Trend Report For 2018: A Pivotal Time for Brick and Mortar Retail

Possibly not since the first enclosed mall opened in 1956 in Edina, Minnesota, has brick and mortar retail experienced such a pivotal point in its history. Most would attribute the changing retail environment to the effects of e-commerce and the Goliath that is Amazon; however, we believe there are more powerful factors at work.

In-store brick and mortar retail sales accounted for more than 89% of total retail sales in 2016, and early indications seem to point to 2017 being the best holiday shopping season in 4 years. So, if people are still shopping at brick and mortar stores, why do we hear the term “retail apocalypse” every time we turn on CNBC or pick up a Wall Street Journal?

The End Of The Department Store Era—Not Brick And Mortar

What we are seeing is not the demise of brick and mortar retail, but more the end of the department store era. Department-store-anchored malls that sold everything from apparel and electronics to furniture and home appliances dominated the 60’s, 70’s, and 80’s. But specialized big-box retailers have steadily eroded the department store model over the last three decades.

Eventually, we were left with malls anchored by department stores that focused on just a few categories centered on apparel. Does this mean that we will soon see the end of department stores and enclosed malls? Yes and no.

We will continue to see enclosed malls struggle to compete with convenience/grocery-anchored centers, experience-based shopping destinations, open-air lifestyle centers like Bridge Street Town Centre, and local specialty destinations such as The Garage at Clinton Row. Many malls will be able to adapt and survive with the addition of entertainment venues, hotels, and even office space. Others will simply disappear from the landscape to be replaced by a more modern retail and entertainment experience as we are seeing take place at the site of the old Madison Square Mall.

As far as the old department store is concerned, we are already seeing the same type of adaption into a more mixed offering of services and experiences. Many department stores are starting to reduce the size of the sales floor to make room for cafés, salons, pop-up shops, and even fitness concepts. Not all department stores will survive, but the ones that do will be more focused on the high-end specialty categories and customer experience. Instead of existing for exclusively for retail sales, they will provide a total experience and numerous services in one convenient location.

What Does The Future Look Like?

What can consumers expect the retail environment to look like in the future? Currently, the trend is what is called omni-channel retail. This is a combination of brick and mortar stores with online and mobile sales. As evidenced by Amazon’s acquisition of Whole Foods, e-commerce retailers are getting into the physical storefront game. It appears they understand the value of physical storefronts and their impact on the bottom-line. Sure, online shopping is convenient, but does it result in sales?

Research has shown that over 40% of items purchased online are returned. Furthermore, consumers make a purchase at a rate of 20% of the time when they walk into an actual store. That rate drops to 3% when visiting a website. The successful retailer of the future will be able to combine online, mobile/social media, and physical locations to create a positive experience for the customer.

One issue that is flying under the radar is the new tax reform bill and its impact on retailers. A reduction in the corporate tax rate could have a significant influence on the ability of brick and mortar retailers to compete with e-commerce retailers. With the reduction of the corporate tax rate, the savings experienced by the retailers can be used for an investment into omni-channel/mobile platforms, upgrading stores, or simply lowering prices to compete with e-commerce.

A Theme Of Adaptation

In conclusion, we continue to believe that the future is bright for both retailers and landlords. Once again, the theme continues to be adaptation. Traditional retailers are building their online presence and e-commerce retailers are getting into the bricks and mortar game. This environment creates opportunities for landlords that have the vision to meet the changing demands of consumers and the needs of the omni-channel retailer. It’s certainly an interesting time in retail, but one that can bring exciting changes to the benefit of everyone.

 Have questions about the changing retail market? Wondering how you can adapt in 2018? You can contact Zac at zac@crunkletonassociates.com or by calling 256-536-8809.

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Originally from Tennessee, Zac studied business management at Samford University. After moving to Huntsville in 2001, Zac started out his career in banking, wealth management, and financial planning. In 2010 he joined Crunkleton and has since become the VP of Leasing for the commercial real estate group where he focuses on retail leasing and development.

Zac Buckley
VP of Leasing
Crunkleton Commercial Real Estate Group
ZAC@CRUNKLETONASSOCIATES.COM

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New “Williamsburg Plaza” Development Coming To Madison!

Crunkleton Commercial Real Estate Group is proud to announce that a new three-unit development is coming to the corner of Nance Road and Highway 72 near the city of Madison!

The 8,200 square foot “Williamsburg Plaza” is set to begin construction in early 2018 and already has two confirmed tenants—Bank Independent and Aspen Dental.

“We’re very happy to share the news about this location with our customers, neighbors, and friends in Madison County and beyond,” says Macke Mauldin, President of Bank Independent. “We’ve listened to our customers who travel Highway 72 to work or shop in the area and who have asked us to open a sales office here. Our 28th office will bring Bank Independent’s convenient and truly personalized customer service to the Madison community.”

Wesley Crunkleton and Zac Buckley handle the leasing of the project and say the state-of-the-art bank office will be the perfect anchor.

“Williamsburg Plaza will be a great addition to one of Madison’s busiest retail corridors,” said Wesley. “The site’s accessibility and strong visibility make it an ideal location for Bank Independent to serve its clientele with quality customer service. Aspen Dental will also be joining the development, and we look forward to releasing more information on the leasing of this project as it becomes available.”

