With in-person shopping at a low in 2020, the industry has finally started seeing a comeback. In both 2021 and 2022, brick-and-mortar retail sales saw a huge jump, and many experts believe this will continue into 2023.

Though high interest rates, rising inflation, and labor shortages loom over many industries, increased construction costs and limited building space ensure that retail and other commercial building projects will remain stable in the coming year.

As our economy continues to recover and adjust, we’re looking at unique opportunities investors can take advantage of in the ever-changing commercial real estate market.

Keep reading to learn about our top commercial real estate opportunities that all CRE investors should consider in 2023 and beyond!

An Increase in Redevelopment Projects

Redevelopment projects are ideal investments due to their low carbon footprint, high ESG ratings, existing reputation with consumers, and low building costs.

Because new construction projects are continuing to get more expensive, we’ll see more retail developers and commercial real estate investors focus on redeveloping existing retail spaces. This will help attract new customers and shoppers but is also an excellent opportunity for investors.

Think about a new apartment in an old building — all of the amenities, appliances, and systems are brand new, but the building still has its existing charm. This — and the low cost of renovations compared to a new building project — makes many redevelopment projects so desirable.

As rent levels continue to increase and occupancy levels increase even more, there will be plenty of demand for redevelopment projects, especially in highly populated areas. Many redevelopment projects will see buildings converted for other uses, such as office buildings, apartments, and other industrial projects.

The Evolution of Grocery Stores

Grocery stores will continue to evolve for consumer needs. 

The sale of food and beverages on digital platforms like Amazon Grocery, Doordash, and Uber Eats has continued to rise. Still, most of these orders are fulfilled at the grocery store using a delivery service or curbside pickup. To continue evolving with the times, grocery stores must transform to fit our multi-channel world.

This could include extending partnerships to more delivery services or developing their own delivery services to compete with the top food delivery companies. But no matter how much of the grocery shopping process becomes digital, there will always be a need for brick-and-mortar grocery stores due to the nature of the product.

However, as grocery stores become less reliant on employees (see our McDonald’s example below), operating costs will also lower — making them a less intensive CRE investment.

Quick Service Restaurants & Fast Food Chains

Similarly to grocery stores, quick-service restaurants and fast-food chains will also continue to see an evolution in their services which will significantly impact how investors view them.

While these restaurants won’t necessarily need to develop their own delivery services, we’ve already seen how chains like McDonald’s have introduced robots into their operations. These automated employees are leased at a lower monthly price than the average employee, leading to lower operating costs and making them more attractive to investors.

Your Commercial Real Estate Investment Resource

Each of our commercial real estate clients at Brisky Net Lease receives exemplary guidance on their commercial real estate and triple-net lease ventures — staying supported throughout the entire process. 

We’re with you through each step of your lease, sale, or purchase and strive to make the experience efficient and seamless! 

If you’re ready to get started on your commercial real estate journey, get in touch with our team to get started or check out our site for more information on our services.

In an increasingly digital world, in-person purchases are still the bedrock of retail. Before the rise of the Internet, most of us made non-business purchases in places like malls, warehouse clubs, discount chains, local businesses, and mom-and-pop shops.

The most important thing these establishments share (and what’s kept them around for so long) is a focus on the customer experience or making guests feel welcome and special. In 2021, over forty-eight percent of worldwide businesses identified high customer involvement as a critical factor in the customer’s experience.

But what makes a shopping experience an experience?

Customer Engagement — What Is It?

In its simplest form, customer engagement is how companies actively include clients in their operations. Customers are more likely to complete a purchase if their preferences and well-being are considered throughout their shopping experience. New technology allows retailers to connect with clients using targeted information across multiple channels, whether that’s virtually or physically.

Customer engagement is a large part of keeping retail stores relevant in the digital age. While an individualized approach to customer service can help brick-and-mortar locations stand out from the online competition, it’s really the method that makes a difference.

What Is Experiential Retail?

The main goal of experiential retail is to give your customers an unforgettable in-store experience. You can achieve this in many ways, but it must take place in a physical store — showing off cutting-edge technology, hosting exclusive in-store services or events, and having employees educate customers about your products and services are just a few examples.

Experiential retail is a great way to bring in new customers (and keep loyal ones coming back) because it encourages them to interact with your brand directly instead of passively, like online browsing. For this to work, your in-store experiences must stand out from the competition, but it can’t be purely promotional — the overarching goal for both you and your customers is to complete a purchase.

Advantages of Using Experiential Retail

Experiential retail helps brick-and-mortar stores build a loyal customer base, but how is it actually better for business? According to recent research, brands that prioritize engagement and personalization in their physical shopping experience see a 6-10% rise in revenue three times as quickly as brands that don’t.

Plus, in 2022, the number of people visiting experiential locations like bars, retail stores, and entertainment venues rose by 40%, making it the perfect time to add individualized, interactive features to your customer’s shopping experience.

Here’s why (and how) stores use experiential retail to deliver memorable customer experiences:

It Motivates Customers to Stick With Your Brand

Your business should offer a pleasant outing in exchange for the customer’s time and money, and one of the simplest ways to do this is show expertise on your product or service.

Instructing customers how to use and maintain a product after taking it home shows you know and care about what you’re selling. That way, when clients need to buy an identical or similar product at another time, they’ll feel confident coming back to your business.

It Encourages Interpersonal Interactions

People frequently discuss shopping recommendations in their social circles, and sharing content or reviews about businesses online is now extremely common. This creates a virtuous cycle of experiential marketing that encourages word-of-mouth advertising. As satisfied customers tell their friends about positive shopping experiences, others will learn about your business and keep spreading the word.

It Allows You to Gather Immediate Feedback

With offline promotional events, businesses can collect time-sensitive information and direct responses from their target audience. When customers physically use products and services at a store or pop-up, businesses can conduct real-time surveys to gather information for future product development. Plus, you can send targeted email campaigns after a customer’s visit to inform them of upcoming events or featured products.

Experiential Retail Successes

There are many ways to create a unique customer experience, and while the concept isn’t entirely new, stores have ramped up experiential retail efforts since the pandemic. The following brands are great examples of how a physical retail store can become a consumer destination.

Nike

Nike’s five-story, 55,000-square-foot flagship store in SoHo, New York, has nearly as many interactive features as they do inventory. Whether you want to virtually race famous athletes, try out a new pair of shoes before buying, or learn more about the materials used in their products, Nike thought of it all.

A few of the store’s features include

• A basketball half-court with adjustable hoops and digital screens
• A shoe customization bar where customers can design and order a custom pair of shoes
• Large, wall-embedded touchscreens where customers can search inventory or learn more about Nike products
• A treadmill in front of a jumbotron that simulates outdoor runs

Ikea

If you’ve been to Ikea, you already know each trip is a full-blown experience, but you might not know that Ikea is also a master at localization. Before opening a new store, Ikea does thorough research in the area they’re targeting by visiting local consumers’ homes and asking which goods they’re interested in purchasing. This allows them to personalize each location’s shopping experience while encouraging in-person purchases.

A few featured experiences Ikea stores have to offer are

• An in-store restaurant with culturally-diverse food options
• Full-room layouts customers can immerse themselves in
• A shop-as-you-go structure where customers don’t physically put items into a cart until they reach the warehouse at the end of the store

First Things First: Find the Perfect Location

Experiential retail and physical stores will always be a part of how we shop. If you’re looking to become a brick-and-mortar business owner, Brisky Net Lease can help you navigate the CRE landscape and will support you throughout the entire investment process. If you’re ready to get started, get in touch with our team!