Retail 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?

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

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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)

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.

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.

Alpha-Powered Brands: Shaping the Future of Shopping
Alpha-Powered Brands: Shaping the Future of Shopping 1440 428 ASG

Wielding their purchasing power and influence on family shopping decisions, Generation Alpha is setting trends and raising expectations for brands. How are these young consumers driving exciting opportunities for retail brands?

Gen Alpha‘s considerable influence on retail brands and the future of shopping stems from their role in family shopping decisions. While they may not have their own income, their influence on their parents’ purchasing decisions is substantial. Generation Alpha is known to be confident and vocal about their preferences, often influencing the brands their parents choose to buy from. Retail brands that understand and cater to the desires and aspirations of this generation can gain their loyalty and win over their parents as well.

If marketers think Gen Z is the most lucrative consumer group today, then it’s time to think again. Generation Alpha (those born from the mid-early 2010s and still being born until the mid-2020s) is tipped to be the wealthiest, most educated and technologically connected demographic of them all.“ – The Drum

Generation Alpha’s emphasis on sustainability and social responsibility is influencing retail brands to adopt more eco-friendly practices. This generation is conscious of the environmental impact of their consumption and expects brands to prioritize sustainability. Retail brands that demonstrate their commitment to social and environmental causes can resonate with Generation Alpha and earn their loyalty.

Alpha-Powered Brands

Gen Alpha’s Spheres of Retail Influence

Generation Alpha is the first truly digital-native generation, born between 2010 and 2025. The oldest Gen Alphas are barely in their teens, but their influence is already being felt throughout food, fashion, and retail. Their distinct shopping habits—from their access to technology and mostly Millennial parents—set them apart from previous generations.

Growing up with not just smartphones and tablets, but also voice-activated assistants, AI, and social influence as a way of life, they have never known a world without technology. As a result, their expectations for the shopping experience are shaped by the convenience and instant gratification that technology provides. Generation Alpha expects seamless digital experiences, personalized recommendations, and fast delivery. They are quick to adapt to new technology and are comfortable using a variety of devices and platforms to make purchases.

Retail brands need to understand and cater to these preferences to effectively engage with this generation. Let’s look at some brands targeting each of the three distinct Alpha age groups: baby, tween, and teen Alphas.

Baby Alphas: Parent-Driven Influence

For baby Alphas, parents (often Millennials) are buying products that align with their values and concerns while introducing the little tikes to brands and products that may carry forward through several stages of development. These products often represent a form of nostalgia for the parent. They’re also looking for products that are non-toxic, reducing pfas (forever chemicals), biodegradable, plant-based, low sugar, and cross-functional.

Results from recent research indicate that companies spend over $16 billion annually on marketing to tap into young children’s $286 billion influence on adult spending, Simplicity Parenting by Kim John Payne. Payne’s book also highlighted findings that children as young as 2 can recognize brands on shelves and that they have recognition of 300-400 brands by age 10.

Alpha-Powered Brands

Brands to Note

Lalo – Lalo was founded by two dads and appeals to parents who want products that work as hard as they do. Lalo’s primary products include a multifunctional highchair, a table and chair play set, and a baby bathtub, along with a variety of accessories. All the products are manufactured using non-toxic EVA and FDA-approved BPA-free plastics.

Little Spoon – Little Spoon appeals to parents of baby and toddler Alphas by providing them with a new approach to food. Using clean, organic ingredients and age-appropriate balanced nutrition with vegan, gluten-free, dairy-free, and vegetarian options and the goal of creating health habits from the start.

Lovevery – Lovevery creates toys designed to maximize the neurological development of babies and toddlers. The founders wanted “to help parents by giving them the toys and educational information they needed to help foster babies’ development through play and experiences.” The subscription company ships toys (and flash cards with info about how to use the toys with baby) every two months. Then, once baby turns one, the boxes ship every three months with a selection of activities.

