Indie Retailers and Social Media: Perfect Together?

Retail Trend Watchers Say Social Is Under-Utilized Despite Its Potential
July is Independent Retailer Month, a time to salute those merchants across the country who account for half of the annual total retail sales in the US. If our economy is to stay robust, independent retailers of all sizes need to thrive. For the smaller players in this sector of our industry, social media seems like the magic bullet. It’s pervasive, influential, and inexpensive. In addition, platforms like Facebook, offer pinpoint targeting, that matches messages to prospects.

So why aren’t more indies – especially the “Mom and Pops” – stepping up to social? Roughly one-quarter of independents have no social presence at all, and half of those who do have accounts use them inconsistently or post rarely. As regional leaders in commercial retail real estate, this is a trend we’re watching.

(Read more: https://smallbiztrends.com/2017/03/companies-that-do-not-use-social-media.html)

Why Social Media Matters to Small Businesses
As more consumers flock to social – 81 percent of the US population are on it – they expect to find local retailers there. And they expect those retailers to have websites, as well as social presence. Half the respondents to Time Warner Cable’s Small Business Technology Impact Study said they avoided businesses without websites, believing they are not credible. Thirty percent said they may not buy from a company without a social media presence, with females and millennials rejecting businesses without social at an even higher rate. Fifty percent of millennials stated they preferred businesses with active Facebook pages.

Ninety percent of the small retailers who do use social media are on Facebook. In fact, many substitute their Facebook pages for websites, a solution that, in spite of the platform’s popularity and influence, fails to impress potential customers for whom a web presence signals credibility. Bottom line? Small retailers need to think bigger and go with both a site and social for maximum success.

What’s Keeping Indie Retailers Off Social Media
With so much to gain (or lose) and so much competition, why are some indies ignoring or under-utilizing social? Respondents to the recent Clutch 2017 Small Business Social Media Survey say the primary barriers are the time social requires and doubts about ROI. And a recently released study from Infusionsoft says that half of the small businesses they surveyed had no idea what their ROI was and 14 percent believed their investment in social was not delivering a quantifiable payoff. Still, half said they plan to push forward with their online efforts.

From Special Offers to Personal Stories: Social Is Empowering the Indies
While some are missing out on the benefits of social media, many indie retailers are enjoying brand exposure and growth in traffic – both in-store and on the web. Their tactics include:

Storytelling: Millennials especially respond to the personal stories of entrepreneurs, told on social platforms like Facebook or on a website.

Special Offers: Those old reliable – coupons and special offers – are finding a new life on social.

Seasonal Events: In store-events, promoted on Facebook and sometimes livestreamed, are proving to have strong millennial appeal.

How To’s: Recipes, demonstrations, useful information of all kinds are social gold –

especially in video format on Facebook or YouTube.

Charity Tie-Ins: Socially conscious millennials tend to be responsive to social media-based tie-ins to local charities and community fundraisers.

Dialogue: Website visitors and social media followers alike expect responses to their comments and/or questions. Savvy retailers also monitor the major review platforms like Yelp for mentions of their business. Whether positive or negative, they leave a response.

Mobilization: Mobile technology is shaping the nature of shopping. Responsive design that makes websites mobile friendly is essential. And merchants who offer mobile payment options are cashing in with – you guessed it – the millennials.

Social media is no passing fad. Generation Z, the demographic wave behind the millennials, are true digital natives who live the online life. That includes not just online browsing but discovering and connecting with physical stores in their neighborhoods –

often the indies. And the place where this next generation is most likely to connect is in the palm of their hands – on their phone or tablet. Smart indies will make sure they’re there to meet them.

