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After more than a year of mainly online shopping due to the pandemic, brick-and-mortar retail stores are finally reopening. Retail foot traffic across the US and Canada is picking up, and it’s even higher than it was in 2019. Here are some of the biggest changes that are currently happening in the retail world.
Shoppers Are Slowly Going Back to Physical Stores
The majority of shopping malls in Canada and the US were closed until recently, together with many other retail shops. Thanks to the COVID-19 vaccine rollout, consumers feel more confident and safe to pay a visit to their favorite retailers again.
The latest foot traffic analytics for the first week of April shows that Nike, Adidas, and Under Armour stores retail foot traffic is up by 20%, compared to the same period in 2019.
Target, Kohl’s, and Ulta witnessed the same increase. Their sales were consistently high during the pandemic, and they are currently seeing higher foot traffic than in 2019.
After seeing these surprising changes, more and more brands are putting more focus on their physical stores. Even those who have been operating solely online are looking to open brick-and-mortar stores.
They increasingly realize that a physical location can help them trim down costs, as consumers can pick up and return products in person. Brick and mortar retail also allows retailers to connect with consumers, build relationships, and inspire loyalty.
Eddie Bauer and Kohl’s New Retail Partnership
Kohl’s, a famous department store retail chain with over 1,100 stores in 49 states, has recently partnered with Eddie Bauer, an American clothing store chain. Eddie Bauer has over 300 stores across the US and Canada, and this partnership means expanding to over 500 Kohl’s stores to sell women’s, men’s, and kids activewear.
Kohl’s vision to become the leading supplier of active and outdoor wear is only one example of a successful direct-to-consumer store strategy and business growth. Other retailers are sure to draw inspiration from these brands and join forces to attract more customers.
Reimagining Shopping Malls Post-COVID
Whether retailers enter a partnership or make strategies to bounce back on their own, many of them may need to focus on redevelopment first. Many shopping malls yearn for redevelopment, and some will turn to innovative ideas to reinvent themselves and reimagine the shopping experiences.
Some mall owners plan to create mixed-use spaces inside shopping malls, with residential and commercial tenants bringing higher foot traffic. Others are considering going after local schools as possible tenants to fill spaces. Retail investors believe that although customer shopping behavior has drastically changed, the change is likely to be temporary and will start to look more like pre-2020 shopping behavior before we know it.
Summary
A return to normalcy is expected to happen quickly in retail. The change in consumer behavior has already been witnessed by the higher retail foot traffic across Canada and the US. This all looks quite promising for retailers and retail CRE investors. Canada, in particular, offers an abundance of retail CRE investment opportunities, which were not in shortage even during the pandemic. All things considered, the retail foot traffic is up and is expected to continue to improve.