Tween Alphas: Kid Influence Gains Momentum

Instead of earmarking pages in a Sears catalog, these kids have their own Amazon Wishlists and a loud voice in determining where their parents shop, what they buy, and where they eat. They value experiences over products, omnichannel experiences and profiles, meta experiences, and customizable products. Legacy brands are working hard to connect with this group and their parents.

“The way most companies look at consumers is ‘well, who’s got disposable income?’ We don’t look at it that way. We look at who is setting the agenda. Who is the future?” – Nike’s CEO, John Donahoe, told Vogue Business.

Brands to Note:

BusyKid – BusyKid is an app designed to help kids learn to budget and understand the value of money early. Kids earn money from their parents by doing chores, or parents can help enterprising tweens launch their own business. The kids get a Visa Spend Card they can use anywhere Visa is accepted, and parents see every transaction made, so kids and teens can learn how to spend wisely.

ToyBox – ToyBox is “empowering the next generation of young and creative minds by making cool technologies easy to use.” Tapping into a generation used to creating their own content, ToyBox gives kids the chance put together their own toys on the site, which are then 3D printed and shipped to them.

Ziggy Zaza – Ziggy Zaza is an Australian-based fashion retailer that ships worldwide.  The sustainable and environmentally conscious brand is “inspired by art, adventure and the wild and wonderful imagination of our children.”

Teen Alphas: Collaborative Purchasing

Throughout history, teens have been an influential consumer group. Remember Beatlemania? When brands can tap into that teen spirit and connect authentically with their target market, they can win big. Just ask billionaire Kylie Jenner, whose cosmetics empire markets directly to the teen girl demographic on social media.

Teen Alphas are influencers who not only have their own spending money, but also collaborate with their parents in making retail decisions, with a larger-than-expected voice in collaborative purchasing and family shopping.

Brands to Note

Roblox – Roblox is a social gaming platform with more than 52 million users, most of whom are under the age of 17. The app lets users play and create games, chat with others online and earn and spend virtual money. The platform also hosts live events like in-game concerts.

Hanna Andersson – Hanna Andersson targets the Alpha generation from infant through age 14 by offering sustainable, organic clothing made for play, with a focus on social responsibility, diversity, and inclusion.

Johnny – Johnny footwear is a Kickstarter company that was successfully funded and features the world’s first shoe that rapidly biodegrades underground and grows into an apple tree.

Harnessing their unparalleled command of technology, these digital natives are orchestrating a transformation in retail, unlike any seen in previous generations. As the cohort continues to grow up, retailers have an opportunity not just to adapt, but to flourish.

Kids aren’t the only ones with buying power these days; the pet retail economy is booming. Read more: https://consultasg.com/the-pet-retail-economy/

A-List Joints: Exploring Celebrity Cannabis Retail
A-List Joints: Exploring Celebrity Cannabis Retail 1440 428 ASG

The best cannabis dispensaries are designed to be memorable spaces—both aesthetically pleasing and functional. And when they are owned by a celebrity, well, you expect to see their famous persona interjected into the space. With nearly half of Americans living in a legal cannabis state, marijuana has gone mainstream—and plenty of famous cannabis users are betting on the burgeoning industry with cannabis retail endeavors of their own, creating innovative retail spaces and experiences.

Elevating Cannabis Retail Experience

Every shopper, regardless of the product, wants to move seamlessly through the funnel while feeling both familiar with the process and intrigued by innovation. Shoppers want to be entertained, find what they are looking for, and ensure all their questions and concerns are addressed. Today’s consumers are sophisticated, and they will increasingly shop for an experience over a product. When you can purchase the same product from a variety of retailers, where are you going to spend your time and money? The retailer offering the experience that most aligns to your expectations and desires.

“Cannabis brands of all sizes, from multistate operators to mom-and-pop shops, have stepped up to the challenge of rising consumer expectations,” said Kathee Brewer, editorial director at trade journal mg Magazine. “Whether online or in-person, contemporary dispensaries are pushing the boundaries of the retail experience, opening new avenues for consumer exploration and washing away the negative connotations of the past. With experiential activities, futuristic design, whiz-bang technology, and more, the cannabis retail environment is forging ahead into a new era.”