 

The Mighty Dollars: A Bricks and Mortar Success Story

Retail Real Estate Trend: Will Good Times Be Bad for Bargain

You might call them the mice that roared. They’re the dollar stores – now almost 30,000 nationwide and growing. These price point retailers not only weathered the economic recession but they triumphed, growing their annual sales by 50 percent from 2010-15, compared to the 17 percent notched by retail overall in the same period. And while every week seems to bring news of closing doors and downsizing among bricks and mortars, the dollar niche remains in expansion mode. Dollar General, the top player in this category, is set to open 1,000 new stores this year (that’s 3 per day)! (Read more: http://www.retaildive.com/news/why-dollar-general-will-keep-its-promise-to-build-1k-stores-this-year/434044/)

Demographics Plus Location Equals Dollars for the Dollar Niche
Low- and middle-income shoppers have been these stores’ sweet spot since the first Dollar General opened in 1955 with a variety of wares, all below a $1 price point. As more retailers joined the bargain bandwagon, a location strategy emerged: cluster the stores within a small range for maximum ease of access. It was the reverse of Walmart’s centralization strategy. Consumers who must economize on gas or who rely on public transportation can always find a dollar store close to home or work. The convenience factor also proved a powerful draw for time-starved shoppers at higher income levels.

Not Your Grandpa’s Dollar Store
The crash of 2008 that brought misery to merchants nationwide was a boon to the category. The newly price-conscious turned to the dollars and the stores responded to that rush by pushing their inventories beyond novelties, out-of-date seasonal decorations, discontinued brands and basic staples. To meet the needs of a new class of bargain hunters, they improved their product mix, while retaining their original “treasure hunt” appeal. Consumables – food, household paper goods and cleaning products, health and beauty aids and tobacco products – now comprise three-quarters of the average dollar store’s inventory. Some dollars have added frozen meals, and prepared sandwiches. And 99 Cents Only’s website promises “Fresh produce daily.”

Bargain-priced consumables have drawn another new demographic to the dollars: Millennials. Known for their thriftiness and their preference for experiences over possessions, these sought-after consumers are among the dollar stores’ most loyal customers. In fact, NPD Group reports that at the three biggest dollar chains, 25 percent of purchases were made by Millennials from $100,000-plus households.

Dollar Stores Continue to Boost Commercial Real Estate
Shopping centers shared in the success of the dollar store niche during the recession and that positive connection continues. We are pleased to have 16 dollar stores in our portfolio, all representatives of the major chains. Dollar stores typically seek ten-year leases on 8,000-12,000 SF spaces in properties with strong anchors and high traffic counts. Their solid financial positions and brand names plus their ability to pull in shoppers make them ideal tenants.

Retail Real Estate Trend: The Growth Pace of Dollar Stores May Ease
As the economy strengthens, retail trend watchers predict that in the dollar store category new challenges may cool the growth of dollar stores. Will consumers become less interested in bargain hunting? Will the reduction in SNAP benefits curb less affluent shoppers? Will some stores fall victim to the saturation of these retailers in certain areas and end up cannibalizing each other? What about competition from drug stores who now compete with the dollars in the food and beverage categories? Will Amazon finally chip away at the dollars’ convenience appeal with its same-day delivery of low-priced consumables? (Read more: http://www.cnbc.com/2016/03/21/when-1-can-be-much-more-the-dollar-store-divide.html)

On the positive side, the dollar stores stand to remain immune to the threat of online among their original sweet spot – the less affluent household who does not typically shop online. Their low overhead and the minimal investment required to open a new store are also strengths. And then there’s the loyal Millennial consumer segment. Dollar General, the category leader, just launched a new smaller-store concept catering to the taste and needs of urban Millennials.

We’re keeping an eye on this category. These were the big bricks and mortar bright spot of the last decade and we’re not likely to bet against the dollars.

Pop-Ups are Bringing Excitement to Brick and Mortar Retailing

No Longer Just a Retail Trend, but a Way to Build Traffic and Brands
They began popping up in the bleak days of the last recession when shopping was dormant and retail vacancy rates reached 13 percent. Their focus was typically seasonal and their leases were temporary but they helped many a retail property manager survive the downturn. But the pop-ups didn’t fade away when the economy bounced back. In fact, these stop-gap stores have evolved into a $10 billion industry that some retail trend watchers say can help bricks and mortar merchants counter their online competition.

