Our Annual Pre-Holiday Poll Shows Rapid Adoption and Adaptation of Technology by Retailers

Technology innovations, once seen as a fad and then a threat, are now an integral part of retailing. As tech continues to transform our industry, it appears that bricks-and-mortar stores are leveraging the benefits of online and mobile platforms, while adapting to the new consumer landscape. Our annual pre-holiday Retail Sentiment Survey of store managers in our 95-property, 13 million-square-foot shopping center portfolio reveal strong adoption of mobile technology as an integral part of the marketing mix and notable operational changes in response to an increasingly e-commerce-centric world.

Like most of the industry, we’ve accepted the fact that technology innovations have firmly entrenched themselves in how retail is run today. No longer just a retail real estate trend, the use of tech is now an established way of doing business. That said, the speed of adoption – and adaptation – reflected in our survey is truly eye-opening.

Majority of Our Respondents Say Mobile is Part of Their Marketing Mix
Simply put, mobile marketing has arrived! The majority of our surveyed store managers – 85.3 percent – indicated they are using this platform in their marketing mixes. This figure is up from 68.0 percent just one year ago and 52.6 percent in 2012. And of those respondents who have been employing mobile technology for at least a year, 53.4 percent indicated that they are using this tool to a greater extent in marketing for the 2014 holiday season than in 2013.

The embrace of mobile marketing goes far beyond our survey. In Accenture’s latest Holiday Shopping Survey, 76 percent of participants “said they would definitely use or would be willing to try mobile services that provide them with real-time promotions and offers as they shopped in-store if those services were offered.”

In-Store and Online: A New Symbiosis, the Next Retail Real Estate Trend
For the first time, our survey asked participants whether their company has adapted its business model in response to the growth of e-commerce. The conversation has moved on from whether e-commerce is impacting bricks-and-mortar stores to how those traditional stores are changing in order to prosper in an increasingly online shopping-centric world. We were encouraged by the responses we got.

In fact, 44.0 percent of survey participants indicated that their organizations have changed to accommodate e-commerce in some way. These adaptations included increased collaboration between in-store and online operations (54.4 percent), added in-store pickup and return options (41.3 percent), altered in-store inventory (34.8 percent) and altered store prototypes (23.9 percent).

To us at Levin, that looks like retailers are making multiple changes as this new environment evolves. We like that the “increased collaboration” response garnered the highest percentage because it indicates that the relationship between online and in-store is becoming more symbiotic. And that’s a good thing.

The melding of online and in-store (the omnichannel model) promises to benefit retailers this holiday season. According to Accenture’s study, 71 percent of shoppers surveyed plan to research purchases online and then make them in stores (“webrooming”), while 68 percent say they will go to see products in stores and then purchase them online (“showrooming”).

Opening “The Front Door to the Store” with Mobile and E-Commerce
The benefits of omnichannel retailing, where companies balance the benefits of online and in-store experiences, and its potential are significant. A recent Harvard Business Review blog does a great job of summarizing this phenomenon. It reads, “websites and mobile apps are not just e-commerce ordering vehicles, they are front doors to the stores. Stores are not just showrooms, they are digitally-enabled inspiration sites, testing labs, purchase points, instantaneous pick-up places, help desks, shipping centers, and return locations.” We at Levin could not agree more.

Our next Retail Sentiment Survey will be conducted in early January, gauging 2014 holiday sales performance. We’ll be sharing the key results here on our blog.

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About Matthew K. Harding
Matthew K. Harding, CCIM, has been affiliated with Levin Management since 1986. He originally handled leasing of the Levin portfolio as Executive Vice President at Paul Lawrence Realty Associates for 10 years. Matt joined Levin’s in-house team in 1996 as Senior Vice President/Deputy Chief Operating Officer, overseeing leasing operations while supervising company management and administration. He assumed his current title in 2001 and, since then, has guided the strategic growth of Levin’s management and leasing portfolio. He also serves as a member of the firm’s Board of Directors. Matt earned a bachelor’s degree in Economics from Hamilton College. A Certified Commercial Investment Manager (CCIM), he maintains memberships in the ICSC and the Commercial Investment Real Estate Institute.

Retail Real Estate Trends: In-Store Restaurants and Hip Hybrids are On the Rise

High-End Cuisine and Artisanal Coffee Draw Customers, Boost Sales

The grand department stores of yesteryear – Marshall Field’s, Hudson’s, Wanamaker’s and others – always featured a “tea room” where elegant ladies could enjoy refreshments during shopping sprees. Over the decades, in-store food service has changed, along with shopping styles, but it’s never gone away. Today, Starbucks keeps Target shoppers caffeinated, McDonalds fortifies bargain-hunters at Wal-Mart and Ikea continues to serve up Swedish meatballs and other Nordic favorites. At the higher end of the shopping spectrum, Nordstrom operates multiple restaurants throughout its chain, boasting a total of seven different food service concepts and 200 eateries and coffee bars in its properties. Still, new food-related retail real estate trends keep emerging –and they’re definitely not your grandmother’s tea room.

Department Stores, Branded Shops Build Traffic with Quality Food and Drink

When Fodor’s, the venerable publisher of travel information, starts listing the 10 best in-store restaurants, it’s a sign that store-based dining has reached both a critical mass and a quality high-point. On the retail real estate NYC scene, big name chefs like David Burke preside at Bloomingdale’s. Hip restaurant brand Momofoku Milk Bar operates out of Soho’s Band of Outsiders boutique – right in the front window. Lord & Taylor shoppers can take a break at branches of Sarabeth’s. Ralph Lauren recently joined in with a main level coffee bar (featuring Lauren’s own brand of beans) and a full-service restaurant upstairs at its Fifth Avenue flagship. Among the latest to join the in-store food trend is Urban Outfitters, who opened a three-floor venue on Herald Square in June –the largest in their 400-store chain. A main floor feature is an outpost of Intelligentsia Coffee of Chicago, “designed to serve an ocean of coffee to thousands of passers-by each day.”

