We are seeing great changes in the Retail marketplace, as old line businesses go out-of-business, like Payless Shoes, and others struggle like Macy’s, J.C. Penny’s and Sears. This is partially due to the shift to on-line shopping and quick delivery to your door. But there are other forces at work – Millennials are somewhat less materialistic then previous generations, partly due to high student debt. They have a higher savings rate because if they want to buy a house, it will take a bigger down payment. Altogether not a bad thing, but fully one-third of our economy is driven by consumerism, so retailers would rather sing “buy baby buy” and not “save baby save.” Then, you may have noticed that clothes have gotten very, very casual, so no need to spend a ton on the latest fashions. And it is said the younger set prefers experiences to buying things. This means retailers will need to emphasize the experience of shopping over the actual purchase. It is just easier to find your immediate need on your iPhone, buy it right then and have it delivered to your door rather than get in your car, spend on gas, fight the traffic and waste time shopping, going from store to store. Who needs the hassle?
So, we see local retail centers becoming service centers, where you go for an experience and doing something for yourself. You go there for your workout, your dentist, your CPA, your chiropractor, your hair cut, your nails, have a massage, visit a wellness center, get some food, join your friends for a drink or buy your insurance and the like. Most hard goods sellers are huddled in the power centers, fashion malls and grocery anchored centers, while the smaller neighborhood convenience centers handle “experiential” needs. This is a big change going on in retail now.
Another and related shift we see is medical practices wanting to get closer to their patients. We have seen Urgent Care and Emergency Rooms spring up all over San Antonio, mostly in retail locations that are easily accessible. Likewise, dentists, chiropractors, ophthalmologists, optometrists want to be down on the ground floor, “first floor – front door” access to make it easier for their patients to get to them. Also, this should make it easier to pick up new patients from doctors and practices that are hidden away in the upper levels of hard to reach medical office buildings. Going to the doctor is not a fun experience but a needed one, nevertheless. However, when it is just too hard to find the medical office building, then find a parking spot, go to the lobby, then up the elevator and down to the end of the hallway, then the experience is even more painful than it needs to be. Medical professionals have to hustle these days because they are not making the kind of money they used to make, so easier is better for everyone.
This is what we call Medical Retail, a new trend coming to a shopping center near you! This answers the needs of medical providers to be more accessible to their clients and for the clients to more easily find their medical providers at times that are most convenient for them. Then, Landlords like these creditworthy medical tenants that can replace the retailers that are going out of business. Another interesting example is the retail medical clinics embedded in Walgreens and CVS Pharmacies. Retail clinics can actually cut down emergency room visits and save billions of dollars in health insurance premiums and Medicare payments. This is truly an ever changing world and innovation always benefits the consumer. Protecting old, outdated modes and models keeps us from improving our lives.