Pop-Up Retail: Custom Made for the Experience Economy
No longer just sellers of Halloween costumes or holiday decorations, pop-ups now provide innovative, sometimes daring, ways for retailers and brands to lure shoppers (especially experience-seeking Millennials) away from their screens. These temporary retail outposts sprout in urban centers, in malls, galleries and public spaces and in unexpected venues like barges, buses, even shipping containers. Known for pushing the envelope of retailing, they rely on the elements of novelty and surprise not associated with traditional stores. Read more: http://popupinsider.com/pop-up-phenomenon/

By now, virtually every brand category has at least dabbled in pop-up retailing. From big names like Nike, Reebok, Levi’s and Samsung to avant designers like Comme des Garcons to newcomers like Etsy artisans, looking to test the market, all have gone the pop-up route. Target has used the pop-up concept repeatedly for cause marketing and to promote its top product lines. eBay stepped out of the virtual world with Showhouse pop-ups decked out in furnishing and accessories available for online bids. Then there’s the Meow Mix Cat Cafe for cats and their humans, which set up temporary residence on Times Square. The creativity shows no sign of stopping.

Traditional department stores have joined the pop-up phenomenon too. Nordstrom turned the concept around with Pop-In @ Nordstrom, where select branches play host to new designers and product purveyors, some chosen because they are usually unavailable in the local market.

What Makes Pop-Up Retail So Hot? Fun and Exclusivity
With their ingenious presentations and unexpected venues, pop-ups offer something absent from the typical shopping experience: fun. When Pop-Up Republic, a specialty marketing and management company, conducted a recent survey, they found that 30 percent of pop-up customers were looking for fun in their shopping experience. Besides fun, pop-ups deliver a sense of exclusivity. Merchandise is often new to the market, making buyers the first to own it. And since the stores operate on a temporary basis, opportunities to acquire merchandise or experience the environment are time-limited –also contributing to a sense of exclusivity. Read more:

https://www.shopify.com/enterprise/91139206-why-pop-up-shops-are-the-future-of-physical-retail

Besides generating sales, pop-ups are attention magnets, capturing both news coverage and social media comments. Marketers are increasingly making them an integral component of their overall advertising initiatives.
More than a Retail Trend: Count on Pop-Ups to Keep Popping Up
Yes, those temporary tenants from a decade ago have morphed into a thriving sector of the retail industry. They are supported by specialty architects and designers like Lion’Esque Group, global consultants like Retail is Detail, and real estate firms like Storefront that match pop-up retailers with available space. And having put fun into shopping, they may be just the boost the old bricks and mortar world needs right now.

After a Strong 2016, Our Retail Tenant’s Outlook is Optimistic

Annual LMC Outlook Survey Reveals Growth Trend, Continued Evolution
Retailers in our 95-property, 13 million-square-foot shopping center portfolio are feeling good about the future. In fact, three quarters (74.5 percent) of respondents in our annual Retail Sentiment Outlook Survey of store managers are optimistic about their anticipated 2017 performance – the highest percentage in the January poll’s six-year history. As a regional leader in retail real estate, this is the kind of news we love to hear.

Survey Respondents Report Record Sales Performance in 2016; Bricks and Mortar Stores Continued to Attract Shoppers
According to our President Matthew K. Harding, the percentage of respondents reporting 2016 sales at the same or higher level (68.8 percent) was the highest in Outlook survey history. Our finding reflects a positive year for retail nationwide. According to the U.S. Department of Commerce, 2016 retail sales rose 3.3 percent over 2015; for context, 2015 retail sales were up 2.1 percent from 2014.

The holiday season yielded a record performance, too, with survey respondents reporting sales and shopper traffic at the same or higher level than last year. These were the strongest in survey history at 75.6 and 74.4, respectively. “Industry experts agree that the recent holiday season was good for retail, yet some have indicated e-commerce was the real winner over bricks and mortar,” Harding said. “From a ground-level perspective we are seeing a different story – one illustrating the ongoing relevance of physical stores in our portfolio, which is comprised mostly of open-air shopping centers.”

Supporting our findings, the International Council of Shopping Centers (ICSC) in its Post-Holiday Shopping Survey found consumers spent an average of $711 on gifts and seasonal items during the holidays – a 16 percent increase over 2015’s post-holiday survey results. Further, ICSC reported 91 percent of holiday shoppers spent at bricks-and-mortar locations.

