The Six Rules for Retail Survival

There are new rules that retailers should be following to attract customers, create a good shopping experience and stay competitive in the future. According to a new report from JLL, which analyzed the shopping experience, there are six characteristics that make a “good retail experience.” It needs to be intuitive, meaning an experience that is simple for shoppers to navigate; have a human experience with a knowledgeable staff; it needs to be meaningful in that shoppers feel a sense of pride when shopping at the store; it needs to be immersive with an appealing exterior and interior; it needs to be accessible; and finally, it needs to be personalized. These are national trends, but we wondered how they were taking hold in a market like San Diego, which it sprawling and dynamic in terms of its consumer needs. We sat down with Craig Killman, EVP at JLL, to talk about how the retail experience in San Diego is changing and how the market is effectuating these national trends.

GlobeSt.com: What is driving the changes in the retail shopping experience that are outlined in the report?

Craig Killman: I used to say that neighborhood shopping centers and daily need retail centers were places where people had to go, not because they wanted to but because they had to. Now, landlords have to give shoppers a reason to come, because otherwise they won’t. Absolutely everything that a grocery-anchored shopping—with the exception of food—can be done online. It is all about the shopping experience today and motivating people to get off of their couches for all of these reasons.

GlobeSt.com: How are San Diego retailers adopting these characteristics and adapting to the changing retail environment?

Killman: In San Diego, the coast has been an early adopters of this shopping experience. A lot of trends have been set in those markets, and you are finding a more discerning customer in those markets. With that discerning customer, you are hitting on those six criteria both in the retail shopping environment as well as the tenants that occupy those retail environments. However, in submarkets like Santee or Lakeside, retail hasn’t changed much. That customer is far less discerning and they want they want.

GlobeSt.com: Do you think that every retailer will need to—at some point—incorporate these characteristics into the shopping experience to stay relevant, or does it depend on the shoppers they serve and their location?

Killman: In the long term, every single retailer has to make that investment. If they want to be relevant long term they are going to need to. It won’t take long for the people who live further east to want more from their retail environment because they are going to see other areas. Right now, we are riding a wave of consumer confidence that I have never seen, and at every socio-economic level, you still have the confidence in your own ability and in the economy that you are spending money. When the economy shifts, and it will, the lower and lower-middle class gets hurt more than the upper middle and upper classes, because they have more disposable income.

Now, some retailers aren’t adopting an omnichannel experience at all, and they are brilliant retailers, like Nordstrom Rack, TJ Maxx and Ross. Those retailers have adopted a cat-and-mouse strategy. Those customers want to go in and see what is new, and they can’t have an online channel because their merchandise is so dynamic. Those retailers give their customer base a reason to go into that store and see that is new.

GlobeSt.com: How is this taking effect for smaller retailers and boutique retailers?

Killman: No, I am not seeing those smaller retailers adopting these trends. It is astronomically expensive to create, maintain and sustain and omni-channel platform to reach their customer. The small boutiques, however, are adopting characteristics beyond the brick-and-mortar. I represent the landlord that owns the Forum in Carlsbad, and I put a small boutique out of Solana Beach in the center. The shop focuses on clothing, accessories and gifts, and it is all unique merchandise that can’t be found anywhere. The only way that she can monetize her inventory is if people come to her, get out of their cars and shop. Her customers know that if they do that, they are going to get most of the six things that are outlined in the report. Smaller retailers don’t have to adopt omni-channel or a platform where they can sell their merchandise online.