The retail real estate landscape in 2025 is shaped by evolving consumer behaviors, technological advances, and heightened competition for premium locations. Despite the growth of online shopping, physical stores remain integral, with brands facing increasing challenges to secure prime retail spaces. Trends have emerged in response to this competitive market, including the adoption of smaller and more flexible store formats, a focus on experiential retail, tailored geographical expansion strategies, and data-driven site selection. Retailers are leveraging smaller spaces to enhance customer experiences rather than focusing on inventory, with examples like Kizik’s hands-free footwear stores offering personalized services. Experiential elements, such as Lululemon’s fitness classes and Sorel’s AR pop-up events, are becoming central to attracting foot traffic and building deeper customer connections.
Brands are also tailoring their expansion strategies, recognizing the importance of understanding local markets, both regionally and internationally. For example, U.K. based Seasalt Cornwall’s U.S. expansion utilized careful market research to align with local preferences. Data analytics has become a vital tool in site selection, helping retailers make informed decisions about locations based on factors like customer demographics, traffic patterns, and online behaviors. Additionally, the suburban-first approach is gaining momentum, with suburban retail centers showing lower vacancy rates and increased demand as remote and hybrid work shifts become more of the norm and where consumers spend their time. Retailers embracing these trends are well positioned to succeed in a competitive, evolving market.
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About The Author: Jeff Dervech
Jeff Dervech is a Tampa local commercial real estate agent, specializing in the arena of retail strip center and shopping centers.
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