These are the three approaches to Internet retailing being pursued by the retail real estate world highlighted by Creative Visions Foundation chairman Robert Tercek in the keynote address at the MAPIC retail convention last week in Cannes, France.
For those of you who don't know him, Tercek is a "TV director, game designer, and artist" who also happens to be president of digital media at the Oprah Winfrey Channel.
The Creative Visions Foundation dates from 1993, when it was set up in memory of a young Reuters photojournalist Dan Eldon who was killed in Somalia, and exists for "people who use media and the arts to ignite positive change."
Delegates at Cannes may not be feeling as positive about Tercek and Internet retailing after his talk.
But this was only the dinosaurs who cling to the hope that if they keep their heads down, Internet retailing will go away and never account for more than 10 percent of retail sales.
In fact, many experts believe the figure is heading rapidly towards 25 percent -- a number that would likely make 20 percent of retail property in the UK obsolete.
That's because the stores that remain will need to be bigger and reconfigured, acting as much as showrooms for online products as anything else.
There was a rumor at MAPIC that one fashion retailer is planning to open a store where you cannot buy anything to take away -- the idea being that the store can hold one each of every size of every garment for people to try on.
Then they can buy that garment, have it delivered, and the store isn't filled with too many Extra Larges and not enough of the medium size in the range.
Global agency CBRE published its "How Active Are Retailers in EMEA?" research at MAPIC, and it showed that Internet retailing is regularly used by 69 percent of the population in Sweden, 66 percent in Germany, and 58 percent in the UK.
Eastern Europe is lagging behind, with only 5 percent of the Russian population regularly shopping online and 15 percent of Poles. In Spain the figure is 37 percent, in Italy 38 percent, and in France 56 percent.
But the direction of travel is clear -- Eastern Europe will close the gap on the west soon, but what will the ultimate figure be? Will
100 percent of the developed world's population be regularly shopping online? Tell me what you think and what this means for the future of real estate in our cities.
Re: Changing Face of Retail I watched the whole video - aided by having to be at home to recover from a surgeon's attention - and he's got at least half of it. The other half is the bit we don't know about yet.
Rather than making stock and then having to shift it someone's going to start making it all to order, quickly and efficiently. We already know that the best shopping centres are destinations or tourist attractions. The rest are convenience stores, niche - or empty. Not a message most of the real estate investment community has wanted to hear.
There's always stuff you want to choose in person whether it's a ball gown or a cauliflower. If that shopping experience is fun rather than a drudge you'll buy other stuff too. But for half the stuff i buy now - probably quite a bit more - it works better online. But there's a catch. I work from home a lot and my wife also. Our neighbours do the same and we are gated and CCTVd so delivery is very simple to Chateau Hersom.
Most people need a secure convenient delivery point that's open 24/7 for collections or timed deliveries day and night. While some stores do collections it's only for their own goods and a tour of the neighbourhood at midnight collecting several articles from different places is unappealing. It's coming, it''s got to be.
Re: Changing Face of Retail There's going to be a huge shift because of these expected changes. Clerks might soon find themselves jobless as people go online instead of into the brick and mortar stores. The rumor you mentioned might also become true: the physical stores might instead be turned into showrooms of items that can only be purchased online.
Retailers have to adapt to what's happening to make sure that they or their brand doesn't die out. Evolve. Add online shopping stations in store. Make renovations and offer both online and offline shopping service. The real estate can be converted. It will require time and resources but it can be done.
Disney Predicted this at Epcot decades ago Decades ago I visited Epcot Center when it was first built in Orlando , Fla, U.S.A. As you rode through the ride you saw people buying items from clothes to groceries and having them delievered to there house. Do you think it may be possible that one day everyone will have a printer that prints out products in their home and have the disc with a program on it to print out the desired product. I actually saw that in some Sci-Fi movie and it looks like the technology is here, it is just currently expensive , but that can change.
Changing Face of Retail "In fact, many experts believe the figure is heading rapidly towards 25 percent -- a number that would likely make 20 percent of retail property in the UK obsolete."
These numbers seem incredibly low. I can easily foresee Internet retailing account for 50 percent of retail sales within 10 years, and bottoming out at around 70 percent within 20 years. This is going to make a whole lot more retail property nothing but empty space.
The traditional brick and mortar store is going to have to change to accept this reality. When people take the time to go to a store in the future, it won't be for the convenience - they will want to connect to it somehow on a personal level, and supersized stores don't enable that to happen. For the most part, more and more people will be going to the store for the experience - whether it's to be pampered, find a truly unique specialty item, get ideas, or get some help. Consequently, I don't believe stores will have to be bigger. Rather, I think stores will need to be smaller - a lot smaller. There are many people out there, myself included, who can't stand the thought of wasting gas and time going to a mega store, finding parking, dealing with indifferent store staff that knows almost nothing about the stuff they sell, (that is if you can even find store staff), and spending half a day attempting to locate whatever it is they wish to buy. Apple stores seem to have it right - the right combination of products, size, atmosphere, layout, and smart staff.
Activated Audience Tercek speaks of an "activated audience." He goes on to say there is "re-programming" going on [where this "activated audience" is present]. His use of language is compelling as it strikes me as different from this fundamental dynamic: Retailers have long been active in re-programming consumers. Beginning with Y2K. Amnesia? Many tech folks I was in proximity to [during the days of Y2K] joked how the whole thing was Marketing to the Internet Generation!
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