Expansion Plans Are Heating Up:  A 2017 Retail Trend to Watch
When we asked survey participants about their companies’ expansion plans for 2017, more than one-third (35.1 percent) indicated their brand plans to open additional stores.

“Again, our findings may seem to counter current headlines reporting ongoing store closings by major retailers,” Harding said. “But in the 65 years we’ve been leasing and managing retail properties we have witnessed the ongoing transformation of retail. Ultimately, concepts come and go, creating opportunities for new and expanding players. Today is no different, and our tenants are proving this point.”

Qualified Job Candidates: Retail Is Facing a Growing Scarcity
The decline in unemployment and its impact on retail hiring also was addressed in the Outlook Survey. Only about one-quarter (23.6 percent) of respondents have seen changes in the hiring climate related to the tightening jobs market. Of that group, more than half (51.7 percent) indicated they are seeing fewer applications from qualified job candidates, and nearly half (46.6 percent) said they are experiencing demand for higher starting salaries.

Tenant Business Models Are Adapting to Impact of E-commerce
The e-commerce phenomenon – and its impact on bricks-and-mortar – has remained top-of-mind for us. As leaders in retail real estate we are continuing to gauge how our tenants are taking competitive action. In the 2017 Outlook Survey, we asked our tenants how they have adapted their business models in response to e-commerce’s growth.

Marking a notable jump from the last two times the question was asked, 55.2 percent of survey participants indicated they have adapted in some way. This compares to 38.2 percent of respondents in the 2016 Mid-Year Survey and 37.3 percent at mid-year 2015. Among that group, our retail tenants have:

  • Added in-store services and/or incentives (50.9 percent).
  • Added in-store pickup and returns options for purchases made online (37.9 percent).
  • Increased coordination between online and bricks-and-mortar operations (30.2 percent).
  • Added “experience” draws such as demonstrations, classes, performances or other in-store events (28.4 percent).
  • Altered store inventory, such as having fewer in-stock SKUs or larger quantities of popular items (25.0 percent).
  • Altered store prototype, such as reducing store size or increasing focus on showrooming (17.2 percent).

In turn, 57.5 percent of the respondents who have adapted in response to e-commerce say they have seen a benefit in terms of sales and/or in-store traffic. That percentage compares to 43.0 percent at mid-year 2016 and 52.1 percent at mid-year 2015.

“In our last two mid-year surveys, about one-third of tenants (32.9 percent and 30.9 percent) were unsure of whether their efforts were making a positive impact,” said Melissa Sievwright, vice president of marketing. “The number shrank to less than a quarter (24.4 percent) in the 2017 Outlook Survey, indicating that tenants are beginning to see more measurable results.

“This is very good news in an environment requiring retailers to continually reinvent themselves,” she added. “We anticipate continued changes as our tenants strive to establish the best mix of services and incentives, and elevate and personalize the shopping experience to draw customers into their stores.”

Can Pokémon Go Keep Retail Sales Hot Through the Holidays?

Retail Trend Watchers Are Eyeing the Staying Power of Pikachu and Friends
This was the Summer of Pokémon. Within days of its debut last July, Pokémon GO, the augmented reality game was breaking records and setting new ones. In just five days, it became the most popular game in mobile history, with its free downloads eventually reaching 500 million. While the action was concentrated among Millennials (who grew up with Pokémon), teen users were spending more time hunting Pokémon characters than posting on Twitter and Instagram combined. Females, traditionally a smaller segment of gamers, stepped up to Pokémon GO, becoming 40 percent of the user population. Since the game forced players off the couch and into the outside world, there were unintended consequences. Some, engrossed in the hunt, were robbed. A number were arrested for trespassing. Many got traffic tickets, and a few even fell off cliffs.

Pokémon GO Fans Have a Hearty Appetite for Branded Merchandise
When fans weren’t catching and training the elusive pocket monsters, they were shopping for merchandise that reflected their passion. Online sales of Pokémon merchandise were nothing short of spectacular. According to the Adobe Digital Price Index, sales of Pokémon-branded items rose 105 percent in July, compared to the previous year, with the hottest items being video games, toys and t-shirts. But what’s next? Can the frenzy continue into the holiday season? Will bricks-and-mortar stores reap the same success as online purveyors of Pokémon merchandise? Retailers have their fingers crossed and retail trend watchers are optimistic.

