People are reading headlines every day that many of the retailers they grew up with are closing. That the casual dining area is suffering. There’s an overwhelming fear that retail will never be the same, and, to some extent, that’s true.
However, the common thread with many of the retailers who fail is that they’re dinosaurs. They’ve been around forever, haven’t evolved, and haven’t kept up with consumer demand. Even customer service has noticeably deteriorated to the point where, in some cases, it’s nearly extinct. (Question: When’s the last time you had to hunt down a customer service rep to have your question answered? How long did it take?)
If you’re not evolving, you’re falling behind. But those who have planned for the future of consumer demand are finding themselves well ahead of the curve.
There’s a growing number of retailers transitioning to omnichannel providers, offering their products or services in a variety of ways. Online retailers are making the move to bricks-and-mortar and finding a great level of success. At the same time, traditional bricks-and-mortar retailers are establishing their own online presence. Ultimately, it doesn’t matter to them if the sale is made online or in-store; retailers are recognizing that, for a brand to be successful, it’s important to have a presence in both.
Fifteen years ago, a national steakhouse chain opened its doors on a busy corner in Frisco. Not much surrounded it at the time, and residents in the area flocked to it. It was something new. Flash-forward a decade and a half later, and the quiet corner is now surrounded by a retail sprawl aimed at meeting the growing demand of the booming population. As a result, the restaurant, inevitably, has closed its doors.
In its place, however, are new restaurant concepts—a mix of fast-casual, out-of-state chains, and unique options—providing a dining “experience.” When the 25- to 45-year-olds are talking about where they want to go eat, the traditional chains we grew up with aren’t even in the conversation.
Retail follows rooftops, and there’s no better example of that than what we’re seeing in North Texas. Dallas-Fort Worth’s shopping center vacancy rate now is 5.5 percent, down more than 4 percentage points from its 2009 peak. By comparison, the major markets JLL tracks—and even most U.S. metro markets—have seen vacancy decline by roughly 2 percentage points (though both are tracking higher than DFW today).
The failure of retailers that have been around for years, and yet have failed to plan ahead or figure out a way to catch up, is not surprising. At the same time, there’s a large and growing number of retailers who have found a tremendous amount of success.
Customers have always, and will always, expect more. People want quality, service and, especially when it comes to food, they expect an experience. They are what’s driving what we’re seeing now: the next step in the evolution of retail demand.
Robert Franks is executive vice president of JLL.