Safe Shopping – What Does It Mean for Retail Landlords?

As summer beckons and COVID vaccines roll out, hopes of returning to our pre-pandemic lifestyles are budding. And after being cooped up for a year, the idea of physically shopping for a new summer wardrobe may seem like a well-deserved indulgence. While many will still need to watch their pennies, in-person retail recovery is in the cards.

But the change is not going to happen overnight, and shopping is unlikely to look the same as it did in 2019. The pandemic accelerated the switch to online shopping, and 79 percent of Americans say they will continue to shop online. Meanwhile, those willing to return to the malls will have a heightened awareness of personal space and health and safety measures.

So how will returning shoppers react to their favorite malls being filled with empty store-fronts? Can cash-strapped landlords and tenants rise to the occasion one last time to welcome shoppers back?

Flexibility Is Core to Future Retail Design

Retail, design, and construction experts agree that flexibility must be built into any retail space changes. Shoppers will be looking for new experiences, and nobody knows what those are yet. And the coronavirus (or something similar) could rear its head again; we can’t be sure the current vaccines will serve as protection against future variants. If nothing else, shoppers will need to feel psychologically safe for a while to come.

Places of Purpose

The National Retail Federation (NRF) predicts that retailers may need to adapt themselves to become “places of purpose.” Contrary to pre-pandemic efforts that encourage shoppers to come and browse, shoppers may demand a quick in and quick out.

The year 2020 initiated a phenomenon being tagged Online Merging with Offline (OMO), which sees shoppers blending online activity with in-person acquisition. They may look at options online, check for stock of their size, go in-store to fit items, and take them home that day. As opposed to the multiple online transactions spread over days required to get the “right fit.”

A More Personal Experience

The other thing people miss from the online shopping experience is engaging with helpful and knowledgeable store assistants. The NRF suggests retailers encourage shopping appointments. Shoppers could time with an assistant who attends to their wishes and presents options to them in the safety of a private, reserved space.

Even without appointment scheduling, it makes sense to free up floor space (for social distancing) by putting just a single item on display. Shoppers could then request their choice of color and size. Clothing can be appropriately wrapped and sanitized after each fitting. 

Store layout designers will need to rethink the ratios of storage to display area and allow for private viewing and fitting areas.

Smaller Shops May Receive Preference

Some shoppers may prefer to exchange variety for safety (or perceived safety). Small stores that allow shoppers to quickly assess the controls in place and speedily make their choices from a limited selection have received preference. It could be the final nail in the coffin for department stores that were already on the decline pre-pandemic.

The trend could suit landlords, too, as they can spread their risk across multiple niche tenants rather than a few large anchor tenants. It also opens opportunities for start-up local businesses that might not usually bid on premier class mall space. And gives small online businesses a chance to put their goods in front of passersby.

One-Way Aisles, Transition Spaces, and Outdoor Space

Many stores are introducing one-way aisles as a way to control social distancing. At the same time, store entrances are becoming transition spaces that provide shoppers the psychological safety of conspicuous health and safety measures. As such, they offer opportunities for branding and the creation of unique experiences—for example, consumers may watch a video while their cart is being sanitized.

In climates that allow for it, shopping is extending into outdoor spaces previously reserved for eateries. Making such areas pet and child-friendly could see families safely viewing malls as destinations once again.

Curbside Pickups Remain

With most consumers expressing contentment with online shopping, the hastily erected curbside pick-up areas constructed last year can be upgraded and extended. Again, look to underutilized parking that provides cover and branding opportunities.

Turnover Rent Can Increase Collaboration between Landlords and Tenants

Finally, turnover rents, usually calculated as an agreed percentage of the tenant’s turnover and other receivables, are gaining popularity in the retail space. The concept isn’t new, but now more than ever, landlords need to be flexible. Insisting on fixed rents in uncertain times may put off prospective tenants. Or could force existing ones to shut up shop if retail recovery doesn’t go according to plan.

Turnover rent arrangements create a symbiotic relationship between landlords and tenants. When times are good, everyone does well, and when times are bad, there’s an incentive to work together on improvements.