'Closer to the Consumer'

MADISON, NJ—Shoppers' expectations are being shaped by the promise of same-day delivery as well as new retail technology, and commercial real estate is keeping up with the changes. In connection with the release of Coldwell Banker Commercial Affiliates' second annual survey of consumer habits, the company's Fred Schmidt tells GlobeSt.com that one way that commercial brokers are affected is by the trend toward smaller stores.

It's about “getting closer to the consumer” with smaller footprints, says Schmidt, president and COO of Coldwell Banker Commercial Affiliates. “For example, Walmart is going to a smaller footprint overall, and Best Buy is doing the same type of thing.” These smaller locations don't carry as much product, he adds, “because they're getting backed up by the supply and distribution chain.”

At last week's ICSC Western Division Conference in San Diego, “there was a lot of discussion about how warehousing and distribution facilities are moving closer to the consumers. It's that whole omni-channel approach. They impact off each other; they're not independent variables. They're actually dependent variables.”

At the same time, says Schmidt, “you're also seeing e-commerce companies going into physical stores. That's the trend in the other direction. It's all about getting closer to the consumer and the same-day delivery preference. It'll be interesting to see how prominent that is this holiday season.”

These and other effects of consumer preferences figured prominently in CBC's survey, which was conducted on its behalf among 2,000 adults by Harris Poll. It sought to gauge the online and in-store shopping habits of Millennials, Generation Xers and Baby Boomers.

While Millennials are leading the trends toward same-day delivery and mobile wallet platforms—65% of survey respondents in this age group are more likely to make a purchase if same-day delivery is available—the older generations are getting in step, as well, Schmidt says. And although the common assumption is that Millennials are glued to their laptops and smartphones, in fact 72% percent of adults ages 18 to 34 say they prefer shopping in a store, compared to 65% of Gen Xers and 68% of Boomers.

Not only that, but millennials are also much more likely than other generations to enjoy the experience of being in a store or mall. The CBC survey found that 73% of respondents in this age group take that position, compared to 58% of Gen Xers and just 48% of Boomers.

“That face-to-face interaction is very much something they want,” says Schmidt of Millennials. As for the lower enjoyment score posted by Boomers, he points out that when shoppers in their 50s and 60s have been going to malls their entire lives, the experience has become more routine by this point.

CBC conducted the consumer survey to help provide guidance to its brokers, and current omni-channel retail trends don't point in the direction of physical space going the way of blacksmiths. “It's not the demise of brick-and-mortar,” he says. “It's just how you address the clients and their needs, and how you configure their space.” Wider use of mobile pay, for example, is “on the horizon” and will have an impact on store configuration.