Phillips Edison: Three top retail trends
Brands focused on health-and-wellness services are moving into the nation’s shopping centers.
That’s one of the insights found in an overview of the top retail shopping center trends of 2019 by Phillips Edison & Company (PECO), of the nation’s largest owners and operators of grocery-anchored shopping centers. PECO anticipates that 15% to 20% of the leases it executes in 2019 will be medical-related – a significant increase over previous years. The report was as part of the International Council of Shopping Centers’ annual RECon event in Las Vegas.
Retailers are prioritizing convenience as well as introducing smaller store formats to drive engagement and satisfaction, according to the report, with the decisions heavily informed by data collected by retailers related to shopping patterns.
“There is no question that data is king,” said PECO director of national accounts – east Ryan Mitzel. “Retailers have more resources than ever to efficiently gather and analyze information that helps them better tailor their offerings to their consumers. This information is also being leveraged during the site selection process to help brands determine precisely where they need to be – down to the hard corner.”
Here is PECO’s overview of the emerging trends that are sweeping the retail landscape, and the brands that are leading the charge:
• Healthy Living = Healthy Retail. Brands focused on providing health and wellness services that were traditionally located in office buildings – such as dental practices, physical therapy providers and medical imaging centers – are relocating to or expanding into grocery-anchored shopping centers. These properties represent a natural fit for the expanding medical retail category as health and wellness continues to factor heavily into consumer spending decisions. By locating in necessity-based shopping centers, medical retailers benefit from high levels of foot traffic while consumers gain more convenient access to the necessary services they provide.
PECO has executed leases with ATI Physical Therapy, Benchmark Physical Therapy, SimonMed, America’s Best Eyeglasses, Pacific Dental and StretchLab, among others, and the company anticipates that 15% to 20% of the leases it executes in 2019 will be medical-related – a significant increase over previous years. The company also noted that the CBD retail industry, which touts cannabidiol’s potentially positive health effects such as reducing anxiety and alleviating headaches, has seen a meteoric rise to prominence as major specialty retailers have spread across the country and CBD-related products have made their way onto the shelves of established retailers including CVS, Walgreen’s and Ulta.
• Convenience is King. Convenience continues to trend with grocers implementing a counter-intuitive movement to get customers in and out quickly. Walmart announced it would allow customers to return items to concierge employees at the front of their stores rather than waiting in lengthy return lines. Stop & Shop has implemented a mobile-checkout feature to 23 Chicago-area stores, which allows customers to completely skip the checkout and any human interaction. Kroger is also merging tech with convenience via autonomous delivery vehicles.
• Small is the New Black. Several major retailers and larger-format concepts are testing a decreased footprint. Aldi UK has implemented “Aldi Local” in London, which totals 6,500 sq. ft. Although the company insists the new store does not indicate a push into the convenience store sector, it could signal an expansion of the smaller store format.
Another concept on the small-scale “fore-front” is golf entertainment venue Topgolf, which is opening small-format locations to help the brand “swing” into small and midsize markets. Finally, Whole Foods Market is not delivering its “whole” package at its new store dubbed “Daily Market” in the Chelsea neighborhood of Manhattan. The store is dedicated to grab-and-go food and travel items, and includes self-checkouts for the extra-busy New Yorker.
“While the so-called ‘retail apocalypse’ has failed to fully materialize, what has proven to be true is that we’re in the midst of an exciting retail evolution, as retailers who fail to evolve are dying and making room for more creative, innovative concepts to take their places,” said Ashley Casey, PECO’s director of national accounts – West. “As we noted last year, we continue to see growth in the number of Internet-based retailers opening physical locations – including Casper, Warby Parker, Peloton and Untuckit – which we believe validates the brick-and-mortar model.”