The Summer’s Frenzy is Cooling, but the Holiday Season Still Looks Strong
Pokémon GO was too hot not to cool down, but even as usage ebbs, the franchise itself remains a powerhouse. Gina Collins, CMO at Build-A-Bear, one of the stores licensed to sell Pokémon merchandise, is bullish on the coming season. “Sales have continued to gain momentum,” she reported. The chain’s inventory of 20th Anniversary Pokémon Pikachu plush dolls has sold out and there are wait lists for the next shipment.

Anthony Morales, assistant manager at Build-A-Bear in Fairfax, VA, reported that more and more customers are hunting Pokémon-themed items. “It feels like the 90’s all over again. We just had a group of kids that got a lot of Pikachu dolls and they were playing and talking in little Pikachu voices,” he told Ad Age.

Pokémon Items are Headed for the Kids’ 2016 Holiday Wish List
Pokémon fans can choose from an abundance of branded merchandise in the coming season: plush toys, clothing, accessories, and action figures, along with the Pokémon card game. Late November will see the launch of two new video games, Pokémon Sun and Pokémon Moon, likely to be best-sellers in that category this holiday.

Toy Insider predicts that “the Pokémon GO craze will command a lot of space on kids’ wish lists.” Their own Hot 20 List for 2016 includes two Pokémon-themed products. At the number nine position is Pokémon My Friend Pikachu (from Tomy) a plush toy that speaks, lights up and wiggles its ears. At position 20 are the soon-to-be-released Nintendo video games Pokémon Sun and Pokémon Moon.

If predictors of retail trends are right, 2016 holiday sales are in for a big boost, thanks to Nintendo’s crew of irresistible pocket monsters.

Back-to-School Retail Season Looks Like Something to Celebrate

Fastest Rate of Growth in Four Years Was Driven by Electronics and Discounters

Early numbers are in for the 2016 BTS shopping season and retailers have something to cheer about. Though August retail numbers slipped a bit (down 0.3 percent), BTS sales were strong. Retail trend watchers and managers of retail real estate alike can’t help but be cheered by the activity during this second biggest shopping period of the year.

Will BTS Sales Meet the NRF’s 2016 Projection of $75.8 Billion?
Though not all the numbers are in yet, a recent report from Reuters says that 2016 BTS spending grew at its fastest rate in four years. According to statistics from First Data, sales rose 2 percent in July vs. 1 percent in 2015 and 2014 and just .2 percent in 2013. The NRF’s $75.8 billion projection for the BTS 2016 may be realized.

Good Weather and Optimistic Outlook Brought in the Shoppers
Better weather than in recent BTS seasons brought a wave of shoppers into stores. Many of them were searching for bargains – especially parents of young children. These are the thrifty Millennials, who came of age in lean times. “Income rises faster than frugality changes,” one retail analyst suggested.

Electronics Were the Hottest Items on the 2016 Shopping List
As expected, the big-sellers could be found in the electronics category. Electronics and appliance sales have been climbing in 2016 – their sharpest ascent in four years, according to First Data. BTS shoppers went for tablets and USB drives, especially if those items were bundled with special offers. Best Buy’s aggressive offers and coupons delivered strong sales. Items geared for dorm life were among the big winners.

Gap Recovers and Fast Fashion Outposts Score Big
Gap gained traction during the BTS season, leading to thoughts that its troubles may be behind them. Low-priced, fast fashion stores like Old Navy, T.J.Maxx and Marshalls delivered strong numbers, too. Chief Industry Analyst-Retail at NPD Group, Marshal Cohen credited the numbers at these stores to youngsters who will accept shopping at lower-priced retailers because they can get “more stuff.”

Whatever the reason for surging sales, retailers are closing out a banner season – the best in a long time. Now, all eyes are on the winter holiday ahead.

