RETAIL HIGHLIGHTS AND INSIGHTS

The retail and consumer industries are evolving fast, and proving to be a pivotal moment for businesses adapting to changing economic conditions, technological shifts, and consumer behaviors. Three major trends shaping the landscape are:

• The deprecation (or rather, the continued evolution) of third-party cookies.

• The rise of shrinkflation.

• The increasing adoption of "Store Within a Store" (SWAS) models.

These trends aren’t just shaping retail—they’re redefining how commercial real estate investors, landlords, and developers should think about their properties. Let’s break down what’s happening and how it impacts the CRE world.

1. The Deprecation of Cookies and the Rise of First-Party Data

For years, third-party cookies were the backbone of digital marketing, helping retailers target consumers across the web. Google initially planned to phase them out by 2022, then delayed to 2025, and now? They’ve shifted gears again, offering more privacy controls while keeping the cookies (for now). But make no mistake—change is coming.

What This Means for Retailers and CRE:

• Retailers are shifting to first-party data strategies – loyalty programs, direct customer engagement, and in-store analytics are more valuable than ever.

• Experiential retail will continue to rise – brick-and-mortar stores aren’t just about transactions; they’re about collecting valuable consumer data.

• Retail spaces may become data hubs – landlords should consider offering smart technology solutions and in-store analytics to attract tenants.

CRE Takeaway: Properties that support retailers’ first-party data strategies (think interactive kiosks, in-store experiences, and digital integrations) will have a competitive edge.

2. Shrinkflation: The Silent Consumer Revolt

You’ve seen it—smaller bags of chips, less cereal in the box, but the price tag stays the same. That’s shrinkflation, and consumers are catching on fast. In 2024, 79% of shoppers reported noticing shrinkflation, and their trust in brands is eroding.

How This Impacts Retail and CRE:

• Customers are prioritizing discount and value-based shopping – expect more foot traffic at dollar stores, warehouse clubs, and off-price retailers.

• Retailers are under pressure to justify pricing – promotions, bundling, and loyalty rewards are key survival strategies.

• Big-box retailers may reconfigure their footprints – offering dedicated spaces for private-label brands and cost-conscious options.

CRE Takeaway: Discount retailers and warehouse-style tenants are positioned for growth. Landlords should consider flexible lease structures and build-outs that cater to value-driven shopping.

3. The "Store Within a Store" (SWAS) Trend: Reinventing Retail Space

From Target’s in-store Ulta Beauty sections to Macy’s housing Toys ‘R’ Us pop-ups, the SWAS model is exploding. It’s a win-win for retailers—big brands get fresh offerings without taking on full leases, and specialty brands tap into existing foot traffic.

Why SWAS Is Changing the Game:

• Retailers maximize space efficiency – instead of taking on massive locations, brands can test markets within an established retailer.

• Enhances the "treasure hunt" experience – consumers love discovering unexpected finds in their favorite stores.

• CRE sees new demand for modular spaces – landlords may need to rethink layouts to accommodate rotating pop-ups or brand partnerships.

CRE Takeaway: Flexible, subdividable retail spaces will be in high demand.

Final Thoughts: How CRE Investors and Landlords Should Respond

• Invest in retail spaces that support first-party data collection – smart tech integration, interactive experiences, and digital touchpoints are key.

• Prioritize value-focused retail tenants – discount, warehouse, and private-label brands are positioned for long-term success.

• Make space for SWAS and experiential retail – think adaptable lease structures, modular retail concepts, and partnerships that attract foot traffic.

• Consider flexible leasing options – landlords who accommodate evolving retail trends will have a competitive edge.

• Monitor consumer trends closely – understanding shoppers’ behaviors and expectations will help shape successful retail strategies.

• Emphasize adaptive retail spaces – designing properties that cater to emerging retail models will future-proof investments.

Retail isn’t dying—it’s evolving. And those who adapt their commercial real estate strategies to meet these emerging trends will be the ones leading the pack.