The official start of the all-important holiday retail season is almost here. Conventional wisdom always tells us that as go the shopping centers, so goes the wider economy. After a nationwide wave of lease restructurings in 2008-2011, has the dust settled and is growth in the (shopping) bag? A quick check around the country shows mixed signals:
And The Brand Played On Even though recent trends show big box stores reducing footprints, some brands are building at a fevered pace. Macy’s at Herald Square in NYC has announced plans to invest millions on one of the country’s most expensive streets.
Small Is Beautiful What’s in the cards for those retail tenants who aren’t competing for international tourists in flagship locations and don’t have the deep pockets to swim in those waters? How about a consumer credit giant sponsoring a whole day of the week — complete with co-op physical and social media advertising — devoted to the small retailer? That’s American Express’s idea with Small Business Saturday, set for this Saturday, Nov. 26th.
Bricks Are Strong Against Clicks Worries about online e-commerce steadily biting into physical retail are overblown, said David Henry, president and chief executive of Kimco Realty Corp, speaking at this year’s National Association of Real Estate Investment Trusts. “First, everyone thought catalog sales were going to put retailers out of business, then it was the home shopping networks that let you do everything from home,” he said.
However, he added, “unless you’re buying a plain white shirt,” the unique challenges associated with size and fashion make it difficult to shop online. That difficulty, research has found, leads to multiple sales and multiple returns.
“Online, somebody will buy six pair of shoes and return five,” said Sandeep Mathrani, chief executive of General Growth Properties Inc.
When those returns are made at a retail outlet, Mr. Mathrani said, “it’s basically a store coupon,” which ultimately drives more traffic to the physical retail stores.
(It should be noted that when not lobbying to impose sales taxes onto internet retail operations, big players in the REIT marketplace are quick to stand up for their business model. But the points about online driving store traffic are valid in a world where clicks now accompany bricks in the majority of retailer cases.)
Old strengths, new ideas and changing models; will retail unwrap a strong 2012? We’ll just have to wait and see.
- Black Friday Sites: Retailer Friend or Foe? (compete.com)
- ‘Black Friday’ Sprawl (online.wsj.com)
- US DATA: Retailers experienced their first sales in.. (forexlive.com)