Every week brings news from the retail world, not all of it positive. Store closings, bankruptcy filings, and the decline in brick and mortar store sales − matched by Amazon’s ever-increasing market share − make headlines routinely these days.

Folks who work in the retail world, building shopping centers, entertainment venues and lifestyle centers could not be blamed if they felt uncertain about where this is all leading. And if you’re of a certain age and grew up in the pre-Internet days of department store catalogs made of real, glossy paper, what do you make of the trouble that rock-solid Sears is in now?

I see two important issues. One is the increasingly important development of online shopping and the other is how physical retail centers maintain relevance. E-commerce figures have been showing double-digit yearly growth for a while now and it’s not slowing. While this presents a challenge for brick and mortar retail, customers are reaping the benefits of a wider array of available products and shipping times as fast as a few hours in some locations.

Sean Selby

Sean Selby

My response is to put some ice in that half-empty cup. Opportunities exist in this evolving world of retail … if we look. But first, we must concede that Pandora’s Box is open, and the Internet has escaped. Consumers have access to zillions more products than can ever be displayed on store shelves and every one of them has been reviewed on multiple websites easily accessed within a few clicks. Second, home delivery provided by retailers is only getting quicker and more reliable, so if there’s no compelling reason for shoppers to enter a physical store, they won’t.

To remain relevant and top of mind, retailers must do three things. First, build excitement in the store and take advantage of what it can do that online cannot. Have real conversations in real time and demonstrate amazing service while letting the customer enjoy the real touch and feel of their products. When the customer is in the store, it’s the shop owner’s chance to tell the story about the offerings: how the wool in a sweater was harvested sustainably, why the bumper crop this year is plums or what the best gift for Mother’s Day is this year.

Second, build experiences. L.L. Bean sells shirts and boots, but it also offers classes in fly-fishing, canoeing and outdoor photography. Warby Parker builds stores that look like libraries and donates a pair of glasses to those in need for every pair they sell. And retail developers would do well to add active experiential environments to their centers, like rock climbing, indoor skydiving, ropes courses, house dancing and bowling. With the projects Arrowstreet is doing in this space, we’re transforming centers and neighborhoods into fun places that mix retail, entertainment and recreation. They’re places where people want to go and spend some time with families and friends

Finally, build with authenticity. For decades, formula has overridden specificity and shopping centers have been built in the same configuration: a large anchor department store with a strip of smaller format chain brands, each looking the same whether in Anchorage or San Antonio. It’s time to change that. Let’s build to suit the community and provide products and services that add value for what is uniquely inherent in that place. It’s a diverse and expansive world so let’s curate and design new centers that celebrate and support those differences. Specificity of place is something that the Internet does not do well, but that is where real people in a real place excel.

We are experiencing a watershed moment in the history of retail. It’s time to seize the opportunities inherent in this evolution, and to open our minds to new possibilities in designing our cities and communities.

Sean Selby is a principal at Boston-based Arrowstreet.

E-Commerce’s Challenges and Opportunities For Retail Industry

by Banker & Tradesman time to read: 3 min
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