Our Annual Pre-Holiday Survey Reflects Retailer Optimism | Levin Management Blog
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Our Annual Pre-Holiday Survey Reflects Retailer Optimism

Strong Sales, Positive Expectations, and High-Tech Marketing Plans Point to a Happy Ending for 2015

Retailers in our 95-property, 13 million-square-foot leasing and management portfolio are heading into the holiday shopping season confident and optimistic. They responded to our annual Pre-Holiday Retail Sentiment Survey with strongly positive views of the critical weeks ahead. This looks like a retail trend that’s all about good news.

As a leader in retail real estate, we couldn’t be happier with the picture our survey paints. According to 66.5 percent of respondents, 2015 sales are equal to or better than they were at this time last year. This is the highest percentage in the six-year history of the survey. The year-to-date traffic report is good too, with 64.2 percent indicating their stores saw the same or a higher volume year over year. And a whopping 80.5 percent of survey participants said they are expecting their 2015 holiday season performance to equal or top 2014.

“These are very positive numbers,” noted Matthew K. Harding, Levin’s president. “Our tenants are clearly doing well in 2015, thanks to a number of factors including the economic rebound, low gas prices and a growing equilibrium as bricks-and-mortar stores adapt for success in a technology-driven world.”

Our Pre-Holiday Survey Findings Mirror Other Key Industry Reports

Our survey results reflect the findings and predictions of leading retail industry organizations. The International Council of Shopping Centers (ICSC) and the National Retail Federation (NRF) are projecting holiday sales growth of 3.3 and 3.7 percent, respectively. This compares to a 10-year average of 2.5 percent. According to NRF, consumers plan to spend an average of $805.65 on holiday merchandise, the highest projected amount in its Holiday Consumer Spending Survey’s 14-year history. ICSC reports that 95 percent of holiday shoppers intend to make a purchase in a physical store this year, reflecting the resiliency of bricks-and-mortar despite e-commerce growth.

An Early Start Will Usher in a Strong Holiday Shopping Season

More than a third (36.0 percent) of our respondents expect their holiday sales will peak prior to and during the Thanksgiving/Black Friday weekend. Nearly half (45.3 percent) predict their peaks will occur in mid-December through the weekend before Christmas.

“These percentages are similar to last year, indicating that ‘Black Friday’ has really become a month-long event, with many promotions starting in early November,” Harding noted. “Hanukah comes early in December this year, which will keep things busy during the first week of the month. And with Christmas falling on a Friday the mid-month time period bumps right up against the final weekend to shop.”

A Retail Real Estate Trend Continues: Ramped Up Seasonal Staffing

As in past surveys, many retailers told us they plan to add staff to accommodate the expected holiday rush. For 2015, 31.3 percent of respondents will add seasonal team

members. This compares to an average of 29.4 percent in the four previous years. Of those who plan additions, 80.0 percent said their number of seasonal hires will be the same or higher than 2014. NRF predicts that between 700,000 and 750,000 seasonal jobs will be created nationwide during this holiday season, matching last year’s 714,000 holiday positions.

High-Tech Holidays are Here to Stay

We asked our tenants about whether – and how – they are using technology in their marketing mix. More than three-quarters (76.1 percent) told us that tech is, indeed, central in their efforts to reach customers. A full 89.0 percent said they will employ the same or more tech-driven marketing during the 2015 holiday season compared to last year.

“We are an increasingly digital society, and savvy retailers are responding accordingly,” Harding said. “They are using a variety of tools as they leverage the Internet and mobile technology, in particular, to boost holiday sales.”

And there is a good chance this will help drive sales. In a survey by G/O Digital Marketing, more than 90 percent of consumer respondents said they search for deals and discounts online prior to shopping in-store. NRF’s survey revealed that 37.9 percent of smartphone owners will use their devices to research products, 28.4 percent will look up information like store hours and directions, and 20.3 percent will check on a product’s in-store availability this holiday season. Nearly half (47.5 percent) of tablet users will research products, while nearly one-quarter (23.5 percent) will check for in-store product availability.

Social Media and Email are the Top Tech Routes to Holiday Shoppers

For our tenants, social media remains the most popular tech platform, used by 89.2 percent of our respondents who employ technology in their marketing. Facebook is their top choice (used by 88.4 percent), followed by Google+ (used by 40.8 percent). After social media, email is the most-employed tech platform (used by 69.2 percent), followed by Internet advertising (37.5 percent), text messaging (22.5 percent) and SEO optimization tools like Google AdWords (13.3 percent).

It looks like our retail tenants are on the right track with email. G/O Digital believes this medium, often considered dated, remains the most effective tool for reaching consumers, with more than 51.0 percent of its survey respondents saying they would click on an email promotion over a social media post, a text message or mobile promotion. However, 25 percent of those respondents indicated they would click on a Facebook promotion, and G/O Digital anticipates social media “may rival email and other effective promotional outlets in the near future.” New “shop” buttons on Facebook, Pinterest, Instagram and Twitter may fuel this.

Keep up with retail real estate trends. Look for our next Retail Sentiment Survey, conducted in January on 2016 sentiment and plans. In May, we’ll report on mid-year progress and tech.