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Patricia M. Johnson & Richard F. Outcalt
Retail Strategists and Retail Turnaround Experts
Co-Founders, The Retail Owners Institute® • Business Strata:G®
No matter what merchandise you sell - whether it's tires, apparel, books, housewares, office supplies, whatever - every retailer has to give the customer what they want.
Right now, customers want “Steak, cheap”, not “cheap steak.”
Customers also are eager to shake off the doom and gloom of the winter. They are more than ready for a fresh new outlook. (Aren’t we all?)
Consider these upcoming calendar events:
The spring ahead to Daylight Savings Time is this weekend.
The “official” March 21 start of spring is just two weeks away.
What a great opportunity for you to welcome a fresh, positive, upbeat Springtime State of Mind!
Combine that fresh attitude with some well-priced promotions – remember, “steak, cheap” – and you have the makings of a fine start to your spring season.
Here are some ideas to get you started.
Tweak your displays. Feature merchandise with lighter/brighter colors. It’s springtime!
Change the soundtrack. Lighter/brighter works here as well.
Wash the windows! Wash away that winter grime. A little sparkle and shine goes a long way.
Check the lights. Make sure none of them are out. Get rid of any dark corners. (And by all means, insure that all spotlights actually shine onto merchandise, not that spot on the floor where the display used to be....)
Bring spring inside Fresh tulips or daffodils at your cash wrap – or better yet, throughout the store – can lighten attitudes and bring a smile for shoppers and staff alike.
It's contagious! It's fun. It's timely. And it’s the perfect opportunity for retailers!
Bring on that Springtime State of Mind!
"Price" versus "Value"
Here is a basic distinction:
Price is what customers pay.
Value is what they receive.
Lots of factors outside your control affect what prices you can offer.
But, the value customers receive? Wow! That is totally up to you! “Here, take this daffodil with our thanks!”
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Remember the three things needed to be successful in retailing - location, location, location?
And remember how that was upended by the internet? (In fact, that's what drove much of the talk of a "retail apocolypse;" it really was a "retail real estate apocolypse." Retailing – selling to the ultimate consumer – still was happening.)
Nevertheless, retail leasing patterns can offer some useful insights to retailers.
For instance, this new study* by JLL Retail Research documents how retail leasing activity has shifted towards experience-based tenants. It notes that 51% of the retail space leased in January–November, 2024 was for service-based tenants. And that trend is expected to accelerate in 2025.
"In 2025, service-based tenants are projected to lease more retail space than goods-based tenants, marking a historic shift in the retail property sector. Key service sectors driving this change include food & beverage (F&B), fitness, and healthcare."
“F&B expansion will continue to come primarily from quick service and fast casual restaurants like McDonald’s, Chipotle, Dunn Brothers Coffee and Potbelly. Active fitness tenants include Alloy Personal Training, Planet Fitness and Club Pilates. Health tenants include urgent care centers, dentists, and opticians.”
In our view, any analysis of a potential store location must include the adjacencies.
That is, what businesses operate nearby that space?
Do they serve and attract a similar customer to yours?
And more important, what are the major traffic generators?
Maybe it’s time to take a fresh look outside your stores.
Who or what are the adjacencies?
How have they changed since you signed your lease?
How might they change this coming year?
Are you seeing an influx of restaurants or coffee shops? Or fitness centers? How about dental offices or medical clinics? Or…? Or…?
The mix and timing of shoppers coming to your area is always changing, as the population in your market changes. But as service businesses increasingly occupy street-front spaces, that will have an impact on your stores.
Now’s the time to get out in front of those changes. Just saying…
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*Food, fun & wellbeing – leasing activity shifts towards experience-based tenants. Keisha Virtue, JLL Retail Research. February 20, 2025.
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