openings become stalled at every turn. 

The World Has Changed.  

The variables that drive retail design have changed dramatically. And it’s not just labor shortages and supply chain issues; every step, from location decisions, lease negotiation, early concept design, through to how one structures the build team can now be a challenge and needs to be considered more thoughtfully as a whole than ever before. 

“The complexity of the system eats itself alive if one part fails,

explains Ed Hofmann, Partner of Design and Strategy at ASG-Chute Gerdeman. “We find ourselves navigating decisions that spread across multiple layers and choices – literally as an extension of the Brand’s in-house group.  For instance, the ability to move with real ‘speed’ is now contingent on the ability to navigate thru 10 – 12 decisions at once, supported by only partial information.  You don’t know everything you need to know, so we are more and more relying on instinct, strong back up plans, and our relationships to move at pace.

Vendors are wanting more up front, work is taking longer, so we are value-adding where we can, for instance, helping clients on the tenant negotiation side to suspend leases or postpone payments due to uncontrollable delays. We place a lot more emphasis on streamlining the work leading up to the construction so that the build can go as efficiently as possible, such as separating the interior and exterior builds if we must – it creates 2 permitting tracks, but it allows work to continuously move forward, rather than being totally stalled.”  

Clients Crave Control

Clients know what they want for their store designs, but they are frustrated, simply by the lack of control. Delays are increasing due to factors out of the control of both the agency and the client. These delays don’t just add to frustration but increase spending on construction and payroll. Delays in opening lead to lost revenues. 

Neither clients nor agencies can defeat the supply chain, but the situation is causing clients to lose confidence not only in the agencies with whom they work but with their own internal teams and their vendors as well. And vendors, who are either protecting themselves or simply unable to move quickly enough due to the supply chain, are driving up wait times and increasing costs.

“It used to be you got to choose 2: good, fast, or cheap….but now it includes a 4th variable: just getting it done, and you’re allowed only one mistake,” says Hofmann.

Layered Construction in Design

On the execution side, layered construction is becoming more common to help overcome the challenges of supply chain and labor issues. But these challenges aren’t just happening with the storefront. A retailer may not be able to get the correct fixtures or all of the fixtures they need, so a layered approach is being used to help keep the client moving toward opening. 

Clients may be able to have some of the fixtures installed and use alternates for the rest while they wait for the remaining fixtures. They’re making do with what they can get – literally buying things off the shelf, at second-hand stores, or recycled from other locations as placeholders until the real elements arrive. 

For example, if the space has been designed with certain color-themed rugs that you can’t get right away, they find something that works, place it in the store, open the store, and then replace it when the actual items arrive. And it’s not just rugs – it’s light fixtures, window glass, paint colors, display tables, shelving – it could be anything. Now imagine the scale of that when it is multiple locations or multiple elements. Just to get the store open, the design team might have had to get fixtures at West Elm, Arhaus® Outlet, Wal-Mart, or even Amazon, as the first layer and then later, come back and add in the desired elements. 

Managing the Customer’s Experience 

This obviously isn’t the optimal approach, because the design is part of the experience for customers walking into a newly-opened location. In order to manage this “layered” experience will require finesse and transparency. So how the retailer positions the design choices they make will influence how it is received by consumers. 

The key to a successful layered construction approach comes down to closely following the brand intent, that powerful story, with thoughtful, perhaps temporary substitutions, back up plans and complete transparency with the client and often the end consumer.  The relationship between Brand and the people that love them is paramount – it’s our job to protect that and find a way to go above and beyond, delivering unique and powerful connections, sales, and memorable experiences. 

An Era of Layered Construction
An Era of Layered Construction 1440 428 ASG

It’s tough to be a retailer trying to open new stores right now. Everyone is experiencing high costs, lack of materials, logistical issues, and labor issues. One of the hot topics at the ICSC convention this year was the idea of layered construction. Layered construction allows the retailer to open sooner, albeit not in the ideal state. Layered construction is the outcome of more than two years of pandemic-related supply chain and labor shortage issues that show no real signs of letting up any time soon, which have only been exacerbated by the war in Ukraine.

What Is Layered Construction?

Layered construction is an approach to launching a new location in the midst of all the construction industry challenges currently besetting the industry. It can take much too long for a brand to realize the ideal design for a new location due to shortages or wait times for materials, labor, and partner resources, so they sacrifice or alter the design to help facilitate progress towards opening. This can look like many things, but basically, it means implementing a new prototype in layers. For example, a store has a new, beautiful storefront design, but the design requires certain materials which are not accessible for 22 weeks, despite sourcing locally or looking for custom-made solutions. Waiting 22 weeks for the materials isn’t feasible when the store needs to be open for customers now, so the design is built in layers. Often, this means creating an alternative to the prototype that can be built immediately, then returning later to update with the correct materials when they’re finally available.

Drawbacks of Layered Construction

For retailers, the design of a location is a significant piece of the branding. By opening without having the design elements in place, they risk losing that all-important customer experience element that drives loyalty and return visits. However, this is the world everyone is living in right now. While it adds complexity to the construction and design build, it’s important to move forward, even though there may be a slower response to what should be a great store experience.

