Technology innovations, once seen as a fad and then a threat, are now an integral part of retailing. As tech continues to transform our industry, it appears that bricks-and-mortar stores are leveraging the benefits of online and mobile platforms, while adapting to the new consumer landscape. Our annual pre-holiday Retail Sentiment Survey of store managers in our 95-property, 13 million-square-foot shopping center portfolio reveal strong adoption of mobile technology as an integral part of the marketing mix and notable operational changes in response to an increasingly e-commerce-centric world.
Like most of the industry, we’ve accepted the fact that technology innovations have firmly entrenched themselves in how retail is run today. No longer just a retail real estate trend, the use of tech is now an established way of doing business. That said, the speed of adoption – and adaptation – reflected in our survey is truly eye-opening.
Majority of Our Respondents Say Mobile is Part of Their Marketing Mix
Simply put, mobile marketing has arrived! The majority of our surveyed store managers – 85.3 percent – indicated they are using this platform in their marketing mixes. This figure is up from 68.0 percent just one year ago and 52.6 percent in 2012. And of those respondents who have been employing mobile technology for at least a year, 53.4 percent indicated that they are using this tool to a greater extent in marketing for the 2014 holiday season than in 2013.
The embrace of mobile marketing goes far beyond our survey. In Accenture’s latest Holiday Shopping Survey, 76 percent of participants “said they would definitely use or would be willing to try mobile services that provide them with real-time promotions and offers as they shopped in-store if those services were offered.”
In-Store and Online: A New Symbiosis, the Next Retail Real Estate Trend
For the first time, our survey asked participants whether their company has adapted its business model in response to the growth of e-commerce. The conversation has moved on from whether e-commerce is impacting bricks-and-mortar stores to how those traditional stores are changing in order to prosper in an increasingly online shopping-centric world. We were encouraged by the responses we got.
In fact, 44.0 percent of survey participants indicated that their organizations have changed to accommodate e-commerce in some way. These adaptations included increased collaboration between in-store and online operations (54.4 percent), added in-store pickup and return options (41.3 percent), altered in-store inventory (34.8 percent) and altered store prototypes (23.9 percent).
To us at Levin, that looks like retailers are making multiple changes as this new environment evolves. We like that the “increased collaboration” response garnered the highest percentage because it indicates that the relationship between online and in-store is becoming more symbiotic. And that’s a good thing.
The melding of online and in-store (the omnichannel model) promises to benefit retailers this holiday season. According to Accenture’s study, 71 percent of shoppers surveyed plan to research purchases online and then make them in stores (“webrooming”), while 68 percent say they will go to see products in stores and then purchase them online (“showrooming”).
Opening “The Front Door to the Store” with Mobile and E-Commerce
The benefits of omnichannel retailing, where companies balance the benefits of online and in-store experiences, and its potential are significant. A recent Harvard Business Review blog does a great job of summarizing this phenomenon. It reads, “websites and mobile apps are not just e-commerce ordering vehicles, they are front doors to the stores. Stores are not just showrooms, they are digitally-enabled inspiration sites, testing labs, purchase points, instantaneous pick-up places, help desks, shipping centers, and return locations.” We at Levin could not agree more.
Our next Retail Sentiment Survey will be conducted in early January, gauging 2014 holiday sales performance. We’ll be sharing the key results here on our blog.
About Matthew K. Harding
Matthew K. Harding, CCIM, has been affiliated with Levin Management since 1986. He originally handled leasing of the Levin portfolio as Executive Vice President at Paul Lawrence Realty Associates for 10 years. Matt joined Levin’s in-house team in 1996 as Senior Vice President/Deputy Chief Operating Officer, overseeing leasing operations while supervising company management and administration. He assumed his current title in 2001 and, since then, has guided the strategic growth of Levin’s management and leasing portfolio. He also serves as a member of the firm’s Board of Directors. Matt earned a bachelor’s degree in Economics from Hamilton College. A Certified Commercial Investment Manager (CCIM), he maintains memberships in the ICSC and the Commercial Investment Real Estate Institute.