The Store is No Sure Thing
The whole Black Friday—now Cyber Monday shopping spectacle has turned into a Pavlovian binge by consumers—people rush into stores and now onto their computer devices lured by the prospect of bargains and buy plenty of other things they don’t really need, because it’s the time of the year to behave this way.
And as predictable as sidewalk Santas showing up on the Friday after Thanksgiving, we read headlines in the week following about record sales and various retail analyst predictions for holiday bottom lines, which never seem to pan out. Typically holiday receipts turn out lower than the initial indicators as retailers have been forced into further discounts as Christmas Day approaches. Expect that to happen again this year since the economy is hardly operating on all cylinders.
For all the media frenzy about bleary-eyed shoppers going to malls in the middle of the night bloated after eating too much stuffing and pumpkin pie and stumbling all over each other for a big screen TV or the latest android phone, the one clear trend is the steady gains made by e-commerce retailers.
Folks actually want out of the lines and all the pushing and shoving. Better to sit at home with a cup of coffee and find deals on the I-pad in the comfort of that favorite chair than grope and grab through store aisles. And who needs the hassle of finding a parking spot, not to mention going out in the cold, lugging boxes and bags back to the car. Shopping as entertainment somehow loses its edge and the need for instant gratification isn’t as paramount when the whole idea is opening your presents on Christmas Eve or Christmas Day—still weeks away. Add in the free deliver and (still) no sales tax, and the e-commerce retailers gain more and more traction.
Of course, the bricks retailers get the picture and have boarded the e-commerce bandwagon. They look to sell more on line, while downsizing store formats and consolidating in the best locations and malls. They want high profile, high traffic locations to showcase their brands, but will rely increasingly on web portals to handle actual sales. It’s all more efficient and profitable anyway. They can spend less on store rents and store personnel, and ship directly to consumers from centralized warehouses, avoiding all sorts of expensive intermediary stops and steps. They can also track consumer sales patterns and tailor marketing gambits to individuals’ buying habits more easily and directly. Just shoot an email offer back at their customer.
Again this year, the shopping center owner with a surfeit of empty space must be getting a bit of an extra chill as he or she looks what’s happening in on line buying. Of course, people will always want to shop in stores and touch the merchandise and get personal attention from a sales person. But they also know they don’t have to go to a store to get what they need, and if they don’t need it immediately or don’t get a special shopping experience when they go to a store, why make the trip—save the gas and the time, and go on line instead.
The store thing just isn’t what it used to be.
Attend RealShare Conferences to hear from prominent speakers and meet the commercial real estate elite. Check out the schedule of events!