It’s undeniable that the millennial generation craves unique experiences, quality interactions, community, and entertainment. Although I’m technically a millennial, I don’t consider myself to behave like one most of the time—and that’s probably because I’m running around chasing my three young children—but I do recognize the unique impact the millennial generation has had on the retail environment. The expectations of your average millennial consumer and the proliferation of e-commerce has presented both challenges and opportunities for companies to remain relevant.
Although the impact of e-commerce—and Amazon in particular—on retail segments such as hard goods, soft goods, and electronics isn’t a new trend, we’re still seeing the influence it has on some of the largest retailers in our market. For example, over the last several quarters we’ve seen bankruptcy at Sports Authority and closures from department stores like Macy’s and Sears, while other players such as Hastings have had to shut doors and/or halt expansion.
However, there are many retailers that have embraced the new retail landscape and are finding ways to adapt to the millennial shopper and e-commerce trends by aiming to improve the shopping experience. At brick-and-mortar locations, this is being accomplished by making products more interactive, refining store aesthetics, and strategically redesigning store layouts. One retailer in the midst of a transformation is Toys “R” Us, which now offers in-store birthday activities, interactive toy experiences, loyalty package rewards, and themed events to draw parents and children into stores. Additionally, Best Buy has redesigned their department layout to provide a more collaborative atmosphere between customers and employees, prompted in part by the growing popularity of virtual reality software and shop-in-shop concepts like the Samsung Experience Shop.
As retailers try to stay ahead of technological changes in the marketplace, landlords are also adapting to the new retail landscape by considering more non-traditional tenant mixes in their shopping centers. Legacy West, an urban mixed-used development in Plano, is an ideal illustration of a live-work-play environment accomplished by a combination of 250-acres of retail, residential, office, and hotel space embellished with refined architectural details like outdoor fountains, rooftop balconies, and patios.
Many restaurants are also having to adapt their operations to meet the demands of customers. Restaurants like Panera, Zoe’s Kitchen, Starbucks, and Corner Bakery have found that in vehicular markets like Dallas-Fort Worth, drive-thrus can translate into big revenue bumps. I know from experience that sometimes unloading three youngsters is enough of a challenge, if there’s not a drive-thru option my family is less likely to dine there.
As millennials make their influence felt across the retail landscape, it will be interesting to see who will be able to adapt as the industry continues to evolve. Retailers will have to work to keep up with the expectations of millennials and smart retailers will recognize the opportunity to increase market share if they employ the right strategies.
Ryan Johnson is senior vice president at SRS Real Estate Partners.