Today’s retail sales need both brick-and-click to function completely. Studies have shown that the strongest retailers operate across multiple platforms including brick and mortar, mobile and web.
There are some headlines that attempt to pitch one is better than the other, and may suggest that brick and mortar retail is under pressure; however, this could not be further from the truth. Physical retail real estate is far from dead, but retailers must take note that the physical landscape has evolved just like the buyer has evolved.
Physical presence: Benefits of investing in commercial real estate
In the past, many regarded commercial real estate ‘CRE’ as an alternative investment, but the best Canadian CRE has produced enough positive results that many national and international investors view it as a safe bet to add to their portfolio. Physical real estate offers wealth building and protection to your portfolio. Physical retail real estate, or hard assets, allows your investment to be lock into place. While liquid assets allows greater accessibility to cash.
Having both physical and liquid assets in your portfolio offers a great deal of flexibility and leverage. In a physical asset, such as real estate, it can generate income without the need to sell the asset. Liquid assets offer easier access to cash, however it can be easy to overspend in areas that does not improve the asset. Both form of assets, in some capacity, are important to staying competitive, especially as Amazon, Walmart and others focus more attention on omni-channel sales.
Digital presence: Benefits of omni-channel sales
Studies have shown that the strongest retailers operate across multiple platforms including physical, mobile and web. When customers are able to search online first and then travel to the store to touch and feel the item they are more likely to buy while in the store. Thus, having a presence online actually drives store sales and it offers an alternative for those who cannot physically go out to purchase the products they need.
E-commerce initially appeared to be a threat to brick and mortar businesses; however, many owners of e-commerce stores are noticing the need to have a physical location as well to attract a greater number of customers. This why a growing number of e-commerce retailers are opening up physical stores in order to service their customers faster and many CRE owners are targeting online retailers to help fill vacant space.
Being omni-channel is important, especially for attracting Milennials buyers, the largest living generation, and the Gen Z buyer who spends 2x-3x more on social channels than any other consumer. The goal of omni-channel retailing is to appear to be omnipresent. To be everywhere by leveraging multiple interactive touchpoints; such as, mobile apps, websites, interactive catalogs, in-store tablets, etc.
The results show that customers who use 4+ channels not only spend 9% more than those that use just one channel, but they have a 30% higher lifetime value.
Creating a digital experience for the shopper helps to drive sales at your physical location and improves their loyalty.
Bold headlines that suggest the demise of brick-and-mortar real estate echoes a view from those retailers that refuse to adapt. Brick-and-mortar retail is still important and can be integrated with multiple sale platforms to provide the customers the convenience they seek. Further, having a digital presence can compliment an offline business, so focusing on omni-channel retailing is key.
ReDev Properties have investment opportunities for those who seek to develop, acquire, own and manage retail and mix-use income properties in Western Canada and Ontario. Contact us today to get started.