The Woods

Last year a new kind of cannabis retailer, The Woods, opened with a dispensary and consumption lounge in West Hollywood, focusing on organic, sun-grown, California strains. There you can find everything from smoking apparatuses to flower and edibles all in a gorgeous space that feels like you’ve been transported out of busy LA into a tranquil oasis. The Ganja Giggle Garden offers state-of-the-art air filters, climate control, and luxurious views of the luscious gardens and koi pond. You can even rent a private cabana and chill in the consumption lounge.

Celeb Connection:

Cannabis legalization activist Woody Harrelson and political commentator Bill Maher are among the owners.

Houseplant

Harrelson is not the only celebrity who focuses on every detail. Actor, Comedian, and Filmmaker Seth Rogen, owner of Houseplant, hand picks and personally tests each cannabis strain his lifestyle brand sells online and through retail partners. He sells his hand-picked strains in pre-rolled artisan-crafted joints available at select California dispensaries. Houseplant offers ashtrays, lighters, and lifestyle products for sale online—including the “By Seth” line of products that “draw inspiration from original designs or items from Seth’s personal collection, while others embody his profound admiration for ashtrays.”

Celeb Connection:

Besties actor Seth Rogen and comedian and filmmaker Evan Goldberg.

Cookies

Cookies co-founder and rapper Berner “built the brand from humble beginnings in the Bay Area to a worldwide lifestyle brand.” Considered “America’s first legal weed empire,” the Cookies brand is thought to be worth at least $1 billion; the Cookies clothing line alone did over $50 million in sales in 2021. The brand is continuing its expansion path; between 2018 and 2022, Cookies grew from zero to 49 retail marijuana dispensaries. The company also added two flagship clothing stores, in San Francisco and Los Angeles. Its two-story Las Vegas retail flagship is being redesigned to emphasize experiential elements like a vortex entry, hologram booth, craps table, and rap station.

Celeb Connection:

Rapper and entrepreneur Berner’s brand boomed when friend rapper Wiz Khalifa began rapping about Cookies.

Josephine & Billie’s

The first dispensary by and for women of color, Josephine & Billie’s in south Los Angeles transports visitors to a speakeasy in the Harlem Renaissance. Named for the Jazz-era icons Josephine Baker and Billie Holiday who were once persecuted for their cannabis use, the vibe is cool and contemporary while harking back to the Harlem speakeasies and tea pads of the 1920s and 30s where Black thinkers, musicians, artists and activists would gather and discuss social issues over a joint and jazz. With events like Tea and Terpenes and regular board game nights and record release parties, the aim is to build community among women within the predominantly Black and brown neighborhood they serve. If you’re there, drop the not-so-secret passphrase, “Billie sent me,” for access to the backroom lounge filled with books about history and social justice.

Celeb Connection:

Josephine & Billie’s received The Parent Company’s first social equity corporate venture fund investment, which billionaire rapper/mogul Jay-Z oversees. The Parent Company houses 17 brands, including Jay-Z’s cannabis brand Monogram.

Planet13

You can’t talk about cannabis experiences without mentioning Planet 13. Co-CEO Larry Scheffler knows people visit Las Vegas for spectacle, so he created the world’s largest cannabis dispensary—an elaborate, jaw-dropping retail destination. Picture this: you walk through the doors and are greeted by vibrant psychedelic lights dancing across the walls, illuminating an expansive space that feels more like a futuristic theme park than a dispensary. Interactive elements include 15-foot tall giant interactive lotus flowers, an outdoor water feature with LED lights and fog, and a glowing aerial orb show high above the dispensary floor. Its Santa Ana dispensary features an 89-foor digital waterfall, a computerized interactive beach, and a 16-foot octopus sculpture. If you are headed to Vegas in 2024, visit Cannabition, a 12,000 square-foot “whimsical and visually breathtaking environment, tailor-made for cannabis enthusiasts seeking an awe-inspiring and Instagrammable experience.”

