Matthew Harding and Melissa Sievwright
Retailers in Levin Management Corporation’s (LMC’s) 100-property, 14-million-square-foot shopping center portfolio are anticipating a strong holiday season following what has been a generally positive year to date. The Conference Board reported that in October consumer confidence registered at its highest level in nearly 17 years.
“It comes as no surprise, then, that more than three-quarters – 76.9 percent – of our survey participants expect sales to be the same or better than last year’s holiday shopping season,” noted Harding, adding 41.7 percent of respondents plan to add seasonal staff. “This optimism is reinforced by projections from our industry’s largest trade organizations.”
For example, the National Retail Federation anticipates 2017 holiday retail sales to increase between 3.6 and 4.0 percent, a forecast that would meet or exceed last year’s growth of 3.6 percent. The International Council of Shopping Centers (ICSC) predict a 3.8 percent year-over-year growth in retail holiday sales, with 46.0 percent of shoppers indicating they will spend more this holiday season. Further, the ICSC study shows 91.0 percent plan to shop at bricks-and-mortar stores.
Nearly half (48.7 percent) of LMC survey respondents expect their holiday sales to peak before and during the Thanksgiving/Black Friday weekend. “Our retailers anticipate consumers will shop early again this year,” Harding said. “Interestingly, this is the first time in five years there are four pre-Christmas Saturdays in December, which expands the season and provides an opportunity for additional sales. We look forward to seeing if this changes the dynamics. Analytics firm Shoppertrak expects Saturday, Dec. 23, to be the second-busiest shopping day, after Black Friday.”
Engaging Customers in a Digital World
The LMC Pre-Holiday Survey results emphasize retailers’ efforts to engage customers and enhance their in-store experiences during the 2017 holiday season. Continuing an established trend, technology-centered marketing is playing a key role as bricks-and-mortar stores work to compete in an increasingly digital world.
More than half (52.3 percent) of respondents who use tech-centered marketing tools report their efforts have boosted holiday sales in prior years. To that end, 96.2 percent of those respondents will employ the same amount or more technology-centered marketing for the 2017 holiday season.
Email remains the favorite avenue for reaching customers outside the store, used by 80.2 percent of survey respondents who employ tech-marketing tools, with social media/social marketing coming in second at 73.7 percent. Other notable categories include text messaging (32.4 percent), and banner or other internet advertising (29.8 percent).
“There is no doubt today’s consumers are influenced by information they receive digitally,” noted Melissa Sievwright, LMC’s vice president of marketing. “In fact, some of the latest research is turning out incredible numbers. ICSC’s Holiday Shopping Intentions Survey found 85 percent of shoppers will research products online before making in-store purchases, and nine of 10 will visit retailer websites or apps to get product information.”
The need to engage customers digitally does not end when they enter a store, and LMC retailers are providing a variety of tech-centered incentives and conveniences this holiday season, Sievwright noted. In fact, of LMC survey respondents who are employing tech-centered marketing tools, 75.8 percent offer digital coupons, discounts and/or loyalty points; 37.2 percent provide in-store, online ordering (with free shipping) for out-of-stock items; and 34.6 percent have an option to pre-order items online for in-store pick up. Other popular conveniences offered include free Wi-Fi (29.0 percent) and electronic receipts (28.6 percent).
“Shoppers today use their mobile devices in-store to access coupons, check availabilities and compare prices – so offering digital incentives and strong Wi-Fi signals is smart practice,” Sievwright said. “We also know consumers who buy online and pick up in-store often make additional purchases during their visit. We are encouraged by our survey’s indication of strong coordination between our tenants’ physical stores and online counterparts.”
The LMC survey shows nearly one-third (32.7 percent) of respondents plan to try something new this year to enhance their customers’ in-store holiday shopping experiences. And while some tie to tech-centered marketing, many others take advantage of aspects of the physical store environment that cannot be duplicated online.
“Our tenants recognize that consumers want more out of the shopping experience than simply purchasing gifts,” Sievwright said. “In addition to traditional sales and specials, we are seeing everything from in-store fashion shows, performances and demos, to CPR classes and fundraisers for local charities. The survey also revealed a strong emphasis on enhanced customer service – the cornerstone of successful retail.”
LMC’s next Retail Sentiment surveys will be conducted in January, gauging retailers’ outlooks for 2018, and in May, exploring year-to-date performance and technology issues. For 65 years, LMC has served as a trusted single-source commercial real estate services provider for institutional and private owners. LMC today maintains a diversified, retail-focused portfolio in the Northeast and Mid-Atlantic states. The firm’s services continue to evolve with new technologies, efficiencies and sustainability-focused initiatives to serve a new generation of properties, investors and tenants.