Shawn Massey, CCIM, SCLS

The New Normal! Exploring The Valley Retail Waters: An Update on the TVA Retail Forum held September 29th, 2012

 Part 1 of 4

 

This past Friday I had the pleasure of being part of a very distinguished panel of retail brokers at the annual Tennessee Valley Retail Economic Development Forum.  Melissa Halsell and the entire TVA Economic Development team did an excellent job as hosts of this event that really got into the heart of retail recruitment with an emphasis on smaller communities who are challenged in today’s business climate.  I truly applaud TVA’s effort in reaching out to Buxton and my own company’s government services division headed up by Lacy Beasley to bring the best in retail recruitment programs to the Tennessee Valley members!

The panel that I sat on included the following:

David Baker – Baker Story McDonald Properties

Lizz Kabat – Kabat Real Estate Solutions

Allen McDonald – Baker Story McDonald Properties

Jeff Pape – GBT Realty

Dick Sammer – Pride Brokerage Services

The bullet points provided is a mixture of the discussions that took place, research that I did prior to the forum and occasionally my own insight and not all were discussed during the forum.

Our panel was to address a list of questions that included the:  What Consumer Trends are affecting retail markets?

Note:  I felt that we could not simply look at consumer trends without exploring retailer trends and retail development trends. They work together to answer the audience question.  In part one I will discuss consumer and retailer trends that are affecting the retail market.

What Consumer Trends are affecting Retail Markets?

1. Consumers want more personalization.  The industry calls this “The Apple Effect.”  It becomes all about the experience of the consumer at the point of purchase.   

 2.  Cross Channel Commerce (Omni Channel Retailing)

                        (Unit Channel>Cross Channel>Omni Channel>Post Channel)

Retail customers want to purchase, take delivery or return a product by the channel of their choice.

This includes the continued growth of online shopping which in the last 5 years has grown about 40% along with mobile at 105% growth.  It is estimated that by 2015 that online and mobile may make up 25% of all purchases.

 3.  Super Digital Consumer – Decisions based on online forums, reviews and      social media.  During the forum it was referred to as “The Amazon Effect.”

                        Challenges: 1. Erratic Customer Demand

                                                2. Fast paced digital consumer

 There is no doubt that Amazon, Apple, Facebook and Google have the change the way consumers shop.

 4.  We are at the end of the Pyramid demographically.

                         a. The elderly are staying young longer i.e.:  60 is the new 40

                      b. Young people mature at an early age.  13 year olds typically have smart phones.

                        Note:  The U.S. has about 75 million baby boomers, people born between                                                 1946 and 1964. The U.S. grandparent population will grow by 11  percent from                  69.6                       million from 2010 to 77.1 million by 2015.

 5.  Glocalization – Consumers want openness & transparency on a products origin.  Frankly, I had not heard of this term to describe this trend till my research, but I like it despite the fact that spell check says it does exist.

 6.  Priority time of consumers between work and leisure sometimes mixed!

                         a. Sometimes “Fun” shopping

                        b. Sometimes “Run” shopping 

 7.  We are consuming less – Consumers are more selective and buying less, but expect higher quality.

 8. Emergence of the Millennials

                         a. Raised on high speed internet

                        b. Massive multi taskers

                        c. Savvy shoppers

                        d. Price, selection and engagement are the rule

 9.  Extreme couponing – Groupon, Woot, Living Social etc.

 10.  Bottom Line – Consumers are shopping smarter – Greater Price Sensitivity on their purchases.

 11.  Discounting today is a “way of life!” – Examples are Wal-Mart, Target and              K-Mart turn 50 this year.  Value and thrift shopping is now considered very cool!

 12.  Consumers are looking more for walkable shopping environments

 13.  Consumers are allocating more dollars at both ends of Price Continuum.  i.e.:          Barbell Retailing.  The same consumer may go into to a luxury retailer to buy something and then stop at a Dollar Store on the way home.

 14.  Health and Wellness – As consumers focus on getting healthier, winning stores and restaurants are selling healthier products. Wal-Mart, Guiding Star and SuperValu each have their own label to let consumers know which are items are healthy.

 15.  Growth of Non-White Population – Non-whites and Hispanics accounted for 98 percent of the population growth in large metro areas, according to Nielsen research, so retailers could easily increase sales by appealing to the growth of minority shoppers.

 What Retailer Trends are affecting Retail Markets?

 1.  Omni Channel Retailing – Bricks and Mortar, Catalog and Online (Internet and Apps via Smartphone).   Savviest merchants are Omni Channel – Need to maintain consistency of price over all channels.

 2.  Store Sizes are starting to shrink!  – Especially those retailers susceptible to     the internet, i.e.  Office Supplies, book stores, music stores.

 3.  Brands will start selling more private label merchandise and these store brands continue a sales surge.

4.  Retailers will continue to take control of the supply chain from a product’s conception to the store shelves.

 5.  Retailers are continuing to invest in mobile.  Clearly the winning strategy for the best retailers.  For example:

                         a.  QR Codes

                        b. Cutting Edge Apps

                        c. Product Reviews

                        d. Social Media (need to be able to measure effect!)

                         Note:  Technology is the key to compete and differentiate their product

 7.  Retailers are embracing the Millennials. 

 

 8.  Pop up retailing will continue  i.e.  Halloween Shops, Christmas Tree Store

 9.  Show Rooming – Internet fulfillment center and carrying less merchandise.

 10.  Franchising in spurring the growth of retailing throughout the country.

 11.  Small retailers will begin to stabilize their business.

 12.  Retailers are starting to measure the impact of pricing decisions – Another operational challenge.

 13.  Relentless focus on the customer (consolidating data across multiple channels.)

 14.  Fundamental shift to designing the overall customer experience.  It was referred to as Shoppertainment.

 17.  Retail stores will do more!

       a.Fulfillment point for all channels.

        b. It will serve as a local marketing department.

         c. It will serve as a social media point.

18.  Retailers will do a better job merchandising – shift from product to customer data.  No longer will the best retailers stock all their stores the same.

19.  Better retailers are able to adapt in recessionary times and into the smaller formats.

If you have any additional insight to the above discussion please feel free to share in the commentary section.  Your comments will be appreciated by my readers.

Part 2 will focus on retail development trends affecting the retail market and Part 3 will focus of how retailers are choosing locations these days and Part 4 will focus on what retail development agencies can do better to attract retailers to their communities.              

I hope you will check out future weekly commentary at

www.RetailRocksintheMidsouth.com.   If you enjoy the commentary please subscribe online.

Cheers,

Shawn

Shawn Massey, CCIM, SCLS is a partner with The Shopping Center Group a 3rd party retail real estate advisory firm in their Memphis office, an adjunct professor in the graduate real estate program at The University of Memphis, in 2013 Shawn will join the faculty of the Homburg Academy teaching on-line real estate classes world-wide and is also co-founder &Chairman of the Board for the Memphis Business Academy charter schools (K-12th grade) in the Frayser area of Memphis.  

For all your retail real estate needs (tenant representation, landlord representation and property, investment & land sales) I hope that you will choose The Shopping Center Group and me to represent you and your business.  We understand that representation is a privilege and that you have a choice!

The opinions expressed in this post are entirely my own.  They should not be considered the opinion of The Shopping Center Group, LLC in which I am associated.

 

468 ad

Leave a Reply

Your email address will not be published. Required fields are marked *


Warning: Invalid argument supplied for foreach() in /home1/retail/public_html/wp-content/plugins/cute-profiles/processors/cute_1.php on line 25