Experiential Retail Real Estate
Welcome to the Real Estate Espresso podcast, your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re taking a look at the changing landscape of retail real estate. This is the third in a series of episodes focused on the retail landscape.
Last week, we looked at the impact of e-commerce on brick-and-mortar retail. We also examined the global supply and demand dynamics in the US market. Today, we’re focusing on experiential retail, which operates on the thesis that customers will come into your store if you give them another reason to, besides just buying something.
As it turns out, when people visit a store, they often buy anyway — sometimes impulsively, unrelated to the store event. Other times, the event that brought them to the store stimulates the purchase. It used to be that stores would refresh their inventory infrequently, just a few times a year. However, companies like the Limited revolutionized the industry by changing their inventory monthly, giving customers more reasons to visit their store and increase the chances of them making a purchase.
On today’s show, we will look at some names in retail creating a ‘sticky’ customer experience by offering more than just products. By creating an emotional connection, retailers make the shopping experience memorable and enjoyable. My mentor, Dr. Nito Kubane, famously said that “when the value’s unclear, the discussion always degenerates to price.” Customers are more likely to try on clothes and buy cheaper alternatives. But, a more engaging shopping experience is more likely to maintain customer loyalty.
Examples include “Nike Live”, “Dix House of Sport”, French sporting goods company Decathlon, high-end fashion retailer Farfetch, beauty retailer Hue du Beauty, footwear company Vans, cosmetics store L’Occitane en Provence in Toronto, shoe company TOMS, concept store Space98 by Urban Outfitters, and outdoors store Cabela, who are all reimagining the shopping experience to focus on engagement and personalized interactions.
If you are considering investing in retail real estate, this is a trend you absolutely need to pay attention to. Are your customers happy with the space offered, or will they wish to redefine the shopping experience to also include an experiential component? If so, will that require more space, or can the current space be adapted to fit the needs of an experiential element? For instance, many patrons visit Costco hoping for free samples. If Costco were to include cooking classes, would additional grocery stores need a commercial kitchen? How could this be retrofitted? These are some relevant considerations. As you think about this, have a fantastic rest of the day. We’ll talk again tomorrow.
Stay connected and discover more about my work in real estate and by visiting and following me on various platforms:
Real Estate Espresso Podcast:
- 🎧 Spotify: The Real Estate Espresso Podcast
- 🌐 Website: www.victorjm.com
- 💼 LinkedIn: Victor Menasce
- 📺 YouTube: The Real Estate Espresso Podcast
- 📘 Facebook: www.facebook.com/realestateespresso
- 📧 Email: [email protected]
Y Street Capital:
- 🌐 Website: www.ystreetcapital.com
- 📘 Facebook: www.facebook.com/YStreetCapital
- 📸 Instagram: @ystreetcapital
