Retail

Redefining Bucket List Travel
Redefining Bucket List Travel 1440 428 ASG

From the bustling streets of Tokyo to the serene beaches of Bali, travelers are seeking out experiences that elevate their senses and ignite their curiosity. Travel is no longer just a journey; it’s an opportunity to explore one’s inner self, connect with the world, and make unforgettable memories along the way.

As the world becomes more connected, the urge to explore and discover new horizons has become an inherent part of the human experience. Interest in seeing new places has evolved to an artful pursuit of self-discovery and inspiration. With a world of possibilities at their fingertips, travelers are increasingly seeking out authentic and unique experiences that align with their passions and help them create cherished memories that will last a lifetime. For many, it’s become less about just getting away and more about bucket list travel experiences every time they leave their city.

Our team recently conducted extensive research on the state of travel today and how we expect it to impact the retail industry. Let’s dive into some of the themes we spotted, along with some opportunities for retailers.

bucket list

Taking The Scenic Route

Opportunity for Retailers: Cater to the road trip crowd. Whether it’s road food, designer car organizers, or tech to improve the ride for drivers and passengers, opportunities to make the journey more pleasant abound.

The COVID-19 pandemic has changed the way we travel, with many people opting for road trips over air travel due to safety concerns and travel restrictions. As restrictions eased, travel came back with a vengeance in 2022, but that didn’t mean travelers solely returned to the air. In fact, a 2022 survey from The Vacationer found that nearly 80% of U.S. adults planned to take a road trip that summer. “Travel was closed due to COVID, and people don’t want to forfeit those experiences now,” said Mindi Trank, VP Strategy, Chute Gerdeman and ASG.

Even with the pandemic emergency behind us, there has been a growing number of travelers choosing to hit the road and take the scenic route, rather than flying, to their destination. Driving vacations offer a level of flexibility and freedom that air travel simply can’t match. With a car, travelers can stop whenever and wherever they want, take detours to explore off-the-beaten-path destinations, and truly immerse themselves in the landscapes and cultures they are passing through. Plus, there’s something about the open road that just feels liberating and adventurous.

“Travelers are driven by the idea of controlling their time and where they are going,” Trank said. “With auto travel, travelers have control over where they are going, and the stops along the journey have become more important than ever. People are making more opportunities for something special to happen.”

From cruising along coastal highways to winding through mountain passes, the scenery and terrain of a road trip can be just as exciting and awe-inspiring as the destination itself.

With the rise of electric and hybrid vehicles, road trips are becoming more sustainable and eco-friendly than ever before. With electric car charging stations popping up along major highways and eco-friendly accommodations catering to road-trippers, driving vacations are increasingly seen as a responsible and low-impact way to explore the world.

Checking off the Bucket List, One Trip at a Time

Opportunity for Retailers: Create opportunities for “meaningful” travel experiences and target the younger generations who want to make memories.

A Stanford Medicine research project asked participants to share what is on their bucket lists, a list of experiences, accomplishments, or goals that a person wants to achieve or fulfill before they die (also referred to as “kicking the bucket”). The top response? The desire to travel, with nearly 79% of participants stating they hoped to explore new places.

At root for many of these bucket list travels the quest for meaningful experiences. A poll conducted by Bucket List Travels, a travel inspiration website, found that participants fear the greatest regret at the end of their lives will be that they didn’t explore enough of the world.

More than half of those polled said they wanted to see at least five additional countries and are currently working on checking off their travel bucket list. These numbers were particularly high among single travelers and those in younger age groups who want to make memories, according to the survey.

“People are looking at their lives and deciding how they want to focus, and then they find where that could lead them,” Trank says.

bucket list

Exploring Before Natural Wonders are Gone

Opportunity for Retailers:  The eco-tourism bus has already left the station. But if you are not yet in the business, unfortunately for the planet, new opportunities for helping consumers explore endangered natural wonders are certain to continue to arise.

As concerns about climate change and other environmental issues continue to mount, more and more people are starting to travel to see places or things that may not be there down the road.

