During the Locatus Summer Class, the dynamics of the current retail market were discussed extensively. Conclusion: dark clouds gather over the retail market. Gertjan Slob ended his presentation with a personal example. “This was once my parents’ shop, now there are office buildings and no one is missing this shop anymore…”
We are seeing an irreversible change in buying and selling behaviour. And by we I mean everyone. All you have to do is look back at what you bought last month and you’ll find a telling example.
Take last week: I really tried to buy a protective case for my iPad in store. I was in town and wanted to see what the case actually looked like. One store (I won’t mention a name) had barely anything to choose from. The other store I went to only had one (damaged) sleeve in the colour and design to my liking. So I had to resort to the internet. Next time I will probably order it in a webshop directly. I can always return it if I don’t like it.
My kids won’t even try to buy it in store. And that’s probably why the supply and stock in the shops is so limited. The shops notice that this product is usually ordered online, and they adjust their assortment accordingly. That’s why I can’t find what I’m looking for and… order it online.
We’ve gotten into a visual circle. There are fewer and fewer reasons to go into town. So consequently, there is less footfall in the streets. If there are fewer people walking by, less will be bought, the offer will be impoverished and more and more shops will disappear. And thus there will also be more vacancy. Which means that there are even fewer reasons to go into town, etc…
And, in turn, less demand for shops also results in lower rents and a decline in the value of retail properties.
The dynamics of the Dutch retail market summarized in one infographic:
