Despite all the apocalyptic talk about the demise of brick-and-mortar retail and the fact that 13% of all retail purchases now happen online, 2022 is a great time to have a physical retail location.

In a recent webinar, retail experts backed up that opinion by pointing to shipping problems that continually frustrate consumers, difficult returns, the trend among Direct-to-Consumer (DTC) brands of leasing retail space, and the growing need for healthcare facilities and grocery stores at shopping venues.

“The biggest lesson we’ve learned recently is that physical retail isn’t dead, just bad physical retail is,” explained R.J. Hottovy, Head of Analytical Research at “Now, more than ever, it is incumbent for retailers to meet the changing demands of customers, such as offering pick-up options and offering compelling reasons for the public to visit stores. Digitally native brands have come to the realization that it is extremely difficult to acquire customers using an online presence alone, so brands such as Warby Parker are opening up physical stores to build its brand. The goal is for consumers to walk into a store, linger for a period of time and realize ‘this brand is what I am all about.’”

Frustrated by shipping delays, consumers “are beginning to value the prospect of accessing their goods immediately after the purchase,” Hottovy said. “Wal-Mart and others have improved its logistics and are exploring delivery partnerships, and part of the solution resides in what is taking place at the store level including pick-up.”

“Retail is, and always has been, hyper-competitive and retailers that are not on top of what their customers want and constantly reinventing themselves and the customer experience will not survive,” stated Cailey Locklair, President of the Maryland Retailers Association. “The recent holiday season was among the best on record and, even through the most recent round of omicron, customers demonstrated the willingness to get out of their house and shop. The pandemic did not kill or worsen brick-and-mortar and, if anything, it’s bouncing back.”

“Retailers are uber entrepreneurial and they will do whatever it takes to adapt and adjust to new market conditions.  Savvy landlords are redeveloping vacant blocks of space in once ‘retail-only’ centers into other types, including mixed-use, so that these projects become gathering places to ensure a consistent flow of customer traffic,” explained John Schultz, Senior Vice President and Principal, MacKenzie Retail. “The successful tenant will locate near or within close proximity to these environments to ensure their customers have reason to keep shopping at their physical location. Couple this with an investment in social media awareness, retailers can create a new buzz that will propel them to success with the next generation of customer habits.”

Longer visits increase purchases

Hottovy adds, “Stores are not interested in the one-minute customer visit and looking for ways to elongate the customer stay which, in turn, will translate into higher purchases. Retailers have no control over this when customers shop online, but trained employees and intelligent merchandising can make a significant difference. Retailers across the board have realized that they need physical locations for buying and returning, and are now encouraging customers to drive to its stores.

“Retailers are increasingly wary about the great regression set to occur this year, with sales slipping back to the norm after abnormal activity the past two years, particularly in the home improvements, home furnishings and grocery store categories. Lowe’s Home Improvements experienced a nearly 20% sales increase the past several of years and The Home Depot rose nearly 25%, as driven by increased visitations.”

Healthcare category found its stride during pandemic

2021 proved to be a “tipping point for health-related retail,” Hottovy said. “Pharmacies, such as CVS and Walgreen’s, played a growing role in the lives of customers and the stores realized that when people visited to purchase their COVID-19 test, they would also roam the store and buy six different things. There is a tremendous amount of awareness among healthcare retailers which we do not expect to subside in the near future.”

Retailers encouraged to stay in their lane

“Retailers get in trouble when they deviate away from what they do best while those such as Starbucks Coffee have expanded its brand by creating a third place for customers. Others, like Planet Fitness, realize they have a singular purpose and they know who they are and exactly what its customers want. Those that know how best to serve their customers will thrive,” concluded Hottovy.

“Retailers who provide service to their customers, are the ones that have seen the most success during the pandemic and continue to grow their respective business,” said Rene Daniel, a partner of TD&A. He added that chains such as Nordstrom continue to emphasize their service mantra and that philosophy has brought them continuous sales success. “Service can be emphasized through education of the staff, so that they can be positively rewarded for their effort towards positive sales growth.”