From melting glaciers and disappearing coral reefs to endangered animal species and landscapes threatened by rising sea levels, there are a growing number of natural wonders that are at risk of being lost forever.

The World Wildlife Fund (WWF) has found that some of the most iconic tourist destinations, including the Amazon rainforest, the Great Barrier Reef and the Galapagos Islands, are at high risk of being severely impacted by climate change in the coming decades.

This has led many travelers to prioritize destinations and experiences that may not be available when they finally get around to scheduling a trip.

“Climate tourism is starting to explode. It stems from that feeling that maybe I want to see the Great Salt Lake before it’s gone,” Trank said. “Along with travelers checking things off their bucket lists, we are getting a sense with COVID that we may not have all the time in the world. It brought to the forefront for us that every vacation has to count.”

While many travelers are seeking opportunities to explore these threatened landscapes, they are also learning about ways to help protect them.

“Even with small trips, more are carefully considering where they are going and becoming more conscious about the footprint they are leaving behind,” Trank said.

In fact, according to Booking.com’s 2022 Sustainable Travel report, nearly 66% of travelers want to have experiences that reflect local culture, 59% want to leave the places they visit better than when they first arrived, and nearly 50% said climate change news is influencing them to make more sustainable travel decisions.

These decisions may include choosing to stay in eco-lodges and supporting locally-owned businesses to using public transportation and reducing plastic waste. This shift toward sustainable tourism is not only good for the environment, but it can also benefit local communities and provide travelers with a more authentic and immersive experience.

Sit Back and Relax with Hassle-Free Organized Travel

Opportunities for Retailers: Savvy retailers will partner with organized travel companies to provide products for wellness, travel or leisure.

With the rise of organized travel, planning a dream getaway has never been more convenient or stress-free. In recent years, organized travel has become increasingly popular among vacationers seeking a hassle-free and enjoyable trip–even before the travel begins.

Theme-based tours, travel companies, and other forms of organized travel have made it easier than ever to plan and book a memorable vacation by taking care of all the details–from transportation and accommodations to activities and dining.

REI is one of several companies that has jumped into the travel planning business with its co-op adventure travel program that allows outdoor enthusiasts to explore some of the world’s most stunning landscapes. As a cooperative, REI is owned by its members, who are also its customers. This unique business model allows REI to offer travel options like hiking and backpacking trips, all led by experienced and knowledgeable guides.

“This is a retailer that has really jumped in with both feet,” Trank said. “They offer trips in so many ways. For example, REI may help a single traveler plan a hiking trip by recommending the right gear and offering a Saturday hiking training class to get in shape for the trip. On the trip, she can carry her daypack and REI sets up the rest. There are also other classes where people can plan them with their spouses or friends.”

Another popular immersion travel trip that is planned for the traveler and goes beyond traditional sightseeing is culinary tourism. One person’s trip may include sampling local foods, learning about traditional cooking techniques and taking pre-arranged cooking classes. Other types of trips where every detail is well thought-out before departure are wildlife safaris and wellness get-aways.

Bucket List Travel

Going Back in Time with Heritage Travel

Opportunities for Retailers: By catering to this very personal niche, retailers can earn brand loyalty. Products that help document the journey, both physically and emotionally, will see demand. Personalized services in this area will continue to expand.

In recent years, there has been a significant resurgence of interest in heritage and culture among travelers. With the rise of DNA websites like 23andMe, more and more people are gaining insights into their ancestry and feeling a deeper connection to their roots. As a result, many travelers are now seeking out destinations that have personal significance to them and exploring their heritage in a more meaningful way.

A Global Wellness Institute study found that by this past year, heritage travel, which includes cultural and ancestral tourism, was expected to grow to $919 billion.

One way that travelers are engaging with their heritage is by visiting the places where their ancestors are from. Whether it’s tracing their family tree in Europe, exploring the villages of their forebears in Africa, or connecting with their Native American heritage in the Americas, travelers are seeking out experiences that help them better understand their cultural and historical roots.

By learning more about their heritage and culture, travelers are able to gain a deeper appreciation for their own identity and a greater understanding of the world around them.

