By Veronica Polanco
Michael Kercheval, CEO of ICSC provided young industry professionals with an update on where the future of the retail real estate industry is headed and the secret as to why it’s still a thriving, creative sector in business at the 2014 ICSC Next Generation Conference in Philadelphia. He pointed out that there are several misconceptions regarding the industry lately that have been presented in the media.
However, the narrative is changing.
Currently, 94% of retail sales occur in store. This past year, retailers announced 2,000 store openings while occupancy rates have been steadily rising and base rents have seen an increase in 2013. Demand for shopping center space has been vastly outpacing supply and even online retailers have been opening up their own brick-and-mortar stores, proving that consumers still value the in-store shopping experience.
The second misunderstanding is that the industry is irrelevant and nonadaptive. Yet retail is constantly changing to accommodate the consumer. Consumer desires and interests are now driven by a multi-channel, nonlinear process as customers use mobile devices, social media and internet research to keep up with trends in the industry. Retailers have been using technology to facilitate sales by adapting trends like in-store pickup, mobile self-checkout, “web rooming” and guide shops. While it’s true that e-commerce sales are growing, the in-store shopping experience offers what online cannot.
What’s next in the future of retail is up to the next generation. Kercheval encouraged future leaders to use the changing times as an opportunity for creativity. The retail industry has always reacted and adopted and the rise in technology won’t be an exception.