Even with these drawbacks, because labor and supply chain issues are having such a significant impact on construction schedules, retailers who want to open more quickly are using a layered construction approach to be able to open their doors to consumers even before the elements of their retail design are complete. It’s not a perfect solution, but when handled properly, it can be a way for retailers to more quickly.

Processed Have Changed

Processes have changed dramatically, and because most of these things are completely outside the control of the agency and the client, it becomes a matter of adjusting to the changes, communicating them effectively, and adjusting internal processes to accommodate the changes. For example, permit times have doubled in the last year.

“Speed is no one’s ally”

explains Liz Seitz, ASG’s Store Planning and Construction Leader. “What used to be a 6-8-week timeline, is now 20 weeks in some scenarios.” What agencies must do to help assuage the frustration for clients is to perform due diligence and organize everything prior to construction to make the process quicker and more efficient to execute.

Agencies must be vigilant, keeping their eye on the swiftly changing environment. “As soon as one lever opens up, another one, down the road we never expected, shuts,” says Seitz. Sometimes, Liz explains, it’s important pump the brakes earlier- talk to vendors and ensure construction schedule will align for everything to come along as scheduled.

“Companies will do anything to get into their space,” says Seitz. “They will literally rig their HVAC to make it into their space quicker.”

Globalization is Challenged

For years, the industry has relied on globalization as a solution that delivered cost-effective materials. Now, sourcing materials are part of the challenge. Could anyone have possibly predicted that just as we were coming out of the worst part of the global pandemic that a war would break out? Ukraine may be a small country, but it is pivotal politically and geographically for both food (Ukraine is a major wheat supplier) and oil (most of Europe imported oil from Russia and have stopped because of the invasion.

“None of us expected that after covid, another massive global crisis would emerge,” says Seitz.

Global struggles have a direct effect on US construction in some fashion, and all these factors make it more difficult to consider offshore manufacturing, at least in the short term. Complicating matters is that fewer and fewer people in America can actually put things together.

It’s the agency’s responsibility to have everything organized, to simplify the process and make the job simpler for vendors, contractors, and partners, but that’s far more difficult to do when everything is so much more unpredictable.

Supply Chain Woes

As with so many other industries, the construction industry has been plagued with supply chain issues. These issues are now compounded by a backlog of projects, a new infrastructure bill, and pent up demand for projects that were put on hold during the pandemic. These supply chain issues are impacting every phase of construction, and lead times are growing, exacerbated by the labor shortage in the trucking industry that moves the materials.

Labor Shortage

According to the Associated Builders and Contractors (ABC) organization, the construction industry needs 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor. In 2023, ABC says the industry will need to bring in nearly 590,000 new workers on top of normal hiring to meet industry demand. The labor shortage is compounded by a tattered supply chain. It’s not just that there are labor shortages in general. It’s that the labor shortages are hitting blue-collar jobs, so even when the store is finally able to get the materials, they may not be able to find enough people to do the work, whether it’s installing fixtures or painting, or specialized services like plumbing and electric.

Alternative Buildout Matters

One of the wonderful specters we see in retail over and over again is a willingness to be flexible, to switch gears, and to change directions in order to keep moving forward. It’s one of the most invigorating reasons to be in this industry. There are many creative and innovative options rising to the forefront to make it easier to complete construction as expected.

“Just as we’ve seen new store formats or logistics solutions in response to the pandemic, businesses are becoming more adaptable and flexible overall in response to a new normal. Those that are prepared to make the most of this will benefit in the long run if any other supply chain issues arise.” said Tom McGee, president and CEO of ICSC, in an interview with Costar.

Some of the alternatives being considered include:

3D Printing

3D printing is becoming an innovative way forward in retail design construction. There have been entire buildings manufactured from 3D printing, and it’s offering retailers who need to open sooner a way of moving forward without losing all the elements of their design. According to Construction Dive, 3D printing is more cost-effective and projects can be completed much more quickly.

Using Different Materials

Even though lumber prices are starting to fall, the overall cost of construction remains higher than expected. Many retailers are seeking out alternative materials to be able to complete their projects, whether for construction or for interior design elements.

Local Sourcing

There has been an increase in demand for materials manufactured in the U.S. in order to shorten the supply chain. While this may not be a permanent solution to the issue, in the short-term, it allows construction to move forward with both construction.

Prefab

Robins & Morton makes the argument for prefabrication to ease the supply chain issues, reduce costs, and overcome labor shortages: “Once dismissed by skeptics as a risky idea destined to diminish construction quality, prefabrication is now universally embraced as an industry best practice. Companies in all building sectors are investing in it, clients are intrigued by its savings potential, and the field staff is integrating it in ways that will forever change the traditional supply chain in construction.”

Using Existing Construction

Not only can it be cost-effective to use an existing building and transform it for your brand, but it can ensure you get the location you want. Demand for prime locations is growing rapidly but given the cost and delay in constructing an entire storefront, the investment in retrofitting an existing location can be worthwhile. It can even be inspiring.

At the end of the day, suggests Seitz, you have to set the tone early and understand the client’s priorities. Then use your experience to develop forward-thinking design that is flexible enough to withstand the current industry climate.

Type your search here
Skip to content