Armchair Travel: Seeing the World without Leaving Your Home

Opportunities for Retailers: Not everyone is able to travel to the Eiffel Tower or the Great Wall of China. Find ways to bring the travel experience to consumers at home or closer to home.

While group tours are still popular among the aging population, the business model has changed to include what’s known as “armchair travel,” a term used to describe the experience of exploring the world without ever leaving the comfort of your home.

Armchair travel can take many forms, from reading travel books and watching travel documentaries to playing virtual reality games or taking virtual tours of famous landmarks and attractions.

“Older adults are staying closer to home, taking online classes and learning about new places,” Trank said. “Travel companies have shifted their models, making it easier to pay $300 for an online class that gives you the sense of going everywhere.”

This is one of the biggest advantages of armchair travel; it allows you to explore places that may be difficult or even impossible to visit in person. For example, you can visit the Pyramids of Giza in Egypt, the Great Wall of China or the Taj Mahal in India without ever leaving your living room. You can also explore the remote wilderness of Antarctica, the depths of the Amazon rainforest, or the vast expanses of the Sahara Desert without having to worry about safety or logistical challenges.

The State of Travel

Travel has had a major moment since COVID restrictions have lifted and people are ready to mingle and see the world. Having lived through a global pandemic, many Americans have a renewed desire to understand and explore new places and cultures. While our attitudes and priorities when it comes to travel has shifted, retailers have a massive opportunity to reach new audiences by finding where they could add value to travelers’ experiences.

Future Pharmacy

Future of Pharmacy: The Why & How of the Next Evolution
Future of Pharmacy: The Why & How of the Next Evolution 1440 428 ASG

It’s time to rethink the traditional pharmacy, from its purpose to its experience.

This wouldn’t be the first evolution. You would be hard-pressed to find a pharmacy with a soda fountain today like you could in the ’50s, and just a few short years ago, leading pharmacy brands like CVS decided it was finally time to stop selling tobacco. Why? Because the meaning of health has evolved and continues to evolve, it’s time for the pharmacy to change again along with it. The future of pharmacy is fueled by a set of needs, some new, some that have been slowly burning in the minds of consumers and healthcare professionals, but all important.

The timing couldn’t be more appropriate, as many pharmacies struggle with declining reimbursements, poor medication adherence, increasing online competition, and demands from health-conscious individuals looking to do more than treat symptoms.

A more complex definition of health means that for pharmacies to be the face of neighborhood healthcare, they’ll need to reimagine their role and the experience they provide.

Mental Health Crisis: A Second Pandemic

The Covid-19 pandemic changed lives dramatically. Health issues, economic hardships, fear, and stress ensued, and it quickly became obvious that the virus wasn’t the only health concern many were grappling with as they navigated uncertain times.

Mental health professionals began posing the possibility that a second pandemic was underway—one that would expose the lack of resources available for people struggling with their mental health.

In 2021, CVS Health launched in-store counseling, which opened in locations where consumers were unable to access and afford private therapy. Resembling traditional doctor’s offices, therapists’ private offices are located inside CVS Minute Clinics, providing reassurance that patients are receiving high-quality care.

Other pharmacies like Rite Aid and Walmart began offering affordable mental health support options as well, including counseling services with licensed behavioral health clinicians to help patients cope with anxiety, stress, and depression.

Nearly 90% of all U.S. residents live within 5 miles of a pharmacy, according to the Journal of the American Pharmacists Association. By offering critical mental health services, more pharmacies can close significant gaps in care left in the pandemic’s wake.

Consumers Want a Holistic Experience

The wellness economy is worth nearly $450 billion in the United States alone and is growing more than 5% each year. At the same time, the U.S. pharmacy market is projected to grow to more than $861 billion by 2028. There are remarkable opportunities for pharmacies to expand their services as more shoppers are seeking holistic experiences that offer well-being strategies.

According to global mall group Westfield, 78% of shoppers want in-store health experiences. That’s up 20% from 2019. Rather than simply a place to fill prescriptions, evolving pharmacies need to create clinics that offer holistic services within their retail locations.

