Fred Schmidt of Coldwell Banker Commercial

MADISON, NJ—The 2016 holiday shopping season proved to be another record-breaker for retailers. According to the National Retail Federation, more than 154 million consumers shopped during the Thanksgiving shopping weekend. The number of shoppers who purchased online versus in store is nearly tied: 44% of consumers shopped online compared to 40% who shopped in-store.

Coldwell Banker Commercial recently surveyed over 2,000 US adults to get a sense for what consumers expect while shopping in store and what that means for retail space. Similar to what the NRF uncovered, the survey found that almost half (43%) of US adults report they prefer to make purchases in a store instead of shopping online. At the root of this figure is the fact that while e-commerce is perceived to be the darling among shoppers, buyers still crave a traditional shopping experience.

The survey uncovered three major trends appearing on the horizon which brick and mortar retailers will have to quickly adapt to in order to operate and succeed in tandem with e-commerce. These trends will also require retailers to rethink store layouts and warehousing needs as omnichannel retail and new technology gain speed.

Retail-tainment Will Drive Traffic In Store

Shoppers want an all-inclusive shopping experience where they can eat, play and shop all in one place. Nearly three in four (74%) adults reported that any in-store experience beyond the normal shopping activity is more likely to bring them to a physical store. The in-store yoga classes offered at Lululemon, product demonstrations at Sur La Table and holiday-themed events and displays seen recently at malls across the country are all examples of experiences that make consumers more likely to visit a physical location as opposed to making a purchase online.

Shoppers' expectations are becoming much more complex, and this leaves retailers in need of spaces that are more open, dynamic and adaptable in order to accommodate these kinds of retail events. Stores will have to be big enough to hold in-store classes and configured in such a way that the product on the floor is still adequately displayed. Today's stores are doubling as showfloors and entertainment spaces.

Shopping experiences give brick and mortar retailers an upper hand over e-commerce. Why? Because it allows retailers to provide shoppers with one of a kind experiences that they just can't get from behind the screen.

Omnichannel Offerings Will Expand

Omnichannel retail encompasses all of the multiple channels retailers use to sell goods, ranging from brick-and-mortar, to online and mobile shopping. In today's world, most businesses use a blend of these tactics. We're increasingly finding that just as brick-and-mortar shifted online in the early 2000s, traditional e-commerce companies are quickly acquiring brick-and-mortar stores and facilities for a variety of reasons.

Today's retailers are increasingly blending in-store and online shopping to create a more seamless experience and to make the store a focal point in e-commerce activity. According to our survey, over 1 in 3 shoppers report they are more likely to shop online if they can return in a physical store; similarly, over 1 in 5 shoppers say they are more likely to shop online if they can pick-up in store.

In order to accommodate this offering, retailers will rely less on in-store stockrooms and will have to invest in off-site warehouse spaces to handle the volume of merchandise needed for increased in-store transactions. Despite these challenges, in-store returns from e-commerce are a huge traffic driver for retailers and offer an advantage by bringing customers in store. These types of offerings also offset some shipping costs, which have recently come to light as a major cost burden for e-retailers.

Technology will continue to change how we shop

Amazon's announcement in November of its new Amazon Go store in Seattle is a great example of how technology is influencing retail space. The store uses big data and mobile technology to automatically charge customers for items they pick up around the store as they walk out, eliminating the need for registers and check-out lines.

Prior to Amazon's announcement, our survey asked customers whether they would be open to interacting with brands via in-store tracking and mobile notifications on a mobile device. The majority of Americans were lukewarm about the idea. All in all, just one in ten U.S. adults reported they would be open to the concept. The exception? Millennial shoppers: nearly 20% of respondents ages 18-34 would be interested in this kind of retail technology.

Of course, with any new technology there is always a learning curve and a trial period which may warm consumers up to the idea of mobile retail tech. These advances may allow retailers to open the store up, permitting them to put more merchandise on the store floor or even reduce square footage. It is still too soon to tell, and we'll likely learn more about this technology and its application after the Amazon Go store opens to the public in early 2017. However, we can already see that '17 will be a year of new emerging retail technology that will continue to shape how customers shop and interact with brands.

Since the advent of online shopping, analysts have predicted that e-commerce meant the demise of the brick-and-mortar store. E-commerce hasn't weakened brick-and-mortar sales, but it has changed the way retailers look at and act on physical space. The truth is, commerce does not only exist online; retailers need a physical domain, whether in the form of a brick-and-mortar showroom, traditional retail store or a fulfilment warehouse in order to provide customers with the in-person experiences, service and speed that can compete with the convenience of online shopping. 2017 may be the year where the tides turn and brick-and-mortar works in sync with mobile and online shopping.

Fred Schmidt is president and COO of Coldwell Banker Commercial, based in Madison, NJ. The views expressed here are the author's own.

Retail-tainment Will Drive Traffic In Store

Omnichannel Offerings Will Expand

Technology will continue to change how we shop

Fred Schmidt is president and COO of Coldwell Banker Commercial, based in Madison, NJ. The views expressed here are the author's own.

Instant Insights /

3 Emerging Shopping Trends That Will Impact Retail Space

Related Stories

Recommended For You