A RECENT REPORT (prepared by CBRE) explains the changes being forced upon traditional retailers by the growing level of online and customer direct activity.
As such, they are predicting the need for a much improved in-store experience over the next decade – if bricks-and-mortar retailers are to remain competitive.
Static shop window displays will need to be replaced with ever-changing virtual showrooms – to attract and keep customers interested.
Chain operators are likely to systematically close their secondary locations. And maintain a smaller number of stores in high-traffic areas.
Why is this Happening?
Ever since the Global Financial Crisis, the retail sector has been in continuous “sale mode”. And already you’re starting to see vacancy rates increase in many traditional retail strips.
As you can see from Fitzroys’ snapshot from Melbourne, most of these well-known centres now have double-digit vacancy levels.
And unfortunately, you are seeing the same pattern repeating itself within most capital cities.
As a result, boutiques are fast being replaced by cafés, juice bars and restaurants – along with doctors, dentists and other service retail.
Bottom Line: Retailing is expected to remain fragile for some time to come. And it will be interesting to observe the full impact of the surge in online activity.