Celeb Connection:

Planet 13 Holdings is run by co-CEOs Bob Groesbeck and Larry Scheffler, both former politicians.

Dr. Greenthumb’s

With a handful of California locations and one coming soon to Michigan, Dr. Greenthumb’s have been open in California since the early years of recreational legalization. The vibe reflects their anti-establishment roots as a champion of legacy culture. Dr. Greenthumb’s may have retro vibes, but they are at the forefront when it comes to immersive, tech-driven retail experiences that help drive the brand story. For example, when you pick up a package in their stores, a screen activates and educates you about the strain and allows you to add it to your digital shopping cart. Focusing on omnichannel storytelling and high-touch service is an incredible differentiator, but in-store tech is only one way the brand is exploring innovative ways to show their connection to the culture.

Celeb Connection:

Cypress Hill frontman and 30-year cannabis advocate B-Real owns the dispensaries, as well as the cannabis brands Insane and Dr. Greenthumb.

Today the market is ripe for innovative new retail experiences and cannabis is greenfield for exploring how to use brand story, unique spaces, and star power to elevate retail. What can other retailers learn from these high-profile, celeb-connected cannabis experiences? Will they find inspiration in or motivation from the way cannabis brands are reimagining the in-store experience?

See how ASG helped Grassroots scale a cost-effective cannabis retail fleet >

The Micro-Experience Experience
The Micro-Experience Experience 1440 428 ASG

“Micro-experiences are the next big thing in customer engagement,” proclaims an article on the US Chamber website. That’s a bold statement, considering more robust customer engagement is something that every retailer on the planet is after. How can micro experiences through retail brand collaborations bring customers back for more?

By micro experience, we’re talking about a small-scale, physical activation that brings a branded experience to multiple locations, generating revenue and excitement. It goes beyond the flagship store, reaching every consumer and creating a memorable, intimate interaction with the brand. It offers a novel and immersive experience for those willing to engage on a deeper level.

Micro Experience, Massive Impact

Micro-experiences, unfortunately, took a hit during the pandemic, but their potential impact cannot be overlooked. In 2019, American Girl Doll and L’Occitane exemplified this trend by introducing a joint experience that fostered personal connections with customers.

However, today’s micro experiences go beyond product interactions. They involve creative collaborations like Capital One transforming bank lobbies into cozy cafes in partnership with Peet’s Coffee, or the immersive “cold room” at Canada Goose, where customers can try on parkas. It could even be a local liquor store teaming up with a nearby winery for Friday night tastings. The goal is to deliver a distinctive and lasting impression that enhances brand awareness and loyalty, offering an intimate and exclusive encounter with the brand and its partners.

Answering the Call of Consumers

These integrated, often hands-on experiences can have a significant impact. In fact, more than 20% of consumers told Raydient that they would shop more if retailers offered unique experiences, and a staggering 68.9% of consumers emphasized the importance of a positive in-store experience.

“Brands should invest heavily in ways to recognize and leverage these moments, finding the right time to send a personalized offer that will help solve whatever problem is facing the potential customer at that time. This is about being able to reach the right customer at the right time — a cutting-edge marketing challenge but one that’s increasingly solvable thanks to the technology solutions available today.” KPMG

Integrating Micro Experiences

As retailers consider how to deliver micro experiences to their customers, it’s crucial to think about how the experience can be authentic to the brand. It makes sense that a company that sells parkas would have an ice room. Here are some ways retailers can integrate micro experiences into their stores:

  • Thoughtful Store Layout – Design stores with designated spaces for micro experiences. Areas can be dedicated to interactive displays, product demonstrations, or immersive installations that engage customers and create a memory.
  • Interactive Displays – Incorporate interactive displays that allow customers to touch, feel, and interact with products. This hands-on approach enhances customer engagement and encourages exploration.
  • Personalized Service – While many of these experiences can be unattended, it’s essential that staff are trained to provide personalized and attentive service to customers during those experiences. This tailored approach adds an extra layer of memorability by making customers feel valued and attended to.
  • Sensory Elements – Incorporate multi-sensory elements into the store environment, including ambient music, appealing scents, or visually captivating displays that immerse customers in a brand’s ethos.
  • Pop-Up Events – Create temporary pop-up installations or events in-store that offer unique and limited-time experiences. Think workshops, demonstrations, and unique collaborations that excite consumers and drive foot traffic.

