If you’re in the retail real estate business, there are likely two words you’ve heard incessantly over the past year: “dining” and “entertainment.” But while they are certainly buzzy terms at this point, they are not in the same league as the most dreaded buzz word of all.
That, dear reader, is because food and entertainment options, in various forms, are actively being implemented across the industry. New food uses in particular are serving up (couldn’t help myself) some of the most interesting concepts for shopping centers to pay attention to, which is particularly important given that American now spend more money on dining out than they do on groceries.
Dating back to the days of the Greek agora, shopping centers have been social, well, centers of their local areas. While food has always played a role in shopping centers, as more channels evolve to handle the mere transactional nature of commodities, shopping centers would be wise to place greater focus on the experiential.
According to a study released from JLL, shoppers who stop to eat spend 35 minutes and 12% more at a property, than those who forgo a bite. That’s quite a lot of dough (ok, I’ll stop … promise), when you extrapolate it over thousands of shoppers. To take advantage of that, the report outlined five mega-trends in consumerism that are impacting the F&B and retail real estate industries.
1. The Experience Economy
I used to collect baseball cards. Today, people have moved away from collecting “things” in favor of collecting “experiences.” Those experiences can range from glamorous trips to a simple night out at a new restaurant with family or friends.
In fact, U.S. spending dedicated to experiences has increased by 70% compared to 30 years ago – and nearly 80% of millennials would choose to spend money on an experience over an object. Therefore, expect eating and things like art, gaming, sports or concerts to collide through virtual and augmented reality. Oh, and in case you’re wondering – yes, my mother also threw out my baseball card collection too.
2. Supply Unchained
The “Eat Local” mantra is very much alive and well. From 2007 to 2017, farmers markets in the U.S. grew by 100%, eclipsing 9,000 in total. Consumers in general have been clamoring for greater authenticity – and they certainly want it in their food options. Sustainable consumption, supporting small businesses, and just getting closer to a brand are chief concerns that are driven by a sense of community pride and eco-preservation. Whether it is a farmer’s market, farm-to-table restaurant or a fresh food conscious chain, expect the fixation on sustainable sourcing and production to be present across the supply chain…or lack thereof.
3. Better Business
We know that consumers are increasingly aware of the negative impacts that their consumption has on the planet and society. Roughly one-third of food produced for human consumption is wasted and, as a result, governments, businesses and consumers alike are pushing for change in how we use and manage resources.
More and more, consumers are connecting to brands that have social and environmental value. In fact, 62% said they want brands to help them make a difference in the world. Helping reduce the negative impact of waste in the foodservice industry will continue to spark great initiatives and drive profits for those that are able to prove success.
Through social media, everyone now has the ability to be a food critic in the palm of their hand. It’s no longer just about fashion, what you eat (or where you ate) has become an important form of self-expression and people collect Michelin-star dining experiences like, well, baseball cards. Going forward, expect marketing initiatives in restaurants to encourage social media engagement as chefs serve up Instagram-worthy dishes.
Throughout history, inventors have responded to pain points and un-met demands to make our lives more convenient (except for the pet rock, that was just a money grab). Through innovation, expectations change, and the food industry is no different. The meal delivery service market is expected to grow by 15% per year through 2020. Expect delivery driver access, short-term parking, and delivery-specific menus to be commonplace at your favorite eateries very soon.
One trend that didn’t quite make the cut as it is currently underdeveloped, is big data. Mall and shopping center owners are instituting new ways to bring the same levels of data to the physical store that e-tailers currently enjoy. As with all other components of retail, having a better understanding of the customer is going to be of paramount importance in the food service industry as well.