Walk into The Organic Pharmacy’s sleek U.K. store, and you’ll find a concept that embodies some of the latest trends in holistic wellness, from skincare to bioenergetic scans. Enter one of the retailer’s consultation pods to learn more about how these three-minute scans can detect health conditions like infections, vitamin deficiencies, hormone imbalances, or food intolerances—then shop for your specific needs.

Pharmacy As a Nutritional Space

Pharmacies are a highly competitive business. Surviving generation after generation has meant evolving to meet customers’ needs and refocusing their brands to better reflect what customers want.

Today, it’s still common to walk into nearly any pharmacy and see aisles upon aisles of candy, salty snacks, and sugary drinks. Yet future pharmacies will no longer claim to be focused on health while creating an environment that encourages unhealthy choices. By taking it a step further and offering consultations on vitamins and wellness products, pharmacies can be the new one-stop shop for wellness.

Coastal Pharmacy & Wellness, an independent pharmacy in Portland, Maine, does much more than fill prescriptions—it stocks nutritional products from more than 150 vendors. Five wellness specialists research and select vitamins and supplements for customers, many of whom only visit the pharmacy destination for its wellness expertise.

Modern consumers are paying more attention to their diets than ever. Nielsen reports that 60% of Americans use diet to manage their chronic health conditions. With an estimated 133 million Americans suffering from at least one chronic illness, there is value in bringing nutritional intelligence into the pharmacy.

Several major pharmacy brands like CVS have recalibrated their food focus by expanding their healthy food and snack options. Yet still, only 25% of checkout space at the national retailer is now occupied by healthy items rather than sweets. Is it enough that you can now access healthy whole foods at some local convenient stores?

At Belgian pharmacy Van Dijck, customers can enjoy a refreshment station that offers fresh fruit-infused water, while Harpell Pharmacies in New York City offer cold-pressed juices that arrive at customers’ doorsteps for at-home cleanses.

An Aesthetic Facelift: From Cold to Inviting

It’s a classic look: Draining fluorescent lights, white epoxy floors, rows of products, and a fixed pharmacy window often in the back (so you must walk through rows of products to reach your destination). It’s the typical not-so-appealing look of today’s pharmacies, and it quite honestly feels like the place to be sick, not the place to get and stay healthy.

Yet some fresh-on-the-scene brands see brick-and-mortar as a blank slate—an opportunity to create a calm and relaxing setting that considers omnichannel retail. A 1,900-square-foot space in Brooklyn is one of the latest examples of pharmacies challenging the usual uninviting aesthetic. U.S. prescription app Medly opened its first brick-and-mortar store with the goal of enticing customers to a relaxing setting where calm aqua-blue interiors and minimalist display shelving set an inviting tone.

A pharmacy’s appearance matters more than many think. A study published by the Royal Society of Public Health in England found that the “architecture of pharmacies,” or how pharmacy spaces are designed, can impact how users participate in community-based pharmacy health services.

The study concluded that for pharmacies to optimize how pharmacy health services are delivered and experienced, spaces should be engaging and inclusive.

Those findings aren’t necessarily unique to pharmacies versus other healthcare settings. Researchers who have examined the impact of salutogenic architecture, or how an environment supports the healing process, have found that space design can improve health outcomes. For example, one study found that lighting, sounds, and the comfort of seating areas can all impact a patient’s mental well-being.

A pharmacy’s environment reflects the type of relationship it hopes to foster with patients. The appearance reinforces a consistent state of mind that a pharmacy is projecting, which then fosters brand loyalty. A customer’s experience will almost always answer the question: Which pharmacy are you more likely to go back to time and time again?

Pharmacy Digital Transformation

While more patients have embraced online pharmacies (there are currently more than 30,000 active online pharmacies), brick-and-mortar shops have also benefited by embracing digital tools.

A research study found that the number of online pharmacy users is expected to reach 1 billion across the globe by 2027. While experts point to the pandemic as the leading cause for the growth of e-pharmacies, the pandemic also showed the need for brick-and-mortar locations to improve services.

Many have turned to digital tools to help them reach more customers and improve workplace efficiencies. By leveraging new technologies, pharmacies have incorporated solutions like online shopping and delivery, secure messaging, e-commerce storefronts, and remote consultations.