Some retailers are at the forefront of the micro experience. Let’s take a closer look at who is getting it right.

Personalization and Customization
Customers want to feel like their shopping experience is not the same as every other customer, that it’s uniquely designed for them. With technology and consumer data at the fingertips of most retailers, it’s easier to create micro experiences that play on that desire to be catered to.

Who is getting it right? Look to Sephora, a brand that consistently garners high levels of loyalty by offering exclusive in-store events and makeovers.

Augmented Reality and Virtual Reality
The use of augmented reality (AR) and virtual reality (VR) can allow customers to experience products in a more immersive way.

Who is getting it right? Check out Burberry, who used a pop-up AR experience in Harrods to coincide with the launch of its new Olympia bag.

Learning and Doing
One of the most popular micro experiences involves hands-on learning in unexpected places, like cooking classes in a grocery store or a painting session in a liquor store.

Who is getting it right? Whole Foods invites guest chefs to specific retail locations to conduct cooking classes with shoppers.

“Micro-experiences really are going to become table stakes for retailers, particularly when today’s consumers have so many choices.” – Sarah Hoffman, chief marketing officer at Drybar.

Micro experiences are physical experiences that are meaningful and engaging. When done right, they encourage a deeper connection with the brand and provide something unique and memorable to the customer.

Emerging Market Trends in Retail
Emerging Market Trends in Retail 1440 428 ASG

“Location, location, location” may be a cliché, but “what is the ideal location for my brand?” is the burning question behind every retail strategy. The “right” location is not always where you think it is. Opening a retail location in the right spot can increase foot traffic, boost sales, and give the brand the exposure it needs. Conversely, a poor location can slow sales and even result in bankruptcy.

Where is retail happening right now and why? What markets are thriving? In this emerging market report, we’ll look at how some retailers are making a big splash outside the typical retail hot spots and why it might be beneficial to consider opening a retail location in these areas.

“Consumers want and crave variety, diversity, and choice. 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,” says Carrie Barclay, president and CEO of ASG.

Data, Data, and More Data

Data analytics is crucial to understanding retail location strategy. The most critical factor in choosing a retail location is understanding your target consumer. Insight into consumer behavior is essential. And that’s the rub, because consumers have dramatically changed their behavior post-pandemic. Anything retailers knew about their shopper from before the pandemic no longer is relevant.

Finding the right location in this shifting landscape requires access and understanding, says Doug Tilson, head of tenant representation for ASG. “It’s critical to understand how markets develop and how they’re changing. That can only happen when you have access to up-to-date, comprehensive data,” he says. “Using accurate data to drive decision-making and working with a trusted tenant rep partner can help you determine what’s possible in a retail real estate landscape that is constantly evolving.”

The Big Location Shift

Consumers are shopping closer to home, and they are seeking unique and memorable experiences when shopping in person. These factors are shifting location strategies for retailers, leading to store openings outside of the typical launch areas.

“While virtual and digital experiences still matter, the in-store experience is returning to prominence, and 94% of retailers are focused on enhancing it for their business overall.” –SquareUp

New location opportunities can lead to different format opportunities. Because consumers are sticking closer to home to shop, retailers—both big brands and a resurgence of mom-and-pop retailers—are opening smaller stores that allow them to fit more locations into neighborhoods and suburbs. Some retailers are even opening strategic locations on college campuses.

“Consumers want and crave variety, diversity, and choice. 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,” says Carrie Barclay, president and CEO of ASG.

Meeting customers where they are and where they want to be is part of a smart retail strategy. And that means an opportunity for retailers—both big brands and mom-and-pop retailers—who can’t afford big-city lease prices and large-format shopping environments.

