Why Retail Owners are Focusing on Service Based Tenants

The retail industry is undergoing a bit of a transformation. Just as retailers are trying hard to attract their shoppers, property owners are trying to attract long-term tenants. Retail property owners are finding success with tenants that don’t rely on internet shopping. According to Michael Koss, the owner of Malibu Country Mart, service-based tenants are retail property owners’ best bet to find success.

The Popularity of Service-Based Businesses

As the internet erodes the sales of goods, Koss believes that service based tenants are the solution. Businesses like hair salons, gyms, restaurants, and spas are all examples of service based tenants that property owners are beginning to rely on. As Koss tells it, consumers will always have a need for these types of services.

When looking at the market, restaurants and grocery stores are taking the lead. With the availability and convenience that restaurants offer, consumers always have and will continue to rely on foodservice. When considering grocery stores, even with the addition of home delivery options, groceries and markets will never go out of business.

When looking at other successful service-based businesses, health and wellness companies are quite popular. Depending on the needs of a particular demographic, health and wellness businesses may or may not find their target audience. While gyms are usually a good choice in any neighborhood, both business owners and retail property owners should be mindful to ensure that the ethos of a particular company aligns with that of the surrounding neighborhood.

Choosing a Synergistic Tenant Mix

Koss holds that it is essential to have a synergistic mix of tenants. Property owners should consider the impact their retail centers have on their customers. In order to ensure synergy among tenants and the neighborhood, property owners need to ensure that each tenant is able to cater to and meet customers’ needs.

Property owners searching for a winning strategy should rely on a strong tenant mix and service-based tenants. Koss points out that shopping centers that provide customers with a unique experience will always fare better. The goal of every property owner should be to attract customers and encourage them to spend time shopping, eating or being entertained.