A Facelift Can Put Bricks And Mortars Ahead of The Game

Retailers May Be Neglecting Their Strongest Competitive Advantage

Digital technology has transformed our industry – some might say disrupted it – along with just about everything else in contemporary life. Retailers, over the last few years, have risen to the challenge of their online competitors with major investments in omnichannel. But have all those dollars poured into online come at the expense of the retailer’s biggest asset: the bricks-and-mortar store? This provocative question was recently raised by Antony Karabus, CEO of Hilco Retail Consulting, in a recent article in Women’s Wear Daily. He gave us cause for some thought.

Investing in Bricks: Is a Retail Real Estate Trend Emerging?

Karabus maintains that bricks-and-mortar retailers “consistently underestimate the enormous advantage they have relative to their ecommerce counterparts, in particular their physical brand assets.” A bricks-and-mortar store, he goes on to say, satisfies the consumer’s innate desire to interact with merchandise in an inviting environment. Yet, according to a survey of the CEOs and CFOs of top retailers conducted by Hilco, only 20 percent are investing capital in their stores. Forty percent of the stores in Hilco’s study, in fact, had not been remodeled in a decade.

The vast majority of retail sales still occur in stores rather than online. The most recent statistics from the U.S. Commerce Department show online sales accounting for 6.8 percent of total third-quarter retail sales. Online is growing at a steady pace, but Forrester Research projects that by 2018, it will still represent only 11 percent of total annual sales. Still, leading retailers remain fixated on tech – perhaps at the expense of their physical brand, which is the chief driver of revenue.

An Experience Technology Can’t Match…Yet

Steve Barr, U.S. Retail and Consumer Leader at PricewaterhouseCoopers, echoes Karabus’ views on the overlooked value of bricks. “There are reasons people are still going to the store – it’s accessible, people can see and feel the product, try on merchandise, see what a room set looks like. It’s a very visual experience that can’t be replicated through even the best online tools,” he told Retail Dive earlier this year. He added this caveat: “Retailers are going to need to adapt the physical store to stay relevant and compete with online retailers.”

Levin’s President Matthew Harding agrees that while a strong online presence is vital, retailers can’t afford to ignore their physical stores. “As a leading retail real estate company, we’re naturally concerned about the physical appearances of the tenants in the centers we manage. The look of a store is a valid concern for any retailer. Many of ours are doing an outstanding job. A good example is ShopRite. They’ve created high-quality environments for grocery buyers. Pier 1 Imports is another good example. I’ve seen some great interior and exterior remodeling of their stores. They’re driving more traffic because of their fresh, new look. Shoppers are drawn to novelty.”

Retailers Who Find the Right Balance Will Own the Future

Bricks and clicks need to be brought into balance, according to Karabus, who insists that success will come from serving customers “consistently at all touch points (online and in-store) however and whenever they want to interact with a retailer.” Bring stores up to meet the expectation of today’s savvy consumers, he urges. Merchants who do so will reap dividends. “The prize,” he predicts, “will be huge when retailers find the right balance of capital spending.”

U.S. Consumer Sentiment Bodes Well For Holiday Sales

NRF Projects Rise of 3.7 Percent over 2014; All Eyes on Black Friday

According to a recent NPD Group survey of 3,600 adults, U.S. shoppers are looking forward to the winter holidays this year. Eager to catch a break from “what’s going in the world” and wanting “to give to the less fortunate” are the main reasons given for the positive sentiments. Whatever’s behind their holiday outlook, 15 percent of those surveyed plan to spend more than last year and 16 percent plan to spend less (down from 20 percent in 2014). That’s the smallest gap between the two groups in the last three years. The glass looks half full as we head into the make-or-break season, and as a leader in retail real estate, we’re watching for the opening salvo – Black Friday – and what it might indicate for the final stretch of 2015.

Modest Rise in Holiday Sales Projected by Major Retail Trend Watchers

After a sluggish 2015, will retailers get a rush of spending in the year’s closing weeks? The National Retail Federation has projected an increase of 3.7 percent, totaling $630.7 billion in sales for November and December and slightly below last year’s 4 percent advance. Deloitte LLP is more optimistic, predicting an upward tick of “as much as” 4 percent. Alix Partners’ view is more sober at 2.8 to 3.4 percent. Whichever number eventually materializes, it seems that the retail trend toward bargain-hunting will continue, with buyers as the ultimate winners.