At Tommy Bahama’s “Lifestyle” Stores Food and Drink Reinforce the Brand

A brand-oriented take on the in-store food service trend in retail real estate is Tommy Bahama’s Island concept. The resort-themed menswear company has launched 13 “Island” stores, where shoppers find an immersive environment that includes tropical cocktails and menus, a perfect backdrop to the brand’s beach-y fashions and accessories. Tommy Bahama reports that its “Island” stores, located in such venues as The Woodlands Mall in Dallas, Corona del Mar Plaza in Newport Beach, and Scottsdale’s Kierlands Commons, generate two and a half times the sales per square foot as their other 97 locations.

At Hip Hybrids, Store and Restaurant Merge for a Single Customer Experience

Saturday’s Surf may have launched the hybrid trend in NYC retail real estate. The five-year-old Soho-based boutique (now with three additional locations) offers surfboards, accessories and a full line of surf-inspired menswear. Its artisanal coffee bar is integrated into the selling floor. Co-founder Josh Rosen, who is expanding into new markets, insists that coffee is so essential to his business that any new leases must permit beverage service. Management at Shinola, a Detroit-based merchandiser of watches, bikes and accessories with shops in NOHO and Tribeca, second Rosen’s sentiment. “Sights, sounds, and smells of a café bring a no-fuss feeling to a luxury goods store,” they said in a recent statement.

Custom-brewed coffee, along with craft beers, is fueling the success of lifestyle retailers on the West Coast, who, like Saturday’s Surf and Shinola, merge merchandise and refreshments in a single space. In Portland, Velo Cult, which purveys bikes and all things bike-related, relies on the “nerdiest black coffee around” and a menu of local beers, along with live music and film screenings, to pack their “man cave” venue. Seattle-based Chrome Industries, designer and manufacturer of bike-related clothing, footwear, bags and accessories, has six “HUBS” or stores in San Francisco, Seattle, Portland, Chicago and recently New York City. San Francisco’s famed Blue Bottle Coffee is the go-to beverage and like Velo Cult, music and screenings are key parts of the mix.

What’s this latest in-store eating and drinking trend all about? Beyond attracting and satisfying the customer, there’s doubtlessly the recognition that in-store amenities like high-quality coffee and unique menu options enhance the shopping experience beyond just browsing and buying. Shopping centers with a rich tenant mix have picked up on this retail real estate trend, just as urban stores and boutiques have. Here’s a powerful competitive edge that online can’t match.

Levin Property Managers Name Their Favorite Tech Tools

Tablets, Numbers App and Paperless Invoicing Lead the List for Efficient Real Estate Property Management

Recently Levin asked the Property Managers of our 95 retail real estate sites how technology has made them more efficient. Which tools are indispensable in delivering top quality property management services? How has tech helped them cut costs and save time? We’d like to share the responses with you. First, we’ll look at the four tech products that make our managers’ jobs easier and second, we’ll see what tech innovations are making Levin’s retail properties operate more efficiently.

iPads, Tablets are Indispensable to Real Estate Property Management Today
It’s not always the latest piece of tech innovation that makes the list of favorites. Our Property Managers named iPads and other brands of tablets as the must-have, on-the-job product. First released to the market four years ago (with several updates), these portable computers mean in-the-field reporting can happen quickly and easily. No more taking notes, returning to the office to write them up, and then circulating them. Tablets cut steps and save time.

File Sharing is a Favorite of Levin Property Managers
Dropbox and iCloud, tech tools that allow access to files by multiple parties, are also clear winners among our managers in the field. A recent fire at one of Levin’s properties demonstrated the value of Dropbox. The Property Manager took pictures of the damaged areas with his iPad, then loaded the pictures directly into Dropbox for review by the property owners, their insurance company and any other relevant parties. File storage in iCloud serves a similar purpose, especially among our internal Levin staff.

Spreadsheets Straight from the Field with the Numbers App
Apple’s Numbers app, which works on both iOS and Android platforms, helps our managers create spreadsheets and charts right on their tablets. Easier to use than Excel in a field situation, Numbers has become an essential part of every manager’s tech toolkit.

Paperless Invoicing Means More Efficient Real Estate Property Management
AvidXchange, web-based software for end-to-end invoicing, has streamlined our managers’ accounts payable processing. Everything from the original vendor statement up to its payment is paper free. Processing time, including review and approval, is cut drastically, and the status can be checked on the computer from anywhere. And AvidXchange is fully integrated with Levin’s accounting system. What’s not to like?

Technology is not only making our Property Managers’ lives easier, it’s also helping them run our Levin-managed sites with greater efficiency and lower operating costs. What tech trends are you seeing in Retail Property Management? Please share your comments with us here on Retail Property InSites.

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About Robert Carson:
Executive VP Robert Carson, CSM, oversees coordination for Levin’s client properties and is instrumental in transitioning new management assignments to the Levin team. He plays a key role in the firm’s day-to-day operations, and, as an environmental issues expert, he oversees management of issues such as asbestos in older buildings and specialized tenant uses, like dry cleaning. Carson joined Levin in 1992 as Director of Property Management after serving as General Manager for retail properties owned by Hartz Mountain Industries. Prior to that, he managed an enclosed mall for the DeBartolo Corporation. Carson began his career as a buyer for Gimbels Department Stores. He received a bachelor’s degree in Economics from Indiana University of Pennsylvania and is an ICSC-Certified Shopping Center Manager (CSM).