3 Retail Brokerage Heavyweights Tell Us What to Expect in '16
From the resurgence of smaller retailers to what's next in mobile shopping, big changes are afoot in the retail industry. We caught up with top national retail execs at three of the country's biggest brokerages at this year's ICSC New York to talk about how they expect technology, economics and consumer habits to keep evolving as we head into the new year. Here's what you need to know.
Cushman & Wakefield vice chairman Joanne Podell
As we enter 2016, Joanne says it will be fascinating to watch how smaller-format retailers perform versus flagship stores, particularly those known as fast fashion. They are more nimble and more able to control product flow. In addition, she says these “specialty stores” also have more appeal to Millennials.
Also, keep an eye on the rise of “athleisure” wear: everyone from traditional athletic wear retailers like Nike to fast fashion chains like Topshop and high street brands like Opening Ceremony and Derek Lam are clamoring to get a piece of the action.
Stores such as Lululemon and new entries to retail such as Bandier have made athletic wear day wear. She says brands will continue to grapple with how to best integrate technology as part of their marketing strategies. We’ll see brands continue to refine interactive digital marketing campaigns and apps to support the experience of a physical store.
Colliers International national director Anjee Solanki
Global macroeconomics are impacting retailer sales in the US, perhaps most evidenced by flat in-store sales over the Thanksgiving and Black Friday weekend. Anjee tells us most major markets also have seen a slowdown in tourism spending as currency fluctuations cause a need to pause.
However, restaurant sales saw healthy growth. Looking forward, she expects sales for polished casual and specialty food and/or chef-driven concepts to grow.
Landlords will continue to seek local operators to add to the existing center tenant mix, enhancing the experience. Online spending between midnight and 11am on Black Friday was up 15% compared to 2014, per Adobe’s e-commerce index. Numbers are based on 180 million visits at more than 4,500 retailers. According to the index, “Emails from retailers drove 25% more shopping than last year and contributed to a huge mobile shopping day with 37% of sales coming from smartphones and tablets.”
ChannelAdvisor, an e-commerce software company, said online same-store sales were up more than 43% year-over-year. Consumer engagement is at a peak and a requirement for retailers to survive. Walmart saw considerable mobile usage this Cyber Monday.
Mobile is making up more than 70% of traffic to Walmart.com, and nearly half of the orders since Thanksgiving have been placed on a mobile device—double last year. Anjee says technology will not slow down, and one of the next big pushes could be touch-screen ordering in quick serve (think McDonald's) and an increase in mobile app usage. Retailers not following suit or reinvesting in consumer engagement will shutter. Expect to see several retailers closing shop, she says.
JLL EVP Michael Hirschfeld
More than ever before, brick-and-mortar retail will be driven by a few key factors in 2016. Michael says for urban locations, whether flagships or in the new emerging neighborhoods that are blossoming in almost every metro area, retail is increasingly about the consumer experience.
With almost any product available 24/7 online, consumers now shop as much as a leisure activity as for any other reason. As a result, they want an experience that reinforces the decision to walk into a particular store. To this end, he says we may soon start seeing certain products available only if you come into the store, giving customers an incentive to visit retail stores.
This experience can start even before they step across the threshold, with a well-thought-out social media presence that's used to brand the company. In shopping centers, the buzz around outlets has not really diminished. People like a real (or perceived) value and will continue to flock to outlet centers. As the outlet centers move closer to the urban core, the real pressure will likely not be on specialty retailers but on department stores.