Retail is a big part of many commercial real estate portfolios. While retailers are under a lot of pressure from the likes of Amazon, that’s not the extent of their problems. In this post, we share the perspective of the experts at Chain Store Age, who says shoppers’ experiences are key.
In the March 13th edition of the publication, author Marianne Wilson comes right out and says:
Disappointing shopping experiences are costing brick-and-mortar retailers serious money.
She bases her statement on the recent TimeTrade State of Retail 2017 survey. It suggests that:
…U.S. retail stores left about $150 billion in potential revenue on the table in 2016 by failing to offer shoppers the personalized shopping experiences they want. Respondents said that, on average, they would increase their in-store spending by 4.7% if they received better, more personalized service from retailers.
Analyzing these results, Gary Ambrosino, CEO of TimeTrade, points out: “…just imagine the positive ﬁnancial impact on brick-and-mortar retailers if revenue jumped by 5%. A renewed focus on providing shoppers with a better, more personal instore experience would go a long way toward stemming the tide of defection to competitors and online sellers.”
The numbers were pretty compelling: “49% of survey respondents said they never or only sometimes receive what they consider to be personalized service. In fact, 70% of the time they shop they said they never or only sometimes can ﬁnd a sales associate when they need assistance. Seventy-one percent of consumers surveyed said they sometimes or always abandon dressing rooms and leave stores if they can’t obtain help with sizes, color, etc.”
Ambrosino doesn’t think all is lost though, saying:
In store shopping is far from dead — but it does have to change to keep up with the trends. These survey results show that people deﬁnitely like shopping in stores so they can touch and feel products, and because they enjoy receiving prompt, personalized service.
He adds that:
The key to success for brick-and-mortar retailers is to fully utilize their existing staff and relentlessly focus on providing personalized service to every customer across the board and capture that additional revenue, instead of letting those dollars go elsewhere.
The Takeaway For Commercial Real Estate Investors
Retail isn’t on the way out, but some retailers are healthier than others. When you look at investing your commercial real estate dollars into retail, do your due diligence to determine the retailer’s future prospects.
Pacwest Commercial Real Estate has matched many clients with retail investment properties, all that offered excellent outlooks for the future.
Perhaps the best approach is to rely on the wisdom of René Nelson and the Team at Pacwest. They’re expert in assessing the viability of investments in retail properties.
Read the full post here.
Are you looking at investing in retail commercial real estate? There’s a lot to do to ensure your invesment offers the returns that meet your investment goals. Call René Nelson and the staff of friendly professionals at Pacwest Commercial Real Estate today at (541) 912-6583.