Cars are the New Customer
09/29/2021 | By John Cumbelich
Our firm just consummated our first-ever ground lease transaction with a restaurant brand that will build a triple-lane drive thru. The design will allow the brand to accommodate over 50 vehicles in the drive thru stack at one time. This next generation super-sized drive thru is not only an accommodation to a booming restaurant brand, but a solution that addresses frustrated shopping center owners whose parking lots have become swamped in cueing automobiles, and municipalities concerned over vehicles backing up onto busy streets.
Similarly, grocery, retail and dining leases now have standard language requiring dedicated parking stalls for online order customers. These parking spots create convenience for the consumers as well as better integration between the retail or dining establishment with delivery service partners like Grubhub, DoorDash, Uber Eats, etc.
As ever, shopping center owners are trying to improve & differentiate their assets from their competitor’s assets in various ways that will attract best in class users. Increasingly, providing conveniences and solutions to those customers means designing a shopping center paradigm that turns the consumer’s car into the customer.
One of the frustrations of the weekly shopping trip has long been the challenge of reckoning a long list of groceries into a small window of time. Shopping center owners that can optimize this experience for the consumer can thereby position themselves to capture both credit tenants and premium rents. An example of this optimization is yet another vehicle-first innovation in retail centers – the charging station. Notice how owners are increasingly adding EV charging stations to their common areas in high visibility locations. The addition of this service to the consumer and his vehicle, efficiently combines a shopping trip with a full charge on the car battery. That gives the consumer the valuable gift of time, in exchange for the decision to select one center over another.
Covid restrictions on indoor dining, concerns about gathering in large retail stores or other venues, and limitations on air travel were the spark that set off an explosion of innovations around how consumers work, shop, relax and dine. As person-to-person interaction has become restricted in various ways, our vehicles have become the point of contact with our retail establishments. Grocery stores, drive thru restaurants, banks, pharmacies, coffee shops and other users have each improved their interface with the consumer’s vehicle as the latest front in the battle for the consumer dollar. Look for further auto-centered innovations as shopping center owners and savvy brands seek to become leaders in this changing retail paradigm.
Obviously, the shift away from in-person dining and shopping has necessitated more time in the car, thus more fuel consumption, and more visits to the fueling station. The present boom in fuel and C-store expansion is a direct result of these market pressures. Still another outcome of all the time in cars has been a boomlet of car wash brand expansion.
It’s, um, no accident that Caliber Collision has become a darling in the Net-Leased investment market. Why? Auto body repairs are internet proof, recession proof & pandemic proof. Add to this a paradigm shift in consumer behavior that puts the car at the center of the retail experience, and brands like Caliber have a clear runway of increased demand.
What’s next? Drive thru urgent care? Well…yes. If you are like me and millions of others, you received your COVID screening test in the drive thru aisle. The further expansion of health-related services for the car-bound consumer is a certainty.
While the pandemic will eventually run its course, look for the automobile focused innovations that have quickly taken root both in consumer behavior and retailing to become the new normal.
About John Cumbelich & Associates
John Cumbelich & Associates is a San Francisco Bay Area based firm that provides commercial real estate services to Fortune 500 retailers and select owners and developers of retail commercial properties. The firm's expertise is in developing store networks for retailers seeking to penetrate the Northern California marketplace and the representation of premier Power Center and Lifestyle developments.