5Qs for PECO’s Jeff Edison on technology and traditional retail
Jeff Edison co-founded Phillips Edison — one of the nation’s largest owners of grocery-anchored shopping centers — just two years after the founding of the World Wide Web. PECO’s chief executive officer has watched the progress of tech’s influence on retail from the get-go, and we asked him for his views on its current impact.
Microsoft is working with Kroger on retail as a service, or RAAS. How is grocery’s moves toward digital affecting your centers?
We have been amazed at the transformation grocers are making as they embrace today’s quickly changing retail landscape. Their commitment to innovation is likely a core reason why internet disruptors have not yet found a way to make true inroads in the space.
How is Phillips Edison embracing technology?
Technology is reshaping every facet of our business. Data and analytics power the algorithms that optimize our decisions around merchandising, tenant mix and property acquisitions. Robotics are creating efficiencies, Alexa puts vital information at our team’s beck and call and drones are helping keep our properties clean and safe. Technology, innovation and change have always been a part of PECO’s DNA and we continue to reinforce these traits and invest in technology.
Do you see home delivery of groceries increasing? If so, how will this affect your non-grocery tenants?
Yes, if you include click and collect. One of the biggest challenges for these services is the cost of paying someone to collect the orders, but grocers are experimenting with technology to address this. Most U.S. consumers still visit neighborhood grocery stores an average of twice per week. Shoppers still want to touch and smell the food. And last-minute, on-the-way-home purchases are always going to happen. The foot traffic generated by high-quality, innovative grocers promotes the success of all the retailers in shopping center.
The touching-tasting-smelling aspect of grocery will remain one of retail’s ultimate experiences, yes?
We’re seeing retailers continue to place an emphasis on creating custom experiences, reinforcing our belief that consumers will continue to want to see and touch the products they’re buying. Online retailers are starting to recognize this, and we’ve seen a rise in the of number them — including Amazon, Warby Parker and Allbirds — that are opening physical stores to complement their online marketplaces, validating the importance of bricks-and-mortar retail in an increasingly Internet-based world.
What’s your prognosis for the health of traditional, brick-and-mortar retail?
Retail is a dynamic industry that has proven its resilience repeatedly. When PECO started in 1992, Walmart was only a small player in grocery. Today they are the largest grocer in the world. Walmart’s expansion caused significant changes and rampant stories of doom in the grocery sector but grocers adapted and the disruption created opportunities for the retail real estate investor. The industry’s historical strength and track record of successfully adapting to changing consumer preferences should not be overshadowed by buzz around store closures. Restoration Hardware’s three-story gallery store.
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