Although the branch will feature Bank Independent’s signature Colonial Williamsburg exterior, the interior will offer customers modern technology and conveniences, including a tech bar for tablet banking, a deposit ATM, and cash recyclers for more efficient and faster transactions.

The branch will provide the bank’s full range of deposit and lending services with universal bankers, sales officers, and representatives from the business banking and mortgage teams.

Stay tuned as we release the information on the third and final tenant to join Williamsburg Plaza!

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HALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM

The Changing Workplace: Why Offices Are Adapting

The office workplace is an environment that has seen much change over the last decade. From updated technology to construction materials, employers and employees alike have realized the average office space needs to adapt.

Where it used to be

We’ve all been there—the stuffy office space with only a few windows, many walls, and the same color patterns throughout. File cabinets used to be in any area where they would fit. Most employees dealt with sharing space with a personal printer. It left less room for comfort and more room for isolation. But over the years, businesses have seen the value in increasing the quality of the work environment in order to boost morale, attract talented employees, and enhance their bottom line.

Where it is going and why

Colors, windows, noise, collaboration, benching, wellness, and amenities—these are all major topics of discussion in the modern workplace. Many new factors are now being considered during the design and creation of new offices.

  • Color is being used to promote certain moods in specific environments, instead of being selected on personal preferences. For example, blue hues are being used for a calming effect, while bright colors have been shown to improve focus and accuracy.
  • Windows are now being placed in open areas to allow light to flow throughout, instead of in individual offices which traps light. This also gives employees a chance to interact with nature. Even if it is visual interaction from indoors, this perceived contact has a positive impact.
  • Noise is thought about differently in varying environments in order to make tasks more efficient and comfortable. Piping in white noise or music has become a common practice in many work environments.

And then, there is the important focus on office collaboration. The workplace is seeing several different types of collaborative areas to bring employees together.

Some offices have decided to incorporate “benching” to create shared desks and work areas. This can be especially valuable when you have a group of employees that spend a lot of time traveling, or maybe for someone on your team who doesn’t need a permanent workspace. Benching can be used when employees are working on different projects and need to move around the office to work with different groups of people. All in all, the concept of benching has the ability to boost productivity by enhancing office communication and making projects move faster.

Wellness and amenities are also main concerns that bring about many conversations in the planning process. From managing stress levels to retaining talent, businesses are adding incentives within the workplace to encourage and boost their employees. It’s becoming more common to see offices with gyms, social gathering spaces, and more.

How has this affected Huntsville?

Huntsville has already seen some of these changes first hand. As companies re-locate and real estate investors purchase new property, you will notice more and more of this. The construction materials, layout, design, location, amenities, etc., are all just a few qualities that were considered on the following Crunkleton projects:

104 Jefferson Street

The tenants, Prime Lending and KPS Group Architects, are both operating out of a modern workplace and came from very traditional environments.

315 Franklin Street

The first-floor tenant, Haufe, is in and operating.

Stovehouse

This development is in its early stages but has the ability to offer very modern environments.

ADS

ADS, located at Bridgestreet, built an environment their employees could thrive in.

Crunkleton: Commercial Real Estate Group’s Office

We built a space that has flexible workspace in an open and inviting environment.

How can we help?

If you think your office setting could use an upgrade, or if you’re looking for a new space to transform your office into the modern workplace, don’t hesitate to call us at 256-536-8809 to see how we can assist you.

As one of the team’s dedicated office brokers, I will work with you and your team in finding the perfect space to help maximize your company’s full potential.

Have other questions about adapting office spaces? Let us know in the comments below!

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ERIC ST. JOHN
ASSOCIATE
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
ERIC@CRUNKLETONASSOCIATES.COM

Crunkleton Promotes Lauren Plott To Property Manager

Crunkleton Commercial Real Estate is excited to announce that Lauren Plott has been promoted to Property Manager!

In her four years working at Crunkleton, she has served as the Office Manager and assisted with all property management tasks. In her new role, she will continue to build tenant relations by making monthly phone calls with tenants, visiting properties, and working with clients to manage assets.

Lauren Plott Property Manager

“I want our clients to know Crunkleton has their needs in mind and that we are there to make sure problems are solved,” said Lauren. “We aim to go above and beyond as a property management service and create positive connections that help businesses thrive.”

Crunkleton offers full-service property management for all sectors of commercial real estate. Lauren will manage a diverse portfolio consisting of retail, office, medical, and industrial properties and focus on delivering first-class service.

“Crunkleton strives for a high level of professionalism; that carries over to our property management,” said Wesley Crunkleton, Principal. “I’m confident that Lauren will continue to provide quality service and deliver the attention needed to ensure our clients’ assets are being properly managed.”

Lauren volunteering at Lincoln Village Ministry with the Crunkleton team.

When Lauren isn’t busy at Crunkleton, she volunteers her time as a member of the Carillon Club and Valley Presbyterian Church where her husband, William, is the Senior Pastor. She also beams when talking about her three children, Hunter (21), Bradley (18), and Catherine (13). Her free time is spent attending their many activities and enjoying time together as a family.

To learn more about Crunkleton’s Property Management services, click here.

 You can contact Lauren by email at lauren@crunkletonassociates.com, or give her a call at 256-536-8809.

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HALEY CLEMONS
MARKETING COORDINATOR
CRUNKLETON COMMERCIAL REAL ESTATE GROUP
HALEY@CRUNKLETONASSOCIATES.COM