The retail real estate sector has been undergoing a fundamental transformation in the past decade, driven primarily by the explosive growth of e-commerce and shifting consumer behavior. In order to remain relevant, traditional retail properties must adapt to new realities. With consumer attitudes ongoing to evolve, integrating technology into the design, management, and operation of retail properties is no longer an option—it’s a necessity. According to Dov Hertz, a famous real estate developer and founder of DH Property Holdings, retail real estate must become tech-savvy if it hopes not only to survive but also prosper in the present era.
The Role of E-Commerce in Retail Real Estate
E-commerce has revolutionized the retail world, and now consumers are able to purchase nearly anything, anywhere, at any time. This has led to a diversion of traffic, with consumers opting for the ease of online shopping over going to stores. For the conventional brick-and-mortar stores, this has led to a reevaluation of the function of the physical store.
Retail real estate is no longer all about foot traffic—it’s about building experiences and incorporating technology to capture today’s consumer demand,” says Dov Hertz. “The successful stores are those that use technology to make the in-store experience better, provide convenience, and make operations more efficient.”.
As online shopping becomes increasingly prevalent, stores are trying to merge the physical and virtual worlds. This can vary from offering “click-and-collect” facilities, where people shop online and pick up in the store, to in-store technology experiences like virtual fitting rooms or kiosks.
To compete in a digital-first world, brick-and-mortar stores must concentrate on creating great, memorable in-store experiences. Technology is the key to making this happen. Virtual reality (VR) shopping experiences and interactive screens, automated checkout, and augmented reality (AR) features are just a few examples of how technology-enabled store environments are transforming the way consumers engage with brands.
“Consumers today are looking for more than products; they’re looking for an experience,” Hertz explains. “Those retailers who embrace innovation can build lively, personalized, and integrated experiences that drive traffic and loyalty.”
For example, AR-based solutions allow shoppers to test apparel virtually, or even view what furniture would fit in their living rooms. Mobile apps and digital kiosks can assist shoppers in discovering products, comparing prices, and receiving personal recommendations. These solutions create an enjoyable shopping experience that combines entertainment and convenience.
Simplifying Operations with Smarter Retail Technology
In addition to improving the customer experience, technology also allows retail operators to automate their back-end operations, making them more efficient and cost-saving.
“Smart technology is changing the way retailers manage inventory, track customer behavior, and merchandise stores,” Hertz says. “The more data you can collect and analyze, the better you are at making real-time decisions that are good for the business and the consumer.”.
IoT-based intelligent inventory management solutions can monitor the inventory of products automatically and re-stock the shelves when they fall below a predetermined level, eliminating out-of-stock situations. Furthermore, data analysis can offer valuable insights into buying behavior, enabling retailers to make their merchandise, pricing, and store layout fit the requirements of the consumers.
Omnichannel Retail: The Imperative of Integration
As shoppers become ever more likely to buy from multiple channels—digital, physical, and mobile—retailers need to make sure that their offline and online stores are presented under a single unified face. Omnichannel retailing allows shoppers to have the same seamless and consistent shopping experience irrespective of the platform they use.
“Omnichannel retail is the answer to today’s retail real estate,” Hertz asserts. “To compete, retailers need to offer a seamless experience between the physical and digital worlds—whether a consumer is shopping online, purchasing on mobile, or in-store.”
This convergence can take the form of introducing mobile apps with customized discounts and product suggestions or using store innovation to enhance a customer’s digital ordering and fulfillment experience. For real estate owners who operate retail businesses, this means creating space to enable these omnichannel functions and preserve the room for future innovation.
The Future of Retail Real Estate
The future of retail real estate lies in its ability to adapt to shifting consumer preferences and technological innovation. As more and more retailers embrace e-commerce and omnichannel strategies, physical stores need to shift from being transactional spaces to experience centers, brand interaction, and customized services.
“Retail property must think outside the conventional shopping store or mall model,” Dov Hertz summarizes. “It’s about providing flexible space where technology optimizes the consumer experience as much as the business efficiency. Those that don’t transition do so at their peril.”
In order to survive in a rapidly changing retail environment, developers and retailers alike must prioritize flexibility, innovation, and technology. Through the incorporation of technology-forward solutions into the design, operation, and management of retail properties, the industry can not only survive but thrive amidst ongoing disruption.
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Dov Hertz of DH Property Holdings Interview on NEREJ