As online shopping continues to grow, predictions on the future of their brick-and-mortar counterpart becomes an area of discussion, and often resulting in misconceptions. In reality, retail property owners have been initiating changes and refocusing today's malls to attract more foot traffic and sales in alternative ways for some time now. No longer just somewhere to go for retail goods, shopping centres in the GTA are now designed as community-building spots, with lounge areas and shared spaces for visitors to gather. While it's true that brick-and-mortar retail is changing, it's definitely not going away anytime soon. Commercial real estate advisors note that properties housing retail centres are merely evolving to meet today's market trends and the modern consumer shopping behavior. So how exactly is the commercial real estate landscape changing to meet consumer demands in Toronto and the Greater Toronto Area? What do these developments mean for commercial real estate investors? Experiential Retail As online retail continues to grow, brick-and-mortar retailers are challenged to provide unique in-store experiences to thrive alongside the digital market. Commercial real estate advisors note that to combat the Amazon Effect' retail property owners have to reimagine their stores and turn these into conducive spaces for pushing the experience envelope. No longer only serving shopping needs, retail centres poised to thrive even in the age of e-commerce by featuring experiences and an atmosphere customers can't get online, encouraging them the need to physically drop into the centre. Popular features of experiential retail centres would include space for events, demonstrations, and other interactions. Mixed-Use Retail Spaces Today's consumers look for more than a retail experience at shopping centres – they also look for a place they can escape and enjoy other lifestyle needs. Retail centres that enjoy high foot traffic are likely to garner generous returns for commercial property investors. These properties often highlight dining and entertainment alternatives to complement their retail tenants. In fact, commercial property advisors note that for owners and their investors to enjoy increased revenue, retail should only take up 30% of the property space. New property strategies are now recommending 70% of the property space be dedicated to food, entertainment, and lifestyle tenants. Mixed-use retail isn't an entirely new concept. Today's mixed-use shopping locations actually pay homage to the mid 1950's town square models. Paralleling the past, today's millennials and consumers also work, live, and play with in the same vicinity. This increased foot traffic and activity contributes to favourable investment returns on mixed-use commercial and retail properties. Omni-Channel Retail E-commerce isn't the only thing to shake the brick-and-mortar retail industry. Omni-channel retail practices cater to the click and collect' market, such as those ordering food through an app and having a delivery partner bring the food to their doorstep. While most of the experience is online, there remains a tangible component to the entire consumer journey. To adapt to these evolving demands, commercial real estate advisors realize retail spaces must now cater to both the online and brick-and-mortar experiences, making orders and services available online, while still providing tangible and memorable interactions at physical locations. Omni-channel retail is especially evident in retail centres that also feature dining locations. The abundance of online delivery applications has equipped restaurant owners with a new way to reach online consumers; while maintaining an aesthetically pleasing, conducive space for those to experience their means in a memorable atmosphere helps them adapt to experiential retail trends.
There's a new kind of retail boom underway in the GTA. Get ahead of these emerging trends in retail by investing in commercial properties housing these developments. Book a consultation with our real estate advisors today to learn more.