Few industries have received as much attention as retail over the last decade. Declarations from countless outlets land all over the spectrum as to the health and future of the in-person shopping experience. For Rebecca Fitts, AVP of Real Estate at Leap, navigating brands through today’s retail environment is an exciting challenge.
Fitts’ interest in retail drove her on a career path in leading the defining and redefining all aspects of retail brands from their marketing to physical real estate management. With a look back at how retail management has shifted over the last decade-plus, the role of technology, and what drives value in retail spaces for brands, Rebecca Fitts lays out her insightful perspective on retail growth and the future of commercial real estate.
Here are five questions from a recent podcast appearance that gives her insight on how brands can create a valuable retail experience today.
How do you think retail development looks different today than it did 10 years ago?
One, I think we've gotten a lot better. And it's funny, I think if you'd asked me this 10 years ago, I would have said, we won't say omni channel anymore. We're still saying omni channel, but I think it means something different. I do think that we've gotten good as an industry in using our stores for all that they can be used for and being creative and thoughtful.
I also think there was this idea, which is kind of old school but new school. If you think about a person who has one store, that is their career. That's their living, they probably are not thinking that much about ‘how do I meet my customer where they are?’ But boy, that really got leveraged up.
I also thought, maybe 10 years from now, when we were talking about how important customer experience was we'd solve it, and then we'd be on our merry way. But what does that mean to each of these brands? So, if anything, has it gotten better?
It's an interesting discussion on whether technology has made it easier or harder. And I think you're always thinking about that. Something's going wrong on your phone that was intended to make your life more convenient, and it's not actually working. I think there's some of that as well. I'm very hopeful that the technology is helping from the real estate side making it go a little quicker for a traditional industry.
Do you feel like we've kind of hit a little bit of a saturation point with tech?
I do think maybe there is some. When there was just one traffic counter, it could have been the little person outside doing the clicks. We've come a long way from there. And now you have choices.
So, how do you want to measure traffic? How much does foot traffic really mean to you is dependent on a brand. Now there are a bunch of folks in the space that you can go and look at and hopefully choose carefully. Just take a real estate example. Some of the prop tech things you can do from basic lease admin and tracking. There is now a big pool. So how do you want to use it?
And then I think we’re probably to the point where you're thinking everything's going to be easy. I'm going to plug in my phone, it's going to tell me where to go and the technology doesn't work. Can you get the implementation right? Certainly, it's a partnership between the technology folks and the store. But those friction points are where I'm at least hearing about them today.
How have landlord and tenant relations changed in the last few years?
I say this a lot. But it's an evolution, not a revolution. We've come really a long way. And I think there are a couple of things that have happened.
One, it's been a conversation that's been going on for a long time. And when you think about tenants and landlords, they really shouldn't be at odds with each other because they're both going for the same goal in many ways—let's get a store open, and let's both start making money. But somehow things fall apart as you're moving through this. So I do think landlords now see the value of shorter leases.
I think tenants and landlords have both played the game. How short can we get a lease? Should we be making license agreements? How can we get better, and how can we make this flywheel easier, well-greased and spin faster?
Then part of that is also the relationship which Leap is really key on. We refer to landlords as partners, not only internally but right to them. We're coming to fill a space. Our superpower is rebranding. It's to our benefit and your benefit. Let's get brands up and running as quickly as possible, and then let's both make sure that they're doing really well.
I think both sides have really gotten a lot better coming together on design and construction. You're hearing a ton of landlords these days saying, I really want the brands to come. If I white box it, will they come? And that really is happening, and they are.
How do you define in the initial setup what's going to win in a retail space?
Sure. And I should say, CapEx can be the enemy. I think we should openly talk about that. And it's not that we don't want beautiful stores, because that's part of a great customer experience, but really being thoughtful about that. Listen, I'm the first person to walk in a store that shiny and sparkly and be like, spread my ashes here, this is it! But be thoughtful about that. So that's one of the things we look at.
Then site selection is really important for our customers. Our core product is probably a store that is Main and Main—it's either on a major retail corridor or it's in a mall on center corridor. You know what you're getting, but then we've taken it and we've done some interesting things. As far as this isn't our core product, it is a destination store. We want to be clear; you're going to get a lot of eyeballs, but this might not be the store where your P&L is showing up as a high-volume store.
Just being really clear and defining those, I think it makes it easier for our customer. We haven't done this yet. But I think there's real value in a neighborhood store, Warby (Parker) did a lot of these in the beginning. They took a little time to kind of come into their own but boy, when they did, a neighborhood store has value as well.
We're also playing around with seasonality as a product. Which I'm loving because it's very interesting. It's not just doing a six-month pop-up because you're a flip flop brand, but you're buying the space for two seasons or more, if you want. Then maybe ski jackets are buying the space for the other half. If I ran a swimsuit business and someone offered me that, and I was able to lock in the same great space two or three times, it sounds like a dream.
What is one piece of advice you would offer to any person who is looking to establish a new retail space today?
Know why you're doing a physical store. So, it goes back to the why. Why are you doing this?
Then number two is that the location feeds into that. I don't want to say it's all foot traffic, I hear great feedback every day on spaces that ended up turning into great things. I had a cashmere company, and they said, "We weren't really totally sure. We didn't think it was right.” We were in Florida, and we took them to a mall space that happened to be near the movie theater. Everybody is going into the movie theater and freezing then coming out and buying cashmere or buying cashmere on the way in. ‘Hey, I forgot my socks’ or ‘I want a little wrap.’ They ended up doing really well. I don't know if it became part of their strategy, but I think that there are always these interesting tales where it wasn't just Main and Main and foot traffic is off the chart, because the foot traffic has got to stop for you.
Interested in hearing more from Rebecca? For the full conversation, check out the podcast!