Especially among the elderly population, remote consultations offer a viable option for those who have mobility issues. They can be an important tool for healthcare systems as a whole as well. In Minnesota, Fairview Health Services offers 24-hour remote pharmacy services to hospital pharmacy programs. When on-staff hospital pharmacists go home, Fairview Health Services steps in and offers patients, physicians, and nurses access to a pharmacist.

The program benefits all parties involved. Pharmacies can develop long-lasting relationships with healthcare systems. Hospitals can save costs on pharmacy staffing and reduce preventable medication errors. Patients can receive timely care and a better patient experience.

Digital transformations have also allowed pharmacists to connect with more patients. That’s important, considering pharmacists are often the first point of contact for patients. The National Institutes of Health reports that pharmacists see patients an average of up to 10 times more per year than they see their primary care physicians.

One digital tool that has become popular in underserved communities is telepharmacy. Telepharmacies operate like traditional pharmacies, except that a pharmacist reviews prescriptions and counsels patients from a remote location using cloud-based software. This technology has allowed pharmacists to expand their reach while providing high-quality healthcare.

While a digital boom has transformed the pharmacy industry by opening the door to more accessible care, brick-and-mortar pharmacies have continued to serve as the front door to care. It’s likely that we see both thrive and coexist.

Changing the Rules and Building Healthier Lives

“If you can’t win the game, change the rules.”

As the pharmacy industry continues to evolve and faces new challenges, both small, independent apothecaries and large pharmacy brands must buy into and support a larger view of health and position themselves as experts on health-related matters, as well as customer service.

Building patient loyalty isn’t about solely creating a place where customers go to pick up their medications. It’s about making a commitment and building relationships to help patients lead healthier lives.

The Hidden Cost of Returns
The Hidden Cost of Returns 1440 428 ASG

We have all done it. Find the perfect item, order a size up or down, maybe a different color, and keep the one we want…right?  Well, we’re paying for it.  

From clothing to cameras, mattresses to mowers, the retail industry is inundated with returns—over $100 billion of them each year. It’s a conundrum. Consumers buy with the guarantee of free returns, and they return about 20% of all purchases. 

But those free returns aren’t free.

They cost retailers enough to often cut into profitability. So, while retailers offer free returns to remain competitive, the hidden costs are adding up.   Those “hidden” costs then are added back to the cost of the product raising prices.

“Shoppers are making buying decisions based on retailers’ return policies, according to a new consumer research study. Free returns are important to shoppers when making an online purchase, and a majority of consumers check a retailer’s return policy before deciding to buy.” – Forbes

How can retailers manage these hidden costs without losing loyal customers? And what are the hidden costs that retailers need to better manage?  

When it comes to the cost of returns, it’s more than just the cost of the refund for the returned merchandise that retailers are absorbing. Other hidden costs must be factored in that impact both the retailer and the consumer.

Shipping Cost

It’s more than just the cost of shipping that costs the retailer; it’s the labor involved in managing the entire carrier network. Most retailers offer a variety of shipping options for returns, including specified drop-off points that don’t require the customer to even package the return. 

Flex Logistics points out that, “the transport costs not only include the transport from the collection point to the warehouse, but also the trips to and from the repair center (if necessary) and the movements to recycle, reuse or dispose of the shipment’s original packaging.”

Retailers must determine the value of the return to determine if it’s worth the cost of shipping it back. Some items (seasonal, low-margin items, and items that can’t be resold) cost more to return than to have the customer keep or dispose of them. For items that can be returned, a third-party logistics partner can help manage and control costs.

“For low-retail-price-point, low-margin merchandise, and many food/perishable product companies, many companies find it is cheaper or feasible to tell the customer to keep the product than to take the product back as a return. Also, consider the customer’s time, frustration, and the shipping cost as well as your center’s return processing expenses.” F. Curtis Barry & Company

Customer Service

The labor spent on customer service teams responding to complaints and issuing return authorizations adds to the profit loss. These costs are exacerbated when customers are forced to follow up multiple times for a refund due to lost merchandise, poor inventory management, or slow response times. Customer service costs are increased when the service team has to manually review return policies on a customer-by-customer basis, chase down returns by coordinating with the shippers and manage refunds. 

