Shopping Center Management: 5 Challenges and Opportunities as Consumers Shift to E-Commerce
As the e-commerce boom reshapes retail, shopping centers in areas such as San Bernardino, Riverside, Los Angeles, Orange and San Diego Counties are navigating a rapidly evolving landscape. The prevalence of next-day shipping is lessening the convenience of visiting certain retail-oriented businesses. This shift presents both challenges and opportunities for property owners and their property managers. By staying proactive and adaptable, shopping centers can continue to thrive in this new era. Here are five key challenges and some resulting opportunities to consider.
Challenge 1: Declining Foot Traffic
Impact: As consumers increasingly shop online, brick-and-mortar stores see reduced foot traffic, leading to potential vacancies and revenue losses for shopping center owners.
Opportunity: Reinvent your shopping center as a mixed-use destination. Integrating retail with dining, entertainment, and even coworking spaces can attract a broader audience. For example, the historic district in Redlands, CA has successfully combined retail with cultural attractions and local restaurants to maintain high visitor engagement.
Challenge 2: Adapting Tenant Mix
The End is Near sticker easily symbolizes the rapid shift in retail toward e-commerce, yet there is still opportunity to innovate and adapt.
Impact: Traditional retail tenants such as your clothing or product retailers may struggle to compete with e-commerce giants, resulting in turnover and an outdated tenant mix.
Opportunity: Focus on tenants that provide experiences e-commerce can’t replicate. Fitness centers, specialty grocers, dining and locally-owned boutiques are great additions. In San Bernardino, the inclusion of local artisan shops in certain centers has proven to be a draw for community-minded shoppers, which helps to attract other retail tenants who recognize the appeal of being next to an anchor tenant. Learn how Realicore's commercial property management services can help you find innovative tenants.
Challenge 3: Rising Expectations for Convenience
Impact: Today’s consumers expect seamless experiences, from parking to payments, and anything less may drive them to purchase online.
Opportunity: Invest in technology to enhance the shopping experience. Mobile apps for easy parking, renting to businesses who offer curbside pickup options, ev car charging stations and in-store navigation can set your shopping center apart. Realicore’s expertise in managing retail properties includes advising on the implementation of such innovations, ensuring both tenants and shoppers enjoy unmatched convenience for their visit. Contact us to see how we integrate technological solutions into our property management processes to streamline the shift to an e-commerce resistant shopping center.
Challenge 4: Competing with E-Commerce Pricing
Impact: Online retailers often offer lower prices due to reduced overhead, making it hard for physical stores to compete.
Opportunity: Highlight unique value propositions, such as personalized service, immediate product availability, and exclusive in-store events. Community-focused events, like farmers' markets held adjacent to retail centers, are excellent examples of creating value beyond price. For example, Tyler Mall in Riverside, CA allows organizations to host farmers markets and other food events in the parking lots during slow seasons to drive additional traffic to their tenants.
Challenge 5: Sustainability Demands
Impact: Consumers and tenants increasingly prioritize environmentally responsible businesses, and shopping centers may face scrutiny over energy usage and waste.
Opportunity: Retrofit your properties with energy-efficient systems, offer recycling programs, and consider green building certifications. Shopping centers that are near dense housing also provide opportunities for customers to walk to their favorite retailers instead of driving. For example, Downtown Ontario in California has implemented a zoning strategy that encourages dense housing near retail buildings by reducing the required parking spaces developers must build. The zoning also requires the developers to implement retail into their mixed-use housing development which further improves the sustainability of shopping locally. These initiatives not only attract eco-conscious tenants but can also lead to operational cost savings. For instance, many shopping centers in the Inland Empire have successfully implemented solar panel installations to reduce energy costs.
How Realicore Can Help
At Realicore Real Estate Group, we understand the unique challenges and opportunities faced by shopping center owners and managers in the Inland Empire and the broader Southern California market. Our client-focused approach ensures tailored solutions that maximize your property’s potential. Whether it’s optimizing your tenant mix or implementing innovative management strategies, Realicore is here to guide you every step of the way. Learn about our tailored solutions for shopping centers.
Contact us today to learn how we can help your shopping center adapt and thrive in the e-commerce era.
