5 Retail Predictions, Trends to Watch in 2017

Ami Ziff, national director of retail with Time Equities Inc.

Ami Ziff , national director of retail with Time Equities Inc. , previously told GlobeSt.com that food and entertainment are the new anchors and will continue to be major assets for retail tenants. “With declining department store traffic and continued growth of online shopping, consumers will be looking for unique experiences paired with conventional shopping activity,” Ziff said. For instance, Lululemon will offer added “amenities” such as wi-fi, yoga classes and pop-up coffee shops, Ziff says, while brands such as ABC Carpet, Restoration Hardware and Macy’s are also introducing food concepts to create elevated shopping experiences. And in chatting about a five trends and predictions in the coming year, Ziff says to keep an eye on the following. The following views expressed below are the author’s own. HEALTHY RETAIL FUNDAMENTALS: With the U.S. retail vacancy rate down to 6%, its lowest since 2007, I anticipate retailers will remain in expansion mode, evidenced by the fact that retailers are slated to open over 40,000 stores this year. BRICK AND MORTAR SHOULD ALWAYS BE RELEVANT: Despite the growth and evolution of online shopping, several factors such as the desire to try clothing on, having an interactive experience while shopping and the immediacy of purchasing at a physical location, will help ensure the relevancy of brick and mortar storefronts. Omni-channel retailers will continue using online sales to determine where their customers live and determine the best locations to open stores in close proximity to those customers. According to data, consumers shop 3x more frequently and spend 3.5x more when a retailer has an omni-channel presence. OFF PRICE IS NOW ALWAYS IN SEASON: Off-price retailers will continue to experience success, as the national rate of consumer saving reaches an almost four-year high. Retailers such as Macy’s, Nordstrom, Saks, Nieman Marcus and Lord & Taylor remain at the forefront of this retail model. RETAILERS DOING MORE WITH LESS: Retailers will continue to shrink their boxes in an effort to reduce fixed costs, drive sales per-square-foot and penetrate urban markets. CROWDED INVESTMENT SALES LANDSCAPE: The industry will experience compressing cap rates, deep buyer pools and investors chasing yield on secondary/tertiary markets.