“Americans remain torn between their desire and their ability to spend. The fact remains that consumers still have the weight of the economy on their minds,” said NRF President Matthew Shay. Despite low energy prices and a strengthening job market, the economy is not in full recovery and not all boats have been lifted by the rising tide. Stagnant hourly wages at the lower end of the economic spectrum have restrained a substantial segment of consumers.

PwC describes today’s shoppers as divided into two groups: “survivalists” and “selectionists.” The border between the two is a household income of $50,000. Those below that mark will seek bargains this holiday season, planning to spend $631 less than last year. Those above, who are planning to boost seasonal spending by $1,331, will gravitate toward personal electronics and experiences (travel and entertainment). But, because of the power of the Internet, shoppers in both groups will be able to search for and find the best deals for almost everything on their wish lists, using dozens of websites with up-to-the-minute news on Black Friday specials.

Once a Retail Trend, Now a Retail Institution, Will Black Friday Bounce Back from 2014s Fall-off?

The winter holidays are a crucial season for many retailers, with the major chains dependent on November and December activity for as much as 30 percent of their annual sales. Black Friday, the unofficial opener to the season, holds special significance. A consistent winner for the past dozen years, Black Friday’s sales fell off 11 percent in 2014, with four-day total sales of $50.9 billion, down from $57.4 billion in 2013. This includes both in-store and online.

Amazon Will Open the Season on November 1, But Wal-Mart Will Finish on Top

No retailers are waiting for the day after Thanksgiving to launch holiday promotions. First out of the gate on November 1 will be Amazon with its “Countdown to Black Friday” promotion. From there, the frenzy will continue, peaking on Black Friday but continuing through the holiday weekend before slipping into online’s own Cyber Monday.

If Black Friday itself turns in a disappointing performance, trend watchers say, it will likely be the result of a time frame that has stretched from one day to two to now a full month. BestBlackFriday.com, a website that tracks seasonal retail activity, predicts that Friday sales will slip 3.3 percent to $8 billion. Thanksgiving Day will get a bump of 18.8 percent. Together, the two days will see online sales up 33.3 percent from 2014.

As Black Friday 2015 becomes retail history, promotion will continue to surge from Cyber Monday to Green Monday (the second Monday in December), all the way to the final holiday shopping week, when in-store sales are expected to spike. At the season’s end, retail watchers predict, Wal-Mart will emerge the big winner. Its multi-channel strategy includes their one-hour in-stock guarantee policy, online exclusives on a powerful website, and irresistible in-store pricing on the hottest holiday items.

Interested in more trends and predictions for Black Friday, visit: http://www.twice.com/news/statistics/top-10-black-friday-2015-predictions/58759.

A&P Bankruptcy Opens a New Era in Retail Real Estate

New Opportunities Ahead for Shopping Centers in Northeast U.S.

We recently saw the end of a long chapter in American retailing when the parent of the iconic A&P brand filed for Chapter 11. This is the second time in five years that the quaintly named Great Atlantic & Pacific Tea Company (now a division of Montvale-Para Holdings) has entered bankruptcy proceedings and it looks as though this is the end of the line. Once the Wal-Mart of its day, A&P created the supermarket concept in 1936, bringing a diverse inventory at low prices to a mass market and becoming the world’s largest retailer. There are many reasons for its demise, including a string of strategic blunders, and we can count on the media to deliver a full autopsy soon. But from my perspective, the primary failure of the 156-year old retailer was remaining static while the world was changing. A&P tried to retain its classic retailing model in the midst of a dynamic and robust competitive landscape of supercenters, dollar stores, convenience stores, and discounters. At the high-end, Whole Foods, Fresh Direct, and new concepts like Amazon Fresh and Blue Apron were staking their claims. In the middle, retailers such as ShopRite and Stop & Shop reinvented and modernized their stores. In an industry with razor-thin margins, the competitive squeeze was too much.

