The obstacle for retailers will be to find a balance between catering to the Millennial, Baby Boomers becoming empty-nesters and to the next generation of shoppers, Gen Z. Retailers are currently in the heart of understanding what Millennials want, but these needs are changing since Millennials will eventually get older, get married and have children.

The challenge for retailers and retail owners will be adapting to the changes in Millennial demands and the new rise of demands from Gen Z. Millennials and Gen Z are similar in a lot of ways, but they are also very different. Millennials were introduced to social media much later in their lives and are not as constantly connected as Gen Z.

Gen Z is the most social of all the generations. Social media has been present for most of their lives, and they place a significant emphasis on interacting with brands on their social-media channels. As a result, they are much more cost conscious and pay closer attention to marketing deals and sales than Millennials.

They are also much more comfortable making purchases on their smartphones and use different social-media outlets such Snapchat and Instagram versus Millennials, who predominantly use Facebook and Twitter. Ultimately, the challenge for retailers and retail owners will be adapting to the changing demands of the multiple faces of today's and future consumers and figuring out new and innovative ways to capture their attention.

Philip Voorhees, EVP, CBRE: The greatest challenges for retailers are the virtually limitless selection of products available from online retailers and the convenience that they can be purchased. Thus, the substantial challenge for retailers is selling commodity products with a “commodity” customer experience. From a Darwinian perspective, this should be a blessing: evolve or perish. The result for retail shoppers should be an increasingly intuitive, convenient and higher-quality retail experience. In the not-too-distant future, bricks-and-mortar retailers will be merchandising stores based on information gleaned from “auditing” customer preferences via mobile phones and the applications therein. Payment systems will automate. Retailers like Warby Park and Bonobos already provide the ability to “shop” a retail store, with order delivery via an online fulfillment network and virtually overnight. This is not the Jetsons yet, but with self-driving cars undergoing testing on America's roads right now, we must be getting close.

Bill Asher, EVP, Hanley Investment Group: Online retailing and what the real impact will be on traditional bricks-and-mortar stores is probably one of the greatest challenges that the retail sector is presently facing. Although e-commerce has grown tremendously compared to in-store retail in the last decade, traditional brick-and-mortar shopping is not going away any time soon. Baby Boomers could be the key since they hold approximately 70% of the nation's wealth or disposable income. Retailers will continue to focus on Boomer purchasing habits to increase physical-store visits and sales. Retailers like Nordstrom and ULTA Beauty are examples of retailers implementing loyalty programs and utilizing online advertised incentives or coupons to get customers into the store for purchases. Boomers are motivated by savings as well as great customer service, which will continue to keep brick-and-mortar retailing viable. According to research findings by Oracle, 71% of 60-plus-year-olds and 54% of under-30-year-olds prefer to purchase retail in-store and take goods home with them. 35% of under-30-year-olds and 24% of 60-plus-year-olds prefer to shop online and have their goods delivered. Retailers will continue to adapt, and many will continue to utilize a balance of both online and brick-and-mortar to appeal to all shopping habits and consumers, but shopping at a traditional physical store and regional shopping districts are not going away in the near future.

Glenn Rudy, senior managing director, NGKF Retail Capital Markets—West: One of the single greatest challenges to the retail sector as a whole is consumer confidence. Everywhere you turn, consumers are inundated with the idea that brick-and-mortar retail is dead due to ecommerce. According to the Census Bureau of the Department of Commerce, online sales only accounted for 8.3% of total retail sales in the US in Q4 2016—up only 100 basis points for the entire 2015 calendar year. While certainly a disruptor in the traditional retail sector, retailers are embracing their omnichannel sales opportunities, investing in technology and utilizing their brick-and-mortar locations as an integral part of the entire sales cycle. Clearly, some retailers are more susceptible to the e-commerce threat than others, but those embracing the technology and creating unique consumer experiences will continue to thrive in their respective brick-and-mortar footprints.

Keith Kropfl, principal, Avison Young: Owners need to adapt to a new way of thinking and how they backfill spaces. That could mean that big-box spaces get divided into smaller spaces and the addition of restaurant and entertainment concepts or non-traditional uses—such as medical services—are considered. These are all forward-thinking strategies to decrease vacancy.

Another challenge, from an investment-sales standpoint, is that there is a strong amount of uncertainty in the tax-reform arena. There is talk of a capital-gains-tax reduction, which would be a game changer; however, nothing has actually been set in stone as of yet, and it could take years for new tax-reform laws to pass, as we are seeing with the process of Obamacare reform. Many owners are in a holding pattern as they wait to see how tax-reform regulation plays out.

Julie Brinkerhoff-Jacobs, president, Lifescapes International: It's no secret that online shopping is gaining momentum. Retailers are downsizing as they shrink their brick-and-mortar footprint and migrate more of their sales online.

That said, e-commerce is not the only threat to brick-and-mortar retail. The lack of public spaces and destination-driven environments is a major challenge that continues to impact the performance of retail centers. As landscape designers, we see a tremendous opportunity to boost the bottom line at shopping centers by creating dynamic, thoughtfully designed gathering spaces that encourage socialization and provide endless opportunities for connection.

Another major challenge that we see with the retail sector is an inability among property owners to really understand their market segment. The gaming and hospitality industries, on the other hand, truly understand their client base, which is why they have been extremely successful. Retail owners have just recently begun to leverage new technology to track consumer choices and analyze this data in order to best cater to the needs of shoppers.

For example, despite our industry's obsession with what millennials want, Baby Boomers comprise the majority of retail consumers. They are the ones with the most disposable income and buying power. It's important that owners pay attention to this demographic and understand their purchasing decisions.

As a landscape architectural firm that has worked on numerous hospitality and casino projects, we also understand that the key to success is all about the guest experience. The importance of the guest experience applies to the retail sector as well. Retail owners that reposition their centers into entertainment-driven destinations will have the most success in the years ahead.