“Retailers can tailor these small-format stores to target a specific demographic, create a personalized shopping experience, or experiment with a new brand direction. Small-format stores can also serve as fulfillment centers for click-and-pay shopping and as a location for returns, all while fostering brand awareness and customer engagement. And thanks to their smaller size, these stores can help companies expand their reach in urban centers and other highly-priced real estate markets while lowering overhead costs.” – Placer.ai

Using data to determine where and how retailers can best position themselves to attract consumers is essential to future success in today’s retail industry.

“Right-sizing helps in the long run: less labor, less inventory (“showroom” stores), less build-out costs, less energy spend, better online fulfillment and return options, as well as the big one since 2020—better accessibility.” – RetailWire

“For the first time in a long time, retail growth is outside of the top 20 cities. You’re looking at tier two or tier three cities, which suggests that the redistribution post-Covid is shifting. We know that it will shift again as people move past the Covid experience.”

-Carrie Barclay, CEO ASG

Emerging Markets

According to PWC, almost all of this year’s survey of top-ranked real estate markets are in faster-growing southern and western regions and away from the coasts.

• Nashville was once again the top-rated metro area
• The Dallas/Fort Worth area jumped five spots from a year ago to become the number two-ranked market
• The Atlanta metro area scored higher in this year’s survey, jumping to the number three-ranked spot from number eight last year

In addition to Nashville, Dallas-Fort Worth, and Atlanta, ASG is seeing opportunity in Seattle,
Austin, Charlotte, and Louisville.

3 Reasons to Consider Retail Development in Nashville

1. Nashville has been focused on economic development coming out of the pandemic and offers a variety of opportunities in mixed-use spaces that are reasonably priced compared to larger cities.
2. Nashville is an international tourist destination, bringing in people from around the world every year.
3. The city is investing in infrastructure, including public transportation, to support the growth.

For more, see these seven reasons why retailers should consider Nashville.

Nashville shops offer something for everyone: records by local musicians, rare musical instruments, vintage items, artisanal sweets and drinks, and items crafted by local makers and fashion designers. Music City is home to several shopping districts including 12South, East Nashville, Hillsboro Village, Green Hills, and Downtown.

The Nashville region is defined by a diverse economy, a low cost of living and doing business, a creative culture, and a well-educated population. Nashville’s growth is spurring a wide variety of new businesses, making it attractive for retailers. Nashville is a strategic location for retailers, but as more brands discover the opportunity, prices will rise. Retailers whose consumers will respond to a Nashville location should be planning now.

3 Reasons to Consider Retail Development in Dallas-Fort Worth

1. Dallas/Fort Worth is experiencing significant population, attracting people to the area with promising job opportunities and affordable housing in comparison to other areas of the country.
2. DFW and Texas in general have business-friendly tax policies, including dedicated support for small business owners, incentives to locate or launch businesses in the area, and has a 0% local tax rate as well as low property tax rates.
3. The region has made substantial investments in infrastructure development, including transportation, commercial real estate, and retail spaces.

According to the Q1 2023 Dallas-Fort Worth Retail Report, the Dallas-Fort Worth retail market continues to exhibit robust growth “characterized by robust leasing activity, sustained tenant demand, and redevelopment initiatives.” These conditions make the DFW area favorable for retail growth. Areas to watch in Dallas-Fort Worth include Lakeside and development near the Deep Ellum Rail Station at Swiss Avenue and Good-Latimer Expressway.

3 Reasons to Consider Retail Development in Atlanta

1. Like DFW, Atlanta is experiencing a rapid population growth, offering retailers a large consumer base supported by a strong economy with multiple industries including finance, tech, and logistics.
2. Atlanta is the home base of several Fortune 500s and is also a cultural and entertainment hub, providing a rich and diverse local and visiting customer base for retailers to attract.
3. Atlanta has invested in significant real estate development, including the construction of new shopping centers, mixed-use developments, and revitalized neighborhoods, including Centennial Yards and Medley.

