Will Retail Ever Completely Go Away?

For all of the concerning headlines and panic over the future of retail and the growth of ecommerce, few believe that retail is going to completely go away. Kevin E. Kelley of retail design firm Shook Kelley says that retail is going through a massive change, but it is here to stay. “It is going to go through a complete shock to the system,” he tells GlobeSt.com. The shock has designers and developers alike looking five years into the future to build retail that will serve future consumers. This includes separating long-standing trends from fads, focusing on urban retail that is easily accessible to consumers and understanding the difference between shopping and buying—the biggest change to emerge today.

“We are almost always in a three to five year mindset. People get really excited about what is happening right now, and that is a common mistake that people make. They don’t realize that we may be burned out on some of these trends in three years,” Kelley, a founding partner and principal at Shook Kelley, tells GlobeSt.com. “We have to make a property that is more on trend and less on fad, and we have to look at the way that people are going to be living in the next 10 years.”

To look ahead, Kelley separates shoppers into five generational groups and looks at shopping patterns within each to determine what might become a long-term trend. “There are a lot of generational aspects that we look at. There is a sweet spot in retail—but it isn’t an absolute,” he explains. “When you are a kid, you don’t have a lot of control of purchases, but you have a lot of spending money; and when you are really old, you tend to be smarter about your purchases with less vanity and conspicuous consumption. We look at the sweet spot between 26 and 55, and we look at where that audience is moving. We tend to break that audience into five audiences.”

Urban retail and mixed-use properties are the today’s trends that we can expect to see for at least the next two decades. “Urban retail and urban mixed-use retail is a trend that we think will be happening for the next 20 years,” says Kelley. “Within these urban retail projects, there is generally a housing component. The people living in that housing are setting patterns that aren’t going to change for years, so for the next 25 years, we can start to think about how people will be living in these units.”

Designing for urban sites—especially for sites that will continue to be profitable well into the future—requires solving access issues, from parking to transit to the front door. “There are so many urban sites that people are trying to figure out how to get in,” says Kelley. “That requires a massive change in the types of concepts. We see a lot of retailers that weren’t meant for urban retail. We have to rethink building infill retail in tight, small, dense sites, where you are asking the customer to go thorough a lot of work before they get their pay off. We see that happening for the next 15 years at minimum and we think those projects will be revenue generating for the next 20 years.”

While it is important to look into the future, Kelley also says that today we still have an excess of outdated retail product, and there will continue to be a shock to the system as the market finds a way to absorb that product. “We still haven’t carved off all of the Radio Shack, Bed Bath & Beyond, Macys,” says Kelley. “What will preoccupy the national discussion will still be retail. We have to bend the herd quite a bit until we get retail that is relevant and on target and that understands the difference between buying and shopping. We buy for things that are transactional and predictable. We crave shopping experiences that are social. Not every product category fits that, and that shift is going to continue happening for the next five to 10 years. I think that you will see an inevitable shake up around that. It is going to take time to cycle through.”