Online shopping and social media are causing change and innovation in the retail marketplace, according to an article by Mariwyn Evans in the January/February issue of Realtor Magazine.

Nationally the retail market was hard-hit by the recession but is now recovering. Retail sales are growing, with online sales growing more than in-store sales. Overall retail sales grew by 7 percent in the year ending October 2011. During the same time, e-commerce retailing showed double-digit growth each month.

One area where in-store sales prevail is luxury products. Luxury shopping is all about the experience. The store's appearance, service, packaging and ambiance are all part of the purchase.

One of the major determinants of how much people shop online is based on the convenience of in-store shopping. I'm sure Alaskans are highly active Internet shoppers. We've been major catalog shoppers for a long time. Compared with the rest of the country, we have many fewer retailers and can shop almost any retailer online.

A major effect of online shopping, as well as a major trend in retailing, is the downsizing of brick-and-mortar stores. This provides several benefits to the retailer. Smaller stores are cheaper. Smaller stores can work in smaller markets. We saw this in Alaska with Fred Meyer going into Palmer with a 40,000-square-foot store, something not possible with a 125,000-square-foot store like they have in Anchorage and Eagle River.

Retailers also have discovered that stores act as showrooms for online sales. That's another reason they don't need as large a retail space. I find this to be the case here. I often want to see an item before I buy. I like to inspect the quality and features and be fitted in the correct size. If a local store carries the item, I can check it out. Then, if the store does not have what I want, I can buy it online. This helps avoid the expense of returning online purchases.

Retailers have realized that larger stores do not always mean higher sales. This means the trend toward smaller stores will continue. Also, retailers realize space can be reduced -- without hurting overall sales -- by consolidating brands previously sold in separate stores, such as Gap, Baby Gap and Kid Gap.

At the same time, retailers have learned that online sales are not adversarial to in-store sales. By offering both on- and offline shopping, retailers are meeting the specific needs of individual shoppers. One major retailer found that its best shoppers were those who shopped both online and offline. They made more frequent visits to the shopping center and spent more per visit than shoppers who shopped only off- or online.

Social media such as Facebook are playing a larger role in promoting in-store sales. A majority of retailers are beginning to use social media to reach customers through their proprietary opt-in data. Specialty retailers in the areas of apparel and home improvement tend to use this the most.

Some retailers enable shoppers with mobile phones to obtain product information instantly for specific locations. Shoppers can also see if their friends are in the store and connect immediately. The idea is to meld shopping and entertainment.

Retail is a dynamic market and retailers have to continuously innovate and adjust to stay ahead. Those who don't, don't survive. The Internet, mobile phones, social media and whatever the next innovation may be present major challenges and opportunities for retailers. They can reach out to us, their customers, to provide more convenient and better service and products that meet our individual needs.

Chris Stephens, CCIM, is a local associate broker specializing in commercial and investment real estate. His column appears every month in the Daily News.