by Kevin Coupe
For the last few years, there has been a distinct demographic shift taking place that I've been arguing requires retailers - especially supermarkets - to rethink their approach to location and format.
The construct went like this:
Most supermarkets have been built for customers who got married in their twenties, have 2-3 kids, moved to a house with plenty of room for storage and bought a minivan/SUV.
But the world is changing. People are getting married later and having fewer children. They're opting for a more urban style of living, with less room for storage, and may not even own a car.
How will/should retailers compensate for this shift?
The pandemic, of course, has shot that trend all to hell.
Axios has a story this morning about how "bidding wars, frantic plays for a big suburban house with a pool, buying a property sight unseen - they're all part of Americans' calculus that our lives and lifestyles have been permanently changed by coronavirus and that we'll need more space (indoors and out) for the long term … There's a gold rush in real estate across the U.S., driven by record-low mortgage rates and the dawning realization that for many of us, our homes are going to be the only place we work and play for the foreseeable future."
(Let's stipulate that only part of the population is able to play this game. There are, after all, a lot of people struggling to get by, who barely have enough money to pay the existing rent or mortgage, or who have lost their jobs and have no idea what they are going to do next. It is critical, I think, for those of us who have been lucky enough to keep working and have enough money to pay the bills keep in mind that not everybody has been so fortunate.)
The Axios story makes the point that "while spacious single-family homes in suburbs and exurbs are in hot demand, apartment rents are falling in places like Manhattan, where landlords are offering deals to entice tenants.
"What buyers are looking for: Fresh air, backyards, home offices (for two adults), a homeschooling area, space for pets, home gyms - plus proximity to beaches, lakes, parks and bike paths."
But here's the kicker from the Axios story:
"As more people do their grocery and household shopping online, proximity to retail stores is no longer a real estate priority.
"'We're not hearing as much around brick-and-mortar, where's the closest this-or-that,' Kris Lindahl, CEO of a real estate agency in the Minneapolis-St. Paul area, tells Axios. 'Instead it's 'can we get delivery here?'."
You know. The same kinds of delivery services that they were getting back in the city.
Go figure. People want it all.
I think this is interesting, and may actually show us what the future may look like.
I still believe that retailers need to adjust to these new realities, and figure out where they fit. They cannot ignore the e-commerce acceleration, and cannot just outsource it so they don't have to meet its demands. At least, not if they want to burnish their own brands and value propositions.
They have to think about new offerings that will be relevant to our new reality.
For example, how many retailers have crafted product selections and marketing programs specifically targeted to families where parents are working at home but also dealing with kids who are learning remotely? These are circumstances that may play out a lot more over the coming six to nine months than we'd like, and put specific demands and stresses on families. If I were a retailer, I'd be thinking about this, and trying to figure out to make sure my brand is identified with the solutions that these folks may not even know they're looking for. Yet.
We all have to keep our Eyes Open.
There's something happening here,
What it is ain't exactly clear…
(A personal note. Some of this breaks my heart. I have lived in the same Connecticut home for 36 years, and have been looking forward to moving to a city and enjoying the pleasures of an urban environment. I'm looking out my home office window at the moment at the backyard, where the dogs are wandering around happily, and feel like maybe I got it at least a little wrong. Or that maybe my timing is bad.)