May 31, 2017
LAS VEGAS—In a panel titled “The New Power Couple” at the recent ICSC RECon event, panelists addressed the need for retail destinations and retailers to work together more closely in order to deliver efficient, engaged, and successful retail communities. They noted the importance of communication between developers and retailers and discuss strategies and tools for building powerful and effective relationships.
According to moderator David Fuller, Group Digital Director at Toolbox Group, the landscape has changed. “Retail has changed. Developers can no longer just build malls with endless retailers filling them. The way it used to be was that the market was developer led. That isn’t the case any longer.”
Fuller pointed out that technology has changed the shopping journey. “We have become more connected through digital communication. Sharing intelligence is key,” he said.
Panelist Aaron Farmer, SVP of the Retail Coach, out of Dripping Spring, TX, explained that it is a changing retail world and you can just tell that by walking the halls of the ICSC RECon halls. “Retail is evolving. We are seeing online stores taking a big chunk of the market. National retailers that have brick and mortar stores are having to evolve.”
The four major trends he says is having an impact on the industry include: Trump; Millennials; the economy; and the encroachment of e-commerce.
According to Farmer, 91% of retail brands use two or more social media platforms. “The average American is checking their social media platforms about 17 times a day and honestly, I think that number might be a little low. There is a huge amount of opportunity there.”
He pointed out that the average millennial is spending about $2,000 online every year. “Figuring out a way to capture that is key,” he said. “We are seeing this affect many familiar brands. Staples, Walmart, Macys, Sears, Nordstrom…A lot of impact there as far as stores closing, but we are seeing these national retailer online sales go up but they are shrinking the size of their retail stores. We are seeing some retailers disappear, but most are just shrinking the size of their store.”
Jillian Mariutti, director at Mission Capital Advisors, recently chatted with GlobeSt.com and noted that while the rapid growth of online shopping has dominated the retail buzz for quite some time, but beyond that Millennials, which account for more than 88 million people, still don’t have the earning power as Boomers or Generation X. “As this massive demographic matures, they’re likely to have a large impact on the retail industry,” she says.
From a financing standpoint, Mariutti tells GlobeSt.com that the continued strong demand assures that well-located, new retail properties have a high likelihood of succeeding. “TJ Maxx, Marshalls, Ross, H&M and Burlington, which have mastered the impulse buy that has allowed them to flip merchandise very quickly, are a paradigm for retailers that show you can still succeed even as shopping habits evolve.”
GlobeSt.com also recently spoke with retail expert Michael Lefkowitz, Member, Rosenberg & Estis, P.C., who said that “Retail real estate is in flux nationally and in New York City, and the retail industry is currently working through a reset as bricks and mortar evolve to accommodate the online sales phenomenon. However, retail will remain a critical component of the real estate environment and our local economy,” he said. “Shopping as entertainment is a fundamental part of our culture, and the retail industry will adjust to provide consumers the experience they desire.”