Retailers can start to reduce costs by automating the returns process. If the retailer’s policy is to allow returns, then the more of that process that can be automated, the better. Retailers use everything from AI and automated return systems that allow the customer to use a QR code to drop off an item at a specified location without having to contact customer service, which reduces the cost of after-purchase customer service. 

It’s a tricky balance because how the return is handled can often determine whether the customer returns.

Warehousing & Refurbishing

The cost of storage is high but having to receive returned merchandise can add significantly to that cost. Leasing space, employing people to manage deliveries, ascertaining the product’s condition, and potentially refurbishing the product for resale all add costs that eat directly into profitability.

Technology is a critical factor in reducing return costs. It provides visibility throughout the entire return process, from managing refunds to collating information about what products are returned and why, so that retailers can make decisions about merchandise. Some technology can even help retailers manage returned inventory to fill backorders and new orders. Third-party partners can help manage the overall returns program to reduce costs further.

Retailers Aren’t the Only Ones Bearing the Hidden Costs of Returns

The $100 billion in retail returns annually isn’t just costing retailers. There’s a sustainability factor at play, too, when calculating the impact of more trucks on the road and more merchandise heading to landfills. While brick and mortar receive fewer returns and can restock more of the items that come back, it is still costly. But online orders result in an approximately 25% return rate, and that’s taking a heavy toll—not just on profitability, but also on the environment. 

“All of that unwanted stuff piles up. Some of it will be diverted into a global shadow industry of bulk resellers, some of it will be stripped for valuable parts, and some of it will go directly into an incinerator or a landfill …. We can dispense now with a common myth of modern shopping: The stuff you return probably isn’t restocked and sent back out to another hopeful owner.” – Atlantic 

An estimated 6 billion pounds of landfill waste and 16 million metric tons of carbon emissions are generated by returns each year, according to Tobin Moore, CEO of returns solution provider Optoro, in an interview with CNBC. 

CEO of returns solution provider Optoro, in an interview with CNBC.

As more brick-and-mortar retailers offer online shopping and free returns and shipping to compete with their ecommerce competitors, their return costs are quickly rising. “While traditional retailers have been retooling and upgrading to capture more online sales, back in the shipping department an unintended consequence has been piling up—mountains of returns. And worse.” – Forbes

Maximizing Efficiency in Returns Management

If the customer’s needs aren’t met, the biggest loss to retailers is the return customer. Customers who must jump through hoops to complete returns or who wait a long time for a refund get frustrated. The next time the customer chooses to shop, they will likely choose a competitor. 

The first step in making retail return management more efficient and cost-effective is to employ data analytics to understand what is being returned, how often, and for what reasons. 

A return policy should be designed with the customer experience at the forefront. Retailers don’t accept returns for any other reason than to improve customer service, increase customer retention, and amplify customer loyalty. To make the return management program as effective and cost-efficient (and sustainable) as possible, retailers will need to invest heavily in technology that can automate and track returns, minimize the labor impact, and maximize the repurposing and valuation of the merchandise being returned. 

There are no perfect solutions; customers want to have the option to return what they buy, whether they’re in the store or on the website. If the retailer doesn’t offer that option, they may simply lose the sale. So, the key must be to ensure that return management is as much a priority as every other component of your retail strategy.

Retailers are Banking on Buy Now Pay Later
Retailers are Banking on Buy Now Pay Later 1440 428 ASG

Today’s shoppers are used to recent innovations like BOPIS and curbside pickup for delivering products, and they want more payment options at the register too. Buy Now Pay Later (BNPL) solutions, also known as Shop Now Pay Later, caught fire last year, making up nearly 2.5% of the global eCommerce market, and the payment method is now catching on in U.S. brick-and-mortar stores.

Many retailers are now turning to BNPL platforms, such as Afterpay, Klarna, and Affirm, to create an alternative payment option for the in-store shopper. Retailers are using BNPL as a payment differentiator to diversify their target market and lure Millennial and Gen Z shoppers who love the contactless nature and budgeting muscle BNPL options provide.

