Bricks-and-Mortar Focuses on Engaging Consumers in a Digital World
The results of Levin Management Corporation’s (LMC) annual Pre-Holiday Retail Sentiment Survey are in and the outlook is optimistic. Retailers in our 100-property, 14-million-square-foot shopping center portfolio are coming off a generally positive year to date and expect sales to remain strong throughout the holiday season.
Retail Real Estate Trend: A Positive Year is Expected to End on a Positive Note
For the majority of LMC survey participants, year-to-date sales and shopper traffic have been similar to or better than last year at this time. Notably, the percentage reporting same-or-higher sales (62.4 percent) through late October jumped nearly 6.0 percent from the findings in LMC’s mid-year 2017 survey and is 2.8 percent higher than the trailing five-year average in LMC’s pre-holiday surveys.
“From a ground-level perspective, 2017 has been a positive year for retailers within the LMC portfolio, and the survey findings support our observations,” noted Matthew K. Harding, president. “Busy shopping center parking lots and more than two dozen new store openings testify that the economy is strengthening, and consumer confidence is rising. In fact, The Conference Board reported that in October consumer confidence registered at its highest level in nearly 17 years.
“It comes as no surprise, then, that more than three-quarters – 76.9 percent – of our survey participants expect sales to be the same or better than last year’s holiday shopping season,” noted Harding, adding 41.7 percent of respondents plan to add seasonal staff. “This optimism is reinforced by projections from our industry’s largest trade organizations.”
Research from Major Retail Trade Groups Reflects LMC Survey’s Findings
The National Retail Federation anticipates 2017 holiday retail sales to increase between 3.6 and 4.0 percent, a forecast that would meet or exceed last year’s growth of 3.6 percent. The International Council of Shopping Centers (ICSC) predicts a 3.8 percent year-over-year growth in retail holiday sales, with 46.0 percent of shoppers indicating they will spend more this holiday season. Further, the ICSC study shows 91.0 percent plan to shop at bricks-and-mortar stores.
A Retail Trend Will Continue with an Early Start to Holiday Shopping
Nearly half (48.7 percent) of LMC survey respondents expect their holiday sales to peak before and during the Thanksgiving/Black Friday weekend. “Our retailers anticipate consumers will shop early again this year,” Harding said. “Interestingly, this is the first time in five years there are four pre-Christmas Saturdays in December, which expands the season and provides an opportunity for additional sales. We look forward to seeing if this changes the dynamics. Analytics firm Shoppertrak expects Saturday, Dec. 23, to be the second-busiest shopping day, after Black Friday.”
Tech-Centered Marketing Tools Will Play a Major Role This Holiday Season
The LMC Pre-Holiday Survey results emphasize retailers’ plans to engage customers and enhance their in-store experiences during the 2017 holiday season. Continuing an established retail trend, tech-centered marketing is playing a key role as bricks-and-mortar stores strive to compete in an increasingly digital world.
More than half (52.3 percent) of respondents who use tech-centered marketing tools report their efforts have boosted holiday sales in prior years. To that end, 96.2 percent of those respondents will employ the same or more technology-centered marketing this holiday season.
Email remains the favorite avenue for reaching customers outside the store. This tactic is used by 80.2 percent of survey respondents who employ tech-marketing tools, with social media/social marketing in second place at 73.7 percent. Also popular are text messaging (32.4 percent), and banners or other internet ads (29.8 percent).
“There is no doubt today’s consumers are influenced by information they receive digitally,” noted Melissa Sievwright, LMC’s vice president of marketing. “In fact, some of the latest research is turning out incredible numbers. ICSC’s Holiday Shopping Intentions Survey found 85 percent of shoppers will research products online before making in-store purchases, and nine of 10 will visit retailer websites or apps to get product information.”
Retailers Will Use Tech to Engage Shoppers and Enrich the In-Store Experience
The need to engage customers digitally does not end when they enter a store, and LMC retailers are providing a variety of tech-centered incentives and conveniences this holiday season, Sievwright noted. In fact, of LMC survey respondents who are employing tech-centered marketing tools, 75.8 percent offer digital coupons, discounts and/or loyalty points; 37.2 percent provide in-store, online ordering (with free shipping) for out-of-stock items; and 34.6 percent have an option to pre-order items online for in-store pick up. Other popular conveniences include free Wi-Fi (29.0 percent) and electronic receipts (28.6 percent).
“Shoppers today use their mobile devices in-store to access coupons, check availabilities and compare prices – so offering digital incentives and strong Wi-Fi signals is smart practice,” Sievwright said. “We also know consumers who buy online and pick up in-store often make additional purchases during their visit. We are encouraged by our survey’s indication of strong coordination between our tenants’ physical stores and online counterparts.”
Retailers Ready to Try New Tech-Based Enhancements This Season
The LMC survey shows nearly one-third (32.7 percent) of respondents are planning to try new approaches this year to enhance the in-store experience. And while some are tied to tech-centered marketing, many others say they will take advantage of aspects of the physical store to create an environment that cannot be duplicated online.
“Our tenants recognize that consumers want more out of the shopping experience than simply purchasing gifts,” Sievwright said. “In addition to traditional sales and specials, we are seeing everything from in-store fashion shows, performances and demos, to CPR classes and fundraisers for local charities. The survey also revealed a strong emphasis on enhanced customer service – the cornerstone of successful retail.”