Retailers Must Adopt Online Technology

LOS ANGELES—A retail strategy that combines a strong online presence with an in-store experience is going to be the dominating theme in 2017, according to Ed Sachse, executive managing director of Kennedy Wilson Brokerage. He forecasts that the retail sector will focus on adopting more technology next year, and that includes everything from ecommerce to social media.

“I believe that in 2017 we are going to see more merging of technology into the retail experience at the store level,” Sachse tells GlobeSt.com. “There is so much competition between online shopping and in-store shopping, and the progressive retailers are creating experiences that are unique to the act of shopping—to actually visiting the story.”

Smart retailers are already executing combined strategies, especially major retailers with a large market share. In fact, this holiday season, CBRE reported that while online sales dominated Thanksgiving weekend retail sales, online retailers with a brick-and-mortar presence performed the best. “The smart retailers are recognizing that technology and social media is a way to drive sale not only to a brick-and-mortar location but also to their online presence,” says Sachse. “You see that with larger retailers that have such strong brand identity. It is critical, though, that all retailers combine in-store experiences with a strong online presence.”

This isn't a totally new concept. Sachse estimated that over the last five years almost all retailers have developed an online presence with ecommerce, but he says that technology is going to become a stronger driver of retail sales next year. That means ecommerce combined with strong social media and online campaigns so that brands maintain both a digital and physical presence. “Over the last five years, the amount of retailers, even smaller local companies, now have ecommerce sites,” he says. It is very seldom that there is a store that doesn't have an ecommerce site. Retailers are making sure that they have multiple outlets to sell to their customers.

While technology and an online presence is crucial, it isn't leading to a huge reduction in store footprints, although Sachse says that store footprints overall are getting smaller. “Store size changes are more industry and brand specific. Daily needs, for example, aren't going to change their footprint, but fashion stores may change their footprint,” he adds. “Tenants are trying to be more economical and conscious of their square footage, and store sizes are getting smaller in general. Some of that is economics and some of that is that retailers are combining sales with their online presence. There are also exceptions. The 55,000-square-foot Nike store in New York City is one example.”

LOS ANGELES—A retail strategy that combines a strong online presence with an in-store experience is going to be the dominating theme in 2017, according to Ed Sachse, executive managing director of Kennedy Wilson Brokerage. He forecasts that the retail sector will focus on adopting more technology next year, and that includes everything from ecommerce to social media.

“I believe that in 2017 we are going to see more merging of technology into the retail experience at the store level,” Sachse tells GlobeSt.com. “There is so much competition between online shopping and in-store shopping, and the progressive retailers are creating experiences that are unique to the act of shopping—to actually visiting the story.”

Smart retailers are already executing combined strategies, especially major retailers with a large market share. In fact, this holiday season, CBRE reported that while online sales dominated Thanksgiving weekend retail sales, online retailers with a brick-and-mortar presence performed the best. “The smart retailers are recognizing that technology and social media is a way to drive sale not only to a brick-and-mortar location but also to their online presence,” says Sachse. “You see that with larger retailers that have such strong brand identity. It is critical, though, that all retailers combine in-store experiences with a strong online presence.”

This isn't a totally new concept. Sachse estimated that over the last five years almost all retailers have developed an online presence with ecommerce, but he says that technology is going to become a stronger driver of retail sales next year. That means ecommerce combined with strong social media and online campaigns so that brands maintain both a digital and physical presence. “Over the last five years, the amount of retailers, even smaller local companies, now have ecommerce sites,” he says. It is very seldom that there is a store that doesn't have an ecommerce site. Retailers are making sure that they have multiple outlets to sell to their customers.

While technology and an online presence is crucial, it isn't leading to a huge reduction in store footprints, although Sachse says that store footprints overall are getting smaller. “Store size changes are more industry and brand specific. Daily needs, for example, aren't going to change their footprint, but fashion stores may change their footprint,” he adds. “Tenants are trying to be more economical and conscious of their square footage, and store sizes are getting smaller in general. Some of that is economics and some of that is that retailers are combining sales with their online presence. There are also exceptions. The 55,000-square-foot Nike store in New York City is one example.”