BNPL 101

As inflation remains high, consumers are looking for ways to fulfill their holiday lists while overcoming economic challenges. Enter “Buy Now, Pay Later,” the modern-day reverse layaway option that allows buyers to get the product they need now, but pay for it later in interest-free installments. In most cases, a consumer makes an upfront payment or initial payment. The balance is then spread out over a predetermined number of payments. There are usually no added fees for the consumer unless the borrower misses a payment.

Are consumers using it? In a big way, particularly Millennial and Gen Z shoppers, whom retailers want to woo. With their general distrust in credit cards, many Gen Z shoppers like being able to budget for their goods post-purchase, without the plastic or a hard pull of their credit. That helps explain why BNPL loans grew more than 10 times from 2019 to 2021 and they have only been increasing.

A recent survey found that 48% of Gen Z respondents said they planned to use BNPL to pay for gifts this holiday season, other generations of consumers aren’t far behind. Nearly 47% of millennial respondents and 40% of Gen X respondents said that they plan to use BNPL to finance some of their holiday gifts this year. Only Baby Boomers bucked the trend, with 14% of respondents stating they intended to use BNPL for holiday spending.

Experience Driven Loyalty

In survey after survey, consumers consistently put “experience” at the top of their wants list when it comes to retail. And as retailers continue to refine their shopping experiences, they must empower customers to pay how much and when they choose. It’s the type of satisfaction that can drive repeat business.

Although the U.S. has been somewhat slower to adopt BNPL than retailers in Australia and Asia, it has certainly come in with a boom. In a recent podcast, Karen Strack, Senior Vice President of Transformation at Unibail-Rodamco-Westfield, explained how retailers can use BNPL as a positive differentiated experience that brings shoppers back.

“The powerful appeal of such payment configurations cannot be overlooked when it comes to reimagining the in-store shopping experience to provide consumers a better overall experience,” said Strack.

World Pay Head of Vertical Growth, Maria Prados, said in the podcast that the loyalty engendered by BNPL platforms was unexpected. “Buy-now-pay-later creates a lot of loyalty and community, which is very unusual for a payment method,” said Prados. “But 30% of shoppers won’t buy unless there’s a BNPL option. It’s the fastest-growing method globally.”

Strack also shared how BNPL can help consumers through the product lineup journey. “One of the observations that we have had is that a lot of the shoppers are graduating through that process. So, especially with a luxury client, they might actually just start with buying an accessory or a scarf. And then they start to really understand the value in that [they] can control their budget, and they’re graduating to handbags and higher-end prices. And from a retailer perspective, that’s creating lifetime value in your shopper. It’s a really big bonus.”

The Downsides

One of the biggest disadvantages for merchants is the fees associated with working with BNPL platforms. Some have fees as little as 1.5%, making this a great option for reducing credit card fees that they pay, which can be as much as 3.5%.

Another consideration is what the future holds for the BNPL industry. With a substantial increase in consumers taking advantage of this service, it has caught the eye of financial services regulators who are concerned about potential risks.

The Consumer Financial Protection Bureau (CFPB) warns that borrowers face inconsistent consumer protections—protections that are standard elsewhere in the marketplace. As more BNPL providers are creating digital profiles of users, the CFPB is also warning consumers about the risks that come with monetizing consumer data, including the threat to consumers’ privacy. As a merchant, it’s important that you work with credible third-party providers. It’s also likely you will need to stay on top of industry regulations to ensure you don’t play a role in any consumer protection violations.

Give Shoppers Control

Sure, the appeal of BNPL is the ability to spread out costs over time. But what BNPL really offers consumers is control, something consumers have been craving since the pandemic. Prados told Business of Fashion that the pandemic spurred retail five years ahead in innovation in a matter of months.

“While it will be painful for the industry and economy at scale, the situation allows for so much necessary innovation,” she said. “Payments can be an afterthought, but we are talking about the very end of your conversion funnel — it could not be more key.”

