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Q&A Colliers’ Tom Lagos: Death Knell, Changing Retail’s Message

National  + Weekender  | 

By Dennis Kaiser

Retail is not dead. Are you listening shopping mall owners and managers? It might be easy to get caught up in all the dire predictions, negative news or shifting consumer preferences, yet a strong, steady beat still can be heard across the retail landscape. Connect Media asked Colliers International’s Tom Lagos, a veteran of nearly 25 years transacting shopping centers, why he sees a healthy future for the retail industry.

Q: Why do you think the future is bright for malls?

A: There’s a perceived bias that online retailers, such as Amazon, are causing the downfall of brick-and-mortar stores. The reality is that’s simply not true. When you examine the growth in the sector, it is easy to see why retail’s future is promising. And there’s stats to back that up. In 2017, retailers will open 4,000 more stores than it closes. Retail sales this year have increased more than $100 billion over same period the year before, and shopping center operators report tenants are achieving some of the most historic performances ever. Those are all true statements that paint a rosier picture of the retail industry, but this reality runs counter to negative headlines and controversy.

Q: If online sales are increasing, doesn’t that point to a bleak outlook for malls?

A: A closer look at the numbers reveals a more nuanced reality. Online sales only represent about 8.5% of total retail sales and Amazon, as an example, only accounts for less than 5% of total U.S. market share. That means, a lot of money – and opportunity – is still up for grabs, if retailers are willing to pursue new strategies. Certain consumer goods, such as grocers, are performing better with physical locations rather than a pure e-commerce platform. Even in the electronic goods category, which was considered a poster child for the end of brick-and-mortar, there are success stories. Best Buy has experienced an increase in Return on Assets (ROA) reaching 9% in 2017.

Q: How does the retail industry begin to change the perception that it is a dying sector?

A: Changing the reality starts with starting a new conversation about experience, not Internet shopping. To be sure, it is easy to blame the internet for the demise of retail. Yet, upon closer inspection, the cause of so many retail closures likely is tied to the neglect of the customer service aspect. Physical stores really aren’t becoming obsolete, they just may need to attune their focus and adjust strategies around tangible experiences that attract consumers to visit. That means delivering something people can’t get online.

We’re also seeing tenants thrive by making their expertise, guidance, and assistance indispensable. They are successfully cultivating a need to go physically into the store and perhaps even make shopping a desired experience (think resort-type shopping environment). A restructured approach may include using employees as educators, rather than salespeople, and providing hands-on experiences. But an even bigger appeal for shopping malls may be the ability to walk out of the store with the product, which aligns with consumers’ desire for instant gratification.

Tom Lagos is an Executive Vice President with Colliers International.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.