LOS ANGELES-The retail sector will need to produce $10 billion in sales each day this holiday season to generate the 3.9% sales growth estimated by the National Retail Federation. To aide in achieving this goal, Jones Lang LaSalle's retail team has crafted five strategies for retail owners and operators to employ.
With Thanksgiving falling late in November, the holiday shopping season is only 26 days this year, six days less than the holiday shopping season in 2012. JLL recommends that retailers ignore the “official calendar” and begin pushing holiday sales earlier. Major department stores are opening on Thanksgiving Day for the first time this year to stimulate early sales, and the firm believes smaller retailers should follow.
Although ecommerce sales continue to grow, consumer needs during the holiday season afford brick-and-mortar retail to compete. JLL encourages retailers to provide “instant gratification” by partnering with their digital outlets as a pick up location for online purchases and by expanding store hours so that consumers have more shopping flexibility. “Brick-and-mortar retailers with locations that double as online fulfillment centers will see an uptick in their sales,” says Lew Kornberg, leader of tenant representation at JLL. “Retailers with an online only presence are also rethinking their need for traditional space.” Apple, Nordstrom and BestBuy follow this strategy, increasing store hours and allowing local online purchases to be retrieved in-store.
For the next two sales strategies, JLL notes the importance of utilizing space. First, the firm suggests “pop-up or drop-in locations,” where retailers sign a short-term lease in a high traffic location to increase exposure. This season, JLL is securing 5,500 short-term leases for the holiday season. On the other side, JLL also notes the importance of “maximizing space.” Because real estate is the largest overhead cost for retailers, the storefront space should be utilized with maximum efficiency. Doing more with less is the new normal, so today retailers are maximizing their existing format to showroom goods and keep shoppers enticed,” says Larry Jensen, director of development and operations for JLL Retail. “Once a shopper has crossed the threshold, creating an engaging environment to harness their buying power is key.”
Finally, retailers should “create a seamless experience” by leveraging technology, mobile websites and devices and offering in-store wifi. Mobile websites shouldn't take longer than five seconds to load and should have a wealth of store and product information that consumers can get before even entering the store.
Although the sales increase and shorter season may seem daunting, research shows that 20% of Americans plan to increase spending by $500 per household. In a recent story reported on GlobeSt.com, retail in Downtown Los Angeles is seeing major investment activity with FIGat7th and LA LIVE achieving major success.
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Kelsi Maree Borland
