16 Feb Jonathan Cartu Declares 3 key trends are shaping Boulder’s retail future
The Boulder market has experienced a remarkable near five-fold increase in construction of retail space from fourth-quarter 2018 to fourth-quarter 2019. According to CBRE research, 105,803 square feet of retail space was under construction in the fourth quarter compared to only 18,500 sf of retail space under construction in the same quarter of the previous year. Additionally, the market has seen a decrease in retail vacancy year over year and quarter over quarter; the direct vacancy rate in fourth-quarter 2018 was 6.8% compared to 5.8% in fourth-quarter 2019.
Boulder’s 29th Street Mall currently is seeing an influx of new tenants, such as Altar’d State, Bonobos, Stretch Zone and Dry Bar. Activewear retailers, such as Helly Hansen, continue to expand their footprint in Boulder. Additionally, inventive properties such as Boulder Commons, Boulder’s first aspiring net-zero property, are combining office and retail spaces under one roof to offer retail as a thoughtfully curated amenity for office tenants. Boulder Commons is located in the Boulder Junction neighborhood, which is a transit-oriented development area seeking to create walkable streetscapes among residential, commercial and retail spaces in the area.
As Boulder’s tech industry and office sector have thrived, the market has responded with elevated retail offerings to deliver on Colorado’s promise of live-work-play. This is playing out across three key trends: traditional categories are becoming more innovative, wellness culture is expanding and new food experiences are being delivered to the market.
Innovating traditional categories. As retailers are looking to create stand-out experiences that fit with Boulder’s unique lifestyle, they are innovating the way they engage shoppers to heighten customer experience.
More Boulder retailers are making use of pop-up experiences and shops, which allow local businesses to test concepts in the market and experiment with physical space. This is particularly helpful for new brands or previously online-only brands to make a splash in the market and engage consumers.
As tangible experience in physical retail is a core competitive advantage over online shopping, brick-and-mortar landlords are starting to activate their spaces in innovative ways, helping to draw shoppers to their centers. Wonder Wonder in Boulder is an example of an interactive experience that leverages social media to drive shoppers into a physical space.
Boulder also is seeing traditional retailers experiment with new concepts that align with emerging shopper preferences. One example is Patagonia, which opened a Worn Wear shop within its Pearl Street location last year. The store focuses on used clothing, a subsector of the clothing market gaining in popularity with more global attention on environmental responsibility. With an appreciation of the outdoors core to Boulder’s innate brand, the store is a great example of a retailer aligning itself with local priorities.
To continue in the face of growing online sales, the physical retailers that can evolve and innovate around unique customer experiences are the brands that will survive and thrive.
Expanding wellness culture. Alongside growth of fitness studios and activewear retailers, Boulder is experiencing a boom in expanded wellness services. The market, staying true to the city’s health-centered ethos, is seeing additions of infrared saunas and medispas. For example, an 8,000-sf space shared by True Bloom Spa + Wellness and Indy Salon space has opened in the Boulder Marriott.
Both large and small-space fitness concepts have been entering the market, including larger operations like Crunch, and smaller, specialized gyms like barre3, Kondition Fitness and Shred 415.
Looking ahead, fitness and wellness concepts are expected to continue to thrive in the Boulder retail market, especially as these segments are physical experiences and thus resistant to the e-commerce effect.
Delivering new food experiences. Boulder also is experiencing a wave of food options that are challenging the traditional options of fast-food and upscale dining.
Consumer demand is rising for more experience-rich dining options in retail properties, which can be seen in the migration of the food hall trend to Boulder. Food halls such as Avanti and Rosetta Hall are opening in Boulder, while new wellness-center restaurants such as Flower Child also have been embraced by the local community.
According to CBRE research, nearly a quarter of every retail dollar spent in the U.S. in 2018 was on food and beverage. With consumer preferences constantly changing, fast food will continue to evolve to meet demand for healthy food options, while adding technological conveniences and modern designs. Growth in fast-casual dining also will continue locally as Boulder prepares for new locations of Torchy’s Tacos, Shake Shack, Sweetgreen and Chop 5 Salad Kitchen.
While the concept of traditional malls and department stores is being challenged, the truth is brick-and-mortar retail is not dead. People are searching for a unique experience and a sense of community, and Boulder is responding by offering innovative retail concepts and collaborative properties where people can work, shop and dine.