“With the growth of jobs in the city, Atlanta and its 21-county surrounding region has seen a population boom, with more growth on the way. As of April 2023, the surrounding metro has an estimated population of 6.1 million people, and the Atlanta Regional Commission expects this number to grow to 8.6 million by 2050. The current annual household income growth is also outpacing the U.S. average, as well. This extra income growth is to the benefit of retailers.” –REBusiness Online

3 Reasons to Consider Retail Development in Seattle

1. Seattle is consistently rated among the top 10 cities to live in the United States. It boasts an above average median income for its residents with companies like Amazon.com, Boeing Commercial Airplanes, Microsoft Corporation, Starbucks Coffee Company, Costco, Weyerhaeuser, Nordstrom, REI, Alaska Airlines, and The Bill & Melinda Gates Foundation. In the 2022 America’s Best Cities report, Seattle ranked #12, and household income was found to be the sixth highest nationally.
2. Seattle’s transportation infrastructure is impressive. The city has two airports, bus, light rail, and ferries providing extensive public transportation offerings.
3. Seattle start-ups accumulated over $3.2 billion in venture capital in 2020 and have a roster of 25 start-up accelerators and incubators.

While Seattle has seen a slight downturn from the tech industry decline, the city still offers an enormous opportunity for retail, especially for retailers seeking to add small stores in some of the exceptional neighborhood’s Seattle features. In 2022, Nike opened an 8,800-square-foot space in Seattle’s eastside Bellevue neighborhood. Bloomingdale’s is making its entry into Seattle retail with their new small format stores in 2023.

3 Reasons to Consider Retail Development in Austin

1. Austin is one of the fastest-growing regions in the country, attracting high-end talent to the area that makes it ideal for growing retail brands.
2. The Opportunity Austin initiative has helped to create 637,400 jobs that contribute to a diverse economy where talent is abundant.
3. Austin was named the No. 2 best-performing city by the Milken Institute in economic growth and access to opportunities, crediting its strength to its high-tech sector driving rapid job and wage growth.

Retail opportunities abound in Austin. In 2023, the seven-building East Riverside Gateway complex mixed-use development was announced and will provide two million sf of office, retail, and residential space that will emphasize the pedestrian experience. The Domain complex, opened in 2023, includes 20 full-service and fast-casual dining options, 100+ retail stores and around 5,000 residential units in the area.

3 Reasons to Consider Retail Development in Charlotte

1. One of the biggest advantages for retailers in Charlotte is the low taxes. It was named a “Top 10 State for Best Business Tax Climate” by U.S. News and World Report in 2020.
2. Charlotte was named one of the best places to live in the U.S. in 2023-2024 by U.S News & World Report.
3. North Carolina is ranked No. 1 in America’s top states for business with the nation’s strongest economy.

Charlotte has many development and retail opportunities. In 2023, developers announced plans to turn the Mallard Pointe Shopping Center on North Tryon Street into a student gathering place with businesses tailored to the University of North Carolina Charlotte. Food and fitness retail are the fastest growth areas, and while vacancies are nearing record lows, new mixed-use development opportunities continue to evolve.

3 Reasons to Consider Retail Development in Louisville

1. Louisville has worked to increase infrastructure, including adding direct flights to LA and Boston as well as 35 other cities.
2. Louisville attracts talent in a variety of industries, including healthcare, high-tech, and manufacturing, building a population of higher-than-average income workers who are ready to shop.
3. Louisville was named a Top 5 U.S. Metro for economic development by Site Selection Magazine.

The opportunities in Louisville are limitless, with both downtown and the suburbs seeing a huge spurt of new development. Oxmoor Center has become a tourist attraction with retailers vying for the location. Nike recently opened a store there. Shelby Park is also seeing a rise in development, and Wawa recently announced plans to open in the east end.

Location as Retail Strategy

Meeting customers where they are and where they want to be is smart retail strategy. And that means opportunity for retailers—both big brands and mom and pop retailers—who can’t afford big-city lease prices and large-format shopping environments. These emerging markets represent some of the hottest areas in the country for retailers, whether a brand is launching a flagship store or wants to engage customers close to home with a small footprint neighborhood shop.

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