Levin Retail Tenants Report Positive Seasonal Outlook, Robust Hiring Plans

Our Annual Pre-Holiday Survey Confirms Digital Marketing Momentum

Results of Levin Management Corporation’s (LMC’s) annual Pre-Holiday Survey of our retail tenants are in and the news is more than good, with respondents reporting robust hiring plans and continued digital marketing momentum. The poll of tenants within our 95-property, 13 million-square-foot portfolio explores year-to-date performance and expectations for the critical holiday shopping season. As regional leaders in commercial real estate leasing we not only welcome these findings, but look forward to more positive retail trends ahead.

Poll Respondents Expect both Sales and Seasonal Hiring to Rise
An impressive 83.2 percent of our survey respondents project holiday sales to be at the same or a higher level than last year. A full 45.0 percent plan to add seasonal staff – well above the average 29.8 percent reporting seasonal hiring in our prior five Pre-Holiday polls (2011-2015).

LMC President Matthew K. Harding, says strong year-to-date performance is behind retail tenant optimism. In fact, 64.3 percent of survey participants reported year-to-date sales at the same or higher volume than at this time in 2015 – compared to the 2011-2015 polling average of 57.9 percent.

LMC Survey Results Mirror Findings of National Studies
LMC tenants are not alone in their optimistic outlook. The National Retail Federation (NRF) expects sales in November and December (excluding autos, gas and restaurant sales) to reach $655.8 billion – an increase of 3.6 percent over 2015. This compares to a 10-year average of 2.5 percent. Similar studies by the International Council of Shopping Centers (ICSC), Kantar Retail and Deloitte project holiday sales to increase by 3.3, 3.8 and 3.6-4.0 percent, respectively. Further, ICSC reports 91 percent of consumers plan to holiday shop at physical stores.

Survey Respondents Predict Early Holiday Shopping Surge
LMC tenants expect their customers to shop early this year. A full 24.0 percent said they anticipate their sales will peak prior to Thanksgiving. Another 23.5 percent expect their sales peak during the Thanksgiving/Black Friday weekend. The balance of respondents’ expectations for peak sales are spread among early December (12.3 percent), mid-December (18.1 percent) and the weekend before Christmas (16.2 percent). Only 5.9 percent expect their peak sales to fall between the Christmas and New Year’s holidays.

Tech-Stacked Marketing Will Rule 2016 Holiday Shopping Season
Technology-centered marketing remains an ongoing priority, say our survey respondents. The Pre-Holiday survey asked those whose companies are embracing mobile apps, social media, email, texting and other platforms to compare their amount of digital marketing year over year. A full 94.0 percent reported they will incorporate the same or more tech-centered marketing this holiday season.

“This is smart planning,” noted Melissa Sievwright, LMC’s vice president of marketing. “Deloitte forecasts that digital interactions – consumers’ use of digital devices such as smartphones, tablets, and desktop and laptop computers – will influence 67 percent of brick-and-mortar sales during the 2016 holiday season. In turn, our tenants recognize the importance of reaching their customers via digital platforms – both prior to and during store visits.”

Email and Social Media are Top Promotional Channels. In-Store Promotions Include Digital Coupons, Loyalty Programs and Discounts
Survey participants who are actively using technology to reach shoppers outside their stores favor email (74.7 percent) and social media (73.1 percent). Other top channels include text messaging (30.6 percent), banner and other internet advertising (30.6 percent), and digital ads targeted to mobile devices (25.3 percent). For in-store reach, popular tools include digital coupons, discounts, loyalty points and/or rapid payment (73.8 percent); free Wi-Fi (37.8 percent); post-sale online surveys (35.4 percent); and electronic receipts (29.9 percent).

Social Media is Strong Element in Digital Marketing Equation
Facebook reports the holiday season brings more posts, shares and comments than any other time of the year. Deloitte notes that social platforms – such as Facebook and Pinterest – are “shaping what people think a great shopping experience is – a fast, highly-curated assortment with access to visuals, information, and buying sources.”

Among survey respondents, Facebook is by far the most popular social media platform, used by 89.9 percent of those who incorporate social media into their marketing efforts. Other popular outlets included Instagram (40.5 percent), Twitter (33.3 percent), Google+ (27.4 percent) and Pinterest (10.1 percent).

