Hill: In line with trends of “creating an experience,” creating a flagship means producing a location that becomes an event to visit. These stores are trophy locations for retailers in which they invest time money and extensive planning. When a consumer chooses to visit or shop here they will not only find wide selections but captivating visual aesthetics, top technology, and an overall experience that isn't traditional of their smaller locations. LA is a key location for flagships because of its place in the fashion world and the amount of tourism that is driven to the area annually. These locations are no longer about shopping but are tourist destinations themselves that local, domestic, and international travelers include on their list.

GlobeSt.com: How has the increase in flagship stores affected the retail market and retail investment activity?

Hill: The idea behind creating a flagship store is rethinking how tenants use space. Successful omni-channel commerce has reduced the overall footprint needed in the brick and mortar world for retailers. Flagships allow tenants to create a handful of premier locations in top destinations to act as a marketing and service channel for their business and are then supported in secondary markets by numerous smaller outlets that offer convenience and curated products. This means companies are focusing on a handful of large-scale stores and cutting back on square feet needed in suburban and neighboring cities. Tenants are choosing to locate and invest in trophy properties in high-demand and high-frequented markets where they are willing to pay good money for prime space.

GlobeSt.com: What is your retail outlook for 2017, and why?

Hill: Overall positive. Consumer confidence has been stable and job growth has continued. People are feeling comfortable with spending, and unless something completely unforeseen happens, that won't change overnight. The Greater LA area remains a premier destination for retail and with tourist numbers increasing each year, we predict retail sales in the region will be strong throughout 2017.

LOS ANGELES—For retailers with smart spaces, brick-and-mortar retail is still driving retail sales. According to the third quarter report from CBRE, online sales accounted for 8.1% of each retail dollar spent, but sales from online-only retailers only accounted for 3.3% of each retail dollar spent. The report also showed an increase in flagship locations in Los Angeles. We sat down with Ashley Hill, senior research analyst at CBRE, to talk about this dynamic in the retail market. In this exclusive interview, Hill tells GlobeSt.com that successful retailers are creating an in store experience and an online presence. Here, she talks more about the increase in retail spending, why flagship stores are becoming more common and what to expect from the retail market next year.

GlobeSt.com: Retail spending has fallen flat for most of the year, but picked up in the 3Q. What fueled the increase in consumer spending, and why do you predict that the momentum will continue well into next year?

Ashley Hill: Although retail spending fell briefly during the summer, these rates included gasoline sales, which have continued to remain low nationally and directly affect the overall figure. Employment, confidence, and holidays have been huge factors in third-quarter spending and are great indicators for what's to come in the fourth quarter. Major retailers have reported improving sales trends and are very optimistic for this year's holiday season. Consumers are feeling secure as wages increase and employment remains stable, something that has been displayed in retail spending and restaurant sales. Momentum should continue into 2017 but will more than likely be gradual nationally as has been seen over the past few year. The Internet has created a demand for discount retail options, which many tenants have begun capitalizing on and has directly affected net sale, but so long as consumer confidence holds out, 2017 should be another positive year for retail.

GlobeSt.com: Ecommerce has been a challenge for retailers, but the 3Q report shows an increase in flagship stores. Why are retailers planting flagships in L.A.?

Hill: In line with trends of “creating an experience,” creating a flagship means producing a location that becomes an event to visit. These stores are trophy locations for retailers in which they invest time money and extensive planning. When a consumer chooses to visit or shop here they will not only find wide selections but captivating visual aesthetics, top technology, and an overall experience that isn't traditional of their smaller locations. LA is a key location for flagships because of its place in the fashion world and the amount of tourism that is driven to the area annually. These locations are no longer about shopping but are tourist destinations themselves that local, domestic, and international travelers include on their list.

GlobeSt.com: How has the increase in flagship stores affected the retail market and retail investment activity?

Hill: The idea behind creating a flagship store is rethinking how tenants use space. Successful omni-channel commerce has reduced the overall footprint needed in the brick and mortar world for retailers. Flagships allow tenants to create a handful of premier locations in top destinations to act as a marketing and service channel for their business and are then supported in secondary markets by numerous smaller outlets that offer convenience and curated products. This means companies are focusing on a handful of large-scale stores and cutting back on square feet needed in suburban and neighboring cities. Tenants are choosing to locate and invest in trophy properties in high-demand and high-frequented markets where they are willing to pay good money for prime space.

GlobeSt.com: What is your retail outlook for 2017, and why?

Hill: Overall positive. Consumer confidence has been stable and job growth has continued. People are feeling comfortable with spending, and unless something completely unforeseen happens, that won't change overnight. The Greater LA area remains a premier destination for retail and with tourist numbers increasing each year, we predict retail sales in the region will be strong throughout 2017.