For many, life has evolved post-pandemic. Many more of us are staying home for work and leisure. As a result, foot traffic to retailers has shrunk, and consumer behavior has changed. Enter the rise of mixed-use developments for retail and vibrant community creation.
People want more flexibility in their work and in the way they live, and people who work from home have developed their own kind of culture. They want to tend to their personal errands during the day, work intensely in the morning, have bursts of work throughout the evening and still maintain the flexibility to be spontaneous when they can. To make this new routine work, retailers are showing up in the form of compact building designs creating mixed-use neighborhoods.
And according to the latest consumer confidence survey by The Conference Board, consumers’ assessment of current business conditions improved in the month of April — even as their attitudes about the next six months became less hopeful. Brands must respond to both of these contradictory truths in order to meet community needs. Mixed-used developments might just be the key.
What are the Benefits of Mixed-Use Developments in Today’s Market?
Retail brands have been trying many tactics in an attempt to respond to the shifting retail foot traffic trends. Some have tried closing stores; opening smaller, more intimate storefronts; establishing pop-up stalls and kiosks; and moving into mall locations. But with foot traffic shrinking across brick-and-mortar as a whole, brands need more flexible, multifaceted strategies.
With fewer folks going into commercial office buildings, mixed-use developments are sprouting up to meet consumers in suburban and downtown areas. Forward-thinking retailers can use this retail real estate trend to meet changing consumer demands and benefit their growth strategies.
Mixed-use commercial developments, on the rise in urban and suburban communities, are designed to create diverse communities where people can blend the different parts of their lives: work, play, shopping, working out and childcare. A mixed-use development is the physical embodiment of work-life balance. People are expecting more from these commercial spaces, including social connection and community. Mixed-use building types combine residential spaces with retail centers; entertainment venues; public amenities, such as green spaces, parks, and transit centers; and industrial-use buildings.
Retailers that embrace retail real estate trends will be more likely to evolve to meet consumers’ changing needs. Use mixed-use developments to build a community around your brand, enhance and elevate the customer experience, and position your brand in close proximity to others that serve a similar customer profile. In this way, your brand can benefit from everything else going on around it, without investing extra funds in brand development.
Mixed-use areas aren’t just good for brands searching for new growth strategies; they’re good for the well-being of our communities and populations. They foster local community spirit, they’re more sustainable because they cut down on unnecessary journeys and they make brick-and-mortar retail more affordable.
How can Retailers Take Advantage of Mixed-Use Developments?
Retailers can use mixed-use commercial developments to grow their real estate footprints without sacrificing financial stability. You can grow your brand affordably and sustainably while bringing consumers along with you in a way that suits them. Here are our top tips on how to execute a mixed-use development strategy:
1. Adopt a cluster retail model.
A cluster model means taking advantage of neighboring brand experiences to create a surrounding, immersive and impressive journey for customers. The cluster model helps brands respond nimbly to customers who want seamless transitions from leisure to work to grocery shopping to the gym.
2. Follow local design and aesthetics.
A mixed-use development strategy won’t work as well if you’re following your own style exclusively and not incorporating the design features and aesthetics you find around you. Retailers should take inspiration from the communities they’re trying to join. This will connect your brand to others and make the customer experience more satisfying.
3. Empower your employees’ work-life balance.
Committing to a mixed-use development strategy is about more than just getting eyes on your products. It should be a way of life, a set of values that your brand espouses. For that reason, leaders should aim to help their employees live in a way that belongs in a dynamic retail environment. Empower employees to work and play flexibly, join in with neighborhood events and form relationships in the community. In return, team members who are involved in the community will help create a better customer experience.
When foot traffic is low and you’re desperately trying to find a brick-and-mortar retail strategy that suits your brand, consider how mixed-use developments could tap into higher-density communities and bring you back to life. Both commercial and residential developments are getting mixed-use zoning approvals and undergoing new construction that incorporates environmental design, community development and smart growth initiatives. You have an opportunity to connect with these communities, and by showing that your brand understands how consumers are feeling and behaving in this new work-life territory, you will bring them back into your store.
Matt Giffune is a Co-founder at Occupier, a lease management software platform helping commercial tenants and brokers manage their real estate footprint and comply with lease accounting standards. Occupier’s software helps teams make smarter, more informed lease decisions by centralizing the way they work. In turn, teams ensure alignment between their real estate decisions and business successes. Prior to his work at Occupier, Giffune held leadership positions within commercial real estate and technology sales. He’s currently based in Boston.