Whats Next for Grocery-Anchored Shopping Centers Post-A&P?

In a recent article, USA Today said “A&P’s biggest asset may be its real estate,” which includes A&P, Pathmark, Waldbaums, SuperFresh, Food Emporium, A&P Liquors, and Best Cellars stores. This puts the spotlight on the shopping centers of the Northeast region of the country, where most of these stores are located and where our portfolio is concentrated. It appears that Stop & Shop, Acme and Key Foods have struck deals on 120 of the locations. A&P has said it will close 25 stores, which leaves 176 on the block. Lots of retail real estate trends are in the making.

As leading retail leasing advisors, our Levin team sees the A&P bankruptcy as signaling a new paradigm. We’ve found that retaining competitive advantage following a change in a retail anchor tenant requires both strategic rethinking and capital infusion. Retenanting and repositioning is a constant factor in effective asset management. It’s part of the game plan for success in our dynamic retail real estate industry. Sometimes a bankruptcy is the driver, sometimes other factors are at play. Whatever the impetus, these are situations that present opportunities for reinvention and growth. And in a market that’s got plenty of post-recession momentum going, there’s cause for optimism in the face of anchor changes. It’s much too early to get specific about the effects of A&P’s passing, but the takeaway here is that one of the few things we can count on is change.

RECon 2015 Takeaway: Retail Real Estate is on the Rise Again

Keen Appetites for Value-Added Investment Set the Tone for Annual Las Vegas Gathering

With 35,000-plus attendees thronging last months ICSC RECon event in Las Vegas, it seems safe to say that commercial retail real estate is roaring back from the Great Recession in a big way. Its not just the number of attendees that impressed us but the amount of new blood among them and the intense deal-making mood that pervaded the convention center.

Solid Retail Fundamentals Are Driving the Market on Multiple Levels

Yes, weve seen more attendees at past RECons (the record is 50,000), but weve never seen one of these shows with more capital aggressively chasing deals. Frothy would be a good word to describe the acquisition-oriented activity. The big institutional investors, many of whom we advise, were in a bullish state of mind and on the hunt for high quality, core retail assets as well as core plus and value-added retail properties. In addition to dominant grocery anchored centers, power centers and properties that feature category leading brands and credit tenants are in strong demand.

Ground up development was also drawing its own healthy slice of investor attention. For the first time since the slump began, there is a pipeline of significant development money, which is good news for the construction management team at Levin. Behind all this investor interest is the growing strength of retail fundamentals, particularly in the top-tier markets, which are typically the under retailed, high barrier to entry markets as well as the growth markets.

RECon, As Usual, Reveals Retail Real Estate Trends: Mixed Use, Hot Markets, New Retail restaurant and Entertainment Concepts and Smaller Footprints for Big Box Tenants

Trend watchers always like to keep a sharp eye on gatherings like RECon, scanning the scene for the next big thing. The 2015 event yielded some hints about new industry directions, most of which have been evolving for some time. The biggest driver of change in retail; online shopping, is now a firmly entrenched consumer habit and retailers and retail real estate owners and managers continue to struggle to pry people away from their screens and back into bricks-and-mortar venues. So we see both new retail development and renovations to existing shopping centers that include new restaurant and entertainment concepts, cinemas, and event spaces joining the line-up of traditional retail stores. Mixed-use development is also a focus. Experimentation is the name of the game here, as developers search for the right mix of retail, restaurants, entertainment, residential and/or office uses, and tackle the subtle nuances of pedestrian traffic patterns and tenant positioning. Success in mix use, many are finding, depends on the dynamics of the individual market and thats not something that lends itself to a template or formula.

The retail real estate sector is nothing if not dynamic, and change tends to involve responses to new trends. Wal-Mart and Target, for example, are adjusting to unique environments, particularly the dense urban markets as well as to continued competition from the extreme discount grocers and dollar stores with smaller footprints and new concepts. Expect to see the continued rollout of The Wal-Mart Express convenience stores and The Neighborhood Markets, with emphasis on groceries.

All in all, RECon 2015 was a testament to the resiliency of our industry and a cause for optimism. We are on a roll!