Using Mixed-Use Real Estate to Bridge Multiple Retailing Gaps

Larry Alton
Larry Alton
Guest Contributor

Mixed-use construction may not solve all problems retailers face, but it can help administrators develop a stronger commitment to the shopper service side of the process, while front end professionals come to understand the processes that help the business operate.

At a time when shoppers have more options than ever before and online shopping increasingly grows, stores face a new challenge: providing a wide variety of high-quality products along with great shopper service. This is easy online, where they have nearly unlimited storage space and customers can reach support staff via phone or online, but much harder in brick-and-mortar businesses. With this in mind, a growing number of stores are considering renting or buying space in mixed-use developments to ensure they can consolidate operations and meet their shoppers’ needs.

Digital Versus Physical

As demonstrated by Amazon’s recent launch of physical store locations, e-commerce brands today are open to the possibility of brick-and-mortar operations. After all, physical stores can increase brand awareness, decrease the cost of customer acquisition and increase the depth of shopper-brand interactions. But despite this shift, there is still a strong divide between the two structures, and it can be hard for companies to make the transition. Mixed-use real estate, however, helps ensure staffers have the tools they need to support their customers.

Front End Meets Back End

One major way that formerly e-commerce-focused businesses can benefit by moving into a mixed-use development rather than a traditional office/store split is that it allows them to keep front end and back end operations in one place. That means if a staffer who typically handles the shop floor can’t provide the answers to a service question, service staff are just down the hall or on another floor. This set-up can also make it easier to train employees to climb the corporate ladder. Skilled retail employees can split time between administrative office roles and the shop floor without splitting time between two different business locations.

 

Mixed-Use Spaces

For businesses interested in testing out a mixed-use operational space, this is an exciting moment. That’s because the real estate industry is developing more of these properties, with single structures combining a variety of functional spaces. But, they do need to understand the different requirements of each space.

When looking for a property, then, businesses should consider commercial office space for back end operations with easy access to front end retail space. There should be a seamlessness to this shared construction; though it may not have been built for use by a single company, you should be able to adapt it to this kind of use. You should also be able to negotiate a decreased lease rate in return for leasing a larger share of the property.

Finding Your Place

In addition to assessing the individual spaces your business will use, businesses looking to take up space in a mixed-use development should consider what other companies occupy the development. Ideally, you want to share a development with businesses that will cross-fertilize yours, whether that means joining a diverse group of apparel and accessory brands in a single complex or creating a plaza filled with health-oriented brands like health food stores, medical centers and gyms.

Grocery stores, which have historically struggled to break into the e-commerce space, may find that the growth of local delivery services make mixed-development spaces more useful than otherwise expected. This would allow them to handle shipping and support for local distribution services in the same space as the actual grocery store.

Ultimately, stores that will thrive in a mixed-used development are those that want to improve shoppers’ in-store experience. By rearranging the relationship between the front end and back end of the business, administrators develop a stronger commitment to the customer service side of the process, while front end professionals come to understand the processes that help the business operate. Mixed-use construction may not solve all the problems businesses face, but they can create a cohesion that benefits everyone involved.

About the writer: Larry Alton is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter @LarryAlton3 and on LinkedIn.

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