The Shifting Landscape of Retail Real Estate
The Shifting Landscape of Retail Real Estate 1440 428 ASG

It’s an exciting time to be part of the retail industry. For years, there have been hand-wringing warnings that brick-and-mortar was dying. 

There are still factors that keep the retail real estate market on edge – concerns about inflation, recession, the supply chain, rising material costs, and geo-political instability mean assessing risk must be part of the decision-making process. However, even with those concerns, the economy has remained stronger than expected, with retail sales growing moderately.

As it turns out, people still really love to shop in person – so much so that brick-and-mortar is seeing a revival. This revival is driven by a change in consumer behavior as well as a change in retail strategy, consumer demand, and the state of retail real estate.

Changes in Consumer Behavior Require Retailers to Adapt

Shoppers are becoming more sophisticated and selective, turning away from traditional department stores. Their expectations also are changing. While this was, in large part, accelerated by the pandemic, shoppers were already beginning to demand more from the shops they frequent. The focus for consumers is on the shopping experience.

When it’s so easy to get what you need delivered at the click of a button, physically going into a store needs to be about more than just acquiring stuff. Perhaps that is partly why shoppers are not patronizing traditional department stores, which have been steadily declining, while at the same time surging to the new, exciting experiences being offered by DTC brands that are opening physical stores. 

Rethinking The Store Experience

The U.S. leads the world in retail real estate market growth, so how do retailers take advantage of that growth and position themselves for ongoing success? How can they ensure they are choosing the right locations and putting themselves in the best position amid fierce competition? How are current trends in commercial retail shaping the retail landscape? 

Many retailers are rethinking their store experiences. They are experimenting with store design and location; they’re meeting consumers where they want to shop. This has resulted in innovations in retail, from pop-ups and temporary shops to adjusting where stores are placed, what product mix they carry, and the size of the store. It’s an exciting time for retail leaders who are open to discovering new ways to connect with consumers and reinvent themselves.

Let’s take a look at a few of the factors impacting the shifting landscape of retail real estate.

Fierce competition in top-tier centers and street locations has altered location strategy for many retailers, driving them elsewhere. This has been amplified by a mass exodus to the suburbs by consumers who can now work remotely and prefer to shop in their own neighborhoods. As consumers seek more community and connection, retailers are responding. In an interview on the Shopify blog, Vinny Martinelli, owner of Helios Sunglasses, a sunglasses and apparel store in Rehoboth Beach, Delaware, summed it up: “COVID changed everything, especially [the] shopping experience. More people [are] working from home and staying local.” 

A high number of retail vacancies is encouraging retailers, particularly DTCs, which embrace the entrepreneurial spirit of retail, to try new locations and store types. With some legacy brands exiting and a variety of DTCs moving in, the real estate market is red hot right now. Digital-first brands are gobbling up the hottest locations and bringing new retail experiences with them.

Branching out beyond physical retail, some retailers are experimenting with frictionless technology (BOPIS, tighter integration between online and in-store, and sophisticated apps), retail healthcare, and improving the user experience in order to deliver better experiences to consumers. 

Radical reductions to lease lengths have made initial lease negotiations much more critical. However, these changes also allow retailers to experiment without the six- to 10-year renewals that used to be required to secure the space. 

Lease complexities require expert tenant representation to ensure there are appropriate protections in place. Provisions that were introduced during the pandemic are now being baked into leases as a matter of course to ensure retailers have recourse for situations beyond their control.

Embrace Change To Find Success

In his book, Secrets of Retail Real Estate: How Successful Retailers Win, ASG founder Steve Morris explains: 

“Successful retailers are reinventing their customer-facing practices and technologies to create a unified customer experience. Real estate decisions and approvals can no longer be processed on a center by center, deal by deal basis, but must reflect broader market, portfolio, and customer engagement strategies. This is the new real estate world.”

Finding the Right Location in this Environment

To find the right location in this shifting landscape requires access and understanding. “It’s critical to understand how markets develop and how they’re changing,” explains Doug Tilson, who leads ASG’s Tenant Representation. “That can only happen when you have access to up-to-date, comprehensive data.” 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. 

Type your search here
Skip to content