Early signs for the retail industry are already showing indicators of what may be to come in 2022 for commercial real estate. From a decrease in store closures across retail (down 65% compared to last year) to an increase in store openings (up 3% from last year), there is a lot to look forward to, and hopefully, these trends will continue, bolstered by strong consumer demand.
Here are just a few of the trends to watch in 2022 in retail and commercial real estate:
Better Relationships Between Companies & Their Workforce
Finding workers in the past year was difficult for many retailers – from warehouse workers to floor workers to delivery drivers – however, this has pushed for better relationships, communication, and benefits from many companies to their workforce.
Though higher wages are helpful and a good draw for many workers, improving the company’s overall connection with the faces and hands of the business has shown to often be the difference between understaffing and a smooth schedule.
If finding labor continues to be difficult, then many retailers may need to find additional perks and creative solutions to bring in workers – or to find new locations and solutions that have better automation or technology for serving customers with fewer workers.
More Investment & Expansion of Supply Chains
As the last year has clearly shown, supply chain disruptions can have a huge impact on businesses, profits, and commerce in general. From labor shortages to demand surges and other unforeseen variables, many retailers had a difficult time keeping up with their shelves and their customers’ needs.
Even the simple movement of items came to a standstill multiple times in 2021, though that congestion is expected to continue to lessen throughout 2022.
The problems of last year gave insight for this year and beyond, meaning many companies are re-evaluating and considering investment into supply chains to strengthen them and find more efficient ways to avoid future breakdowns. This will most likely look like an upgrade to technology, which goes hand-in-hand with multiple trends, and possibly an increase in logistics companies – both brick and mortar and online.
Evolving Experiences & Locations
eCommerce is still growing, and many of the ‘traditional’ department stores are still declining, however, some largely physical retailers have found ways around this – namely, involving experiences and smaller locations that cater to specific needs and neighborhoods.
As mentioned, closures are dropping, and new store openings are increasing, which is great for retail and commercial real estate industries alike. Many retailers are also rethinking their store layouts, styles, experiences, and locations. Opting for smaller, neighborhood-centric locations instead of big box stores.
Additionally, with so many new store locations opening – dollar stores leading this front – there is a move toward revitalizing brands that have previously been in decline, instead of closing them down. This means that both real estate and construction may be in for beneficial surges depending on the locations chosen for the thousands of new stores with plans for grand openings, relocations, and renovations.
Retailers Are Branching Out from Being Strictly ‘Retail’
Many retailers are offering business-to-business services, delivery services, even resale-as-a-service in addition to traditional retail services.
One great example is Amazon, which has begun to sell its cashier-less tech to other retailers, so customers can check themselves out without waiting, lines, or contact with workers – which during a pandemic is a large draw for many.
This kind of technology can help customers but also speed, and assist the overwhelmed workforce if implemented correctly and efficiently.
Apparel May Be Making its Long-Awaited Comeback in Commercial Real Estate
Apparel has been falling for years, however, 2021 saw a large increase in revenue – $13.3 million more than 2019, nearly 10%!
Holidays always see a surge in apparel sales, however, this trend doesn’t seem to be changing quickly, though a gradual decline after the holidays season is expected. Many retailers kept their prices consistent through the holidays, however, some cut big deals to lure more customers, which could hurt them over the remainder of the year.
This means there may be additional movement from large commercial real estate properties to smaller but more numerous locations, such as strip malls instead of megamalls.
Make the Move into Commercial Real Estate & NNN Investment
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Brisky Net Lease is an industry expert in every aspect of NNN properties for investment, retail, and commercial real estate. If you are interested in investing in NNN properties, contact our friendly team of knowledgeable experts. Our team would be happy to answer your questions and provide you with options.