The Future of Retail

HENDERSON HEADLINES THE FUTURE OF RETAIL Authored by: Jason Wollum & John Passantino | December 9, 2020 Like most industries, trends in the retail realm have felt the impact of COVID-19. While the retail industry was already evolving toward omnichannel delivery, the stay-at-home orders, store closing mandates, and the recession brought on during the pandemic accelerated many of these changes. As we look toward 2021, the redefinition of convenience continues to characterize the trends we expect to continue. For the future of retail, thoughtful technology integration and the creative reuse of space will be at the forefront.

TECHNOLOGY ▪ For years we’ve seen the role of technology within the retail sector expanding in a variety of ways. Today, we are seeing an increase in retailers incorporating advanced audio-video and security systems into their spaces. In many cases, the incorporation of security services is centered around business analytics as well as physical security. By using the information gathered from these systems, stores can heat map the customer experience, identifying how they move throughout the store, then adjust merchandising with key items to maximize the flow of shoppers and increase customer interaction.

▪ Incorporating technology in a way that allows for a contactless shopping experience but also drives convenience is leading to the addition of Mobile Point of Sale (MPOS) systems or touch-free checkout. MPOS systems give employees the flexibility to checkout customers in locations throughout the store, eliminating central cash-wraps where long lines could form, supporting both infection control guidelines and customer convenience for speedy service. For truly contactless shopping, some retailers are opting for a touchfree checkout configuration which relies heavily on the presence of technology, curbside pick-up, or delivery.

▪ Another way we’re seeing technology incorporated into retail spaces is in enhanced cleaning processes through the application of systems like UVc and HEPA filtration.

▪ Technology is also being used as a means for brands to interact with their consumers through personal device apps that drive brand loyalty.

CREATIVE REUSE OF SPACE ▪ We expect the retail industry will continue to see an over-abundance of physical space for the foreseeable future. With consumer behavior shifting shopping to online, many retailers see this change as an opportunity to engage customers differently in their stores in a way that emphasizes brand loyalty. We believe we will see an increase in experiential spaces and flagship-style stores that create and strengthen connections between brands and their customers. Flagships have historically been large spaces that engulf shoppers in the brand experience. In the same vein, we expect to see the more “standard” retail store incorporating aspects of the brand experience previously reserved for flagships to drive even greater loyalty.

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▪ With the excess of physical space, we are also starting to see a convergence of many different space types. From workplace to healthcare to retail and mixed use, they’re being blended within the same spaces as developers and mall operators consider new applications within their real estate. These lifestyle centers bring consumers back to the same location for a variety of reasons, creating a convenience epicenter for customers.

▪ The need for a physical location for many retailers shouldn’t be understated though. For brands with an established network of stores, the salesfloor serves a dual-purpose for both in-person shoppers as well as pick-and-pull shelf space for localized, quick-turn distribution.

▪ As in-store and curbside pick-up are becoming a permanent delivery method, the operational requirements for stores are changing. This means retailers need to make modifications to support this need. In many cases, the changes that have been made in 2020 were done quickly to meet a temporary need. However, as this shift seems to be a more permanent change, we expect to see more retailers remodeling spaces to support the pick-up model including space for order storage and integrated technology.

▪ In contrast to the excess of physical retail space, we’re also seeing an immediate need for warehouse space. While some brands are capitalizing on the opportunity to sell directly to their end users, other large, well-known retailers are seeing a drastic increase in demand for online ordering and delivery. As we discussed in our Warehouse Building Systems Design webinar, these once unsophisticated “boxes” are now dynamic facilities with high-tech infrastructure in a rapidly growing industry.

▪ Microshopping, the trend in which consumers are purchasing items on a one-off or as-needed basis rather than making a list to purchase during a regularly shopping trip or order, has continued to grow with the increased acceptance and utilization of online shopping. This has made it more difficult for brands to accurately predict demand. To combat this, storing goods close to a population in order to meet the one or two-day delivery expectations of today’s consumer is imperative. These more localized warehouses also allow retailers to get products to the shelves faster, even if they are not shipping directly to consumers.

Overall, retail is primed for growth in 2021 for the retailers who have figured out the balance of having an integrated omnichannel distribution, a smooth customer interaction, and a dedicated brand loyalty. While the ways in which retailers connect with their customers are changing, we know that an excellent client experience, enhanced by the thoughtful integration of technology, is one of the most powerful things a brand can have, and we’re poised to create environments that make that possible.

JASON WOLLUM PE, LEED AP BD+C Jason is the embodiment of Henderson’s purpose statement: he definitely creates an environment where people can reach their full potential. When he first started at Henderson in 1997, Jason was entrenched in the day-to-day designs of a variety of retail and mixed-use projects, as well as forensic engineering investigations. Through the years, Jason grew into one of our top leaders.

He’s now a senior vice president responsible for the design, management, and coordination of several programs for some of our most important clients. Managing and mentoring our young engineers is what gives Jason even more fulfillment. He enjoys seeing people succeed, whether that is excelling on a complex project, advancing in their careers, or reaching a lifelong goal.

JOHN PASSANTINO LEED AP BD+C With more than two decades at Henderson, John truly embodies our company motto - work hard, play hard, give back. Clients and colleagues alike will tell you he is knowledgeable, charismatic, and fun and the passion he exudes for the people he works with is magnetic. On any given day he can be found with his sleeves rolled up assisting teams with producing consistent quality work across the company for one of his major retail clients, or traveling from coast to coast to ensure each and every one of them know that they matter. As one of Henderson’s specialty retail practice leaders, John will tell you that his favorite part about working at Henderson is getting to connect with so many incredible types of people across the industry and watch them become not only clients or colleagues but most importantly, friends.