“Social is a vital part of the digital marketing equation,” Sievwright said. “Our tenants are using these channels to announce in-store sales and experiences, and for post-event coverage. Instagram and Pinterest, since they are so visual, are popular choices.” An emerging retail trend to watch: live broadcasts from events on Facebook’s Livestream and Twitter’s Periscope.

For the first time, survey participants were asked whether they are enhancing their social media presence with paid options. Of respondents who use social media for marketing, 37.5 percent indicated they are leveraging opportunities like Facebook’s sponsored content or ads.

Our Retail Sentiment research will continue in 2017. In January, we’ll be gauging retailers’ outlooks for 2017, and in June, we’ll report mid-year progress and explore technology issues.

Outlook on Back-to-School Sales Has Retailers Cheering

Total Volume Projected to Reach Near-Record Levels for the 2016 Season

The school bell is ringing in the second biggest retail spending season of the year. Retail trend watchers are predicting more-than-healthy sales with shoppers in an upbeat mood and retailers and retail real estate companies like Levin are keeping a close eye on the action. The National Retail Federation (NRF) projects that total sales will approach a near-record level of $75.8 billion, up from $68 billion last year. The season began early with shoppers hitting stores and online sites in June, and so far the purchasing pace is strong. We’ll see the full story next month, but for now here’s a look at what’s behind the surge.

More Kids in School: A Retail Trend That Will Continue
As the NRF observed, the children of the first wave of the massive Millennial generation are beginning to swell the school age population, contributing to increased BTS spending (a retail trend that’s expected to continue over the next decade as the Millennials enter the job market and form families).

More Confidence in the Economy
Mid-July’s consumer confidence figures held steady with Americans reporting positive attitudes about the economy. That confidence is reflected in Deloitte’s ninth annual back- to-school survey in which 81 percent of respondents said their finances were better or the same as last year. It’s no surprise then that 39 percent of those polled by the Rakuten Marketing Survey said they plan to spend more on BTS purchases than last year. Depending on the source, the projected average spend ranges from $488 to $673 per K-12 student.

Starting Early, Spending More at Bricks and Mortars and Online
Online BTS shopping continues to climb – projected to expand by 9 percent in 2016. But bricks and mortar stores will continue to dominate, except in the electronics category where online is the top choice. Here’s where US shoppers, who’ve been buying for BTS since June, say they will be spending their dollars:

  • Discounters
  • Department Stores
  • Clothing Stores
  • Online (top of the list for electronic purchases)

Online is expected to continue to play a major role in BTS purchase decisions as shoppers (61 percent) reported in the Deloitte survey that they will research products, compare prices and look for deals online prior to heading out to shop. Fifty percent of those said they will rely on their smartphones when making purchasing decisions.

Free Shipping Will Drive Online Purchases, Store Pick-Up Appeals
According to the NRF, online BTS shoppers are heavily influenced by free shipping. Eighty-nine percent of those surveyed said they reject paying for delivery.

Ordering online with store pick-up was favored by 54 percent of the respondents, while 10 percent (predominantly male) wanted same day delivery.

Apparel Heads the BTS Shopping List, Lunch Boxes and Backpacks are the Most Sought-After Accessories
Clothing, electronics, shoes and supplies are the top categories on 2016’s BTS list. (For high school or college students, electronics lead the pack). Office supply stores and drug stores, long the source of pencils and paper, will likely feel new competition from kits marketed by schools or PTAs.

Topping the trends for elementary schoolers are the once-utilitarian lunch box and backpack, reborn in a wide variety of fabrics and styles. It’s Hello Kitty and My Little Pony themes for girls, while boys are opting for camo and superheroes. High-end backpacks for the elementary set feature LED lights, while packs for computer-toting high schoolers and college students offer multiple pockets for electronic gear and accessories.

Not surprisingly, school-bound girls are going for animal prints and glitter, while boys are opting for Under Armor and Nike apparel. But surprisingly, kids are helping fund their BTS buys. The Deloitte study projects that elementary school students will lay out an average of $20 and middle schoolers an average of $33 for BTS purchases. Is this the influence of thrifty Millennial parents? Stay tuned. And stay tuned as well for the final numbers on BTS 2016.