The Awards season is here, and who doesn’t love regaling the glitz and glamor of Hollywood’s brightest stars dressed to the nines? And while the silver screen is the season’s star, we’d like to turn your attention to an industry that deserves its moment in the spotlight: Retail.

Let’s indulge in the whimsy of Retail’s accomplishments, stepping onto the red carpet to claim its well-deserved accolades for its extraordinary distinction in Lifetime Achievement.

Retail’s achievements are a testament to their resilience. Over the last three years, Retail openings have outpaced store closures, and absorption has surpassed newly delivered retail supply. Additionally, the Treasury Department reported that wages grew faster than consumer prices, meaning Americans had more money to spend in 2023. Despite facing numerous challenges, from economic downturns to technological disruptions and global pandemics, Retail has demonstrated remarkable adaptability and perseverance.  

Best Breakthrough Technology: Omnichannel

Omnichannel technology emerged as a game-changer for Retail, revolutionizing how consumers interact with brands and purchases. By seamlessly integrating various channels such as online platforms, mobile apps, social media, and physical stores, omnichannel retailing offers customers a cohesive and personalized shopping experience. Retailers retain 89% of their customers when using an omnichannel strategy. Those who ignore omnichannel in their plans risk losing a significant portion of their customer base, upwards of about 10% of revenue.

Engaging customers through multiple integrated digital and physical touchpoints allows Retail to connect with consumers on a whole new level, allowing them to research products and purchase on their preferred platforms. Furthermore, omnichannel strategies allow retailers to leverage data analytics to gain insights into consumer behavior, enabling them to deliver targeted marketing campaigns and personalized recommendations. By 2025, we estimate that a physical location will fulfill 30.5% of all digital transactions.

Best Supporting Sector: Industrial

The demand for industrial space continues to surge as retailers embrace omnichannel approaches, necessitating facilities that support seamless integration between online and offline operations. The rapid acceleration of e-commerce, supply chain reorganizations, and 3PL requirements catalyzed the unprecedented push for industrial space over the past two and a half years. Revenue from e-commerce, accelerated by the pandemic in 2020, has since returned to its trend line, representing 15.4% of all retail sales. By 2027, it’s projected that e-commerce will grow to more than 20% of retail sales, increasing by over 1% annually. This growth will result in continued demand for industrial distribution space, both large-scale distribution centers and smaller last-mile facilities.

Best Investment: Grocery-Anchored Retail

Grocery-anchored centers emerged as a pandemic-era bright spot for Retail and continue to outperform other retail formats, benefiting from higher occupancy and lower tenant rollover. In 2021, U.S. grocery-anchored retail property sales held the largest share of any retail property type for the third consecutive year and the second highest in recorded history. Essential destinations for everyday needs, these centers benefit from consistent foot traffic, providing a reliable source of income even during economic downturns. The U.S. grocery store margins reached $675 billion in sales last year, with online grocery sales only a fraction of the industry’s sales. Several grocers have announced expansion plans, including Aldi, Costco, H-E-B, H Mart, Sprouts Farmers Market, and Wegmans. The combination of diversification and sustained demand positions grocery-anchored shopping centers as a compelling value proposition for investors in the retail real estate market.

Best Partnership: Office and Retail

In an ever-evolving commercial landscape, the symbiotic relationship between the office and retail sectors is critical in driving long-term growth. Reduced foot traffic has significantly affected the office and retail sectors. CoStar Analytics reports a substantial 36% decline in retail tenant move-ins within office buildings since 2019.

Revitalizing a neighborhood, especially the central business district, necessitates collaboration among office and retail landlords, tenants, and city officials, acknowledging regulatory obstacles and rethinking traditional zoning to create a vibrant environment for diverse businesses. Repurposing vacant office buildings into residences can address the demand for affordable housing while enhancing livability. Landlords should shift their focus from individual lease agreements to collective benefits, bridging communication gaps between stakeholders and aligning interests across sectors to create a cohesive urban environment and sustain long-term growth.

While acknowledging the past triumphs, let’s remember the exciting possibilities for Retail. With continued advancements in technology, a focus on sustainability, and a commitment to evolving alongside consumer needs, the future of Retail promises innovation, resilience, and continued service as a cornerstone of our communities.