New developments are engaging consumers with multiple touchpoints in order to drive traffic.

HOUSTON—The ICSC Texas Conference and Deal Making event is being held today through Friday in Dallas. This three-day regional event provides opportunities to gain information about the most current industry issues and make deals with colleagues doing business in the region. In preparation for the conference, Daniel Taylor, managing director, retail, Texas-Oklahoma division of CBRE, discussed the retail climate, e-commerce, labor costs and other issues affecting retailers in this exclusive.

GlobeSt.com: The emergence of large, global e-commerce retailers continues to receive a lot of attention. How are traditional brick and mortar retailers being impacted?

Taylor: Don't believe everything you see in the news today, as it all seems to be doom and gloom. E-commerce is getting all the attention. However, in each of Texas' four major markets, we are at historic occupancy levels. Also, it is important to remember the total sales volume for US e-commerce in 2016 was $394.9 billion, yet this was only 8.1% of all US retail sales, which totaled nearly $4.9 trillion. Although e-commerce sales are going well, they're still a small slice of the larger retail pie.

GlobeSt.com: What creative strategies are retailers using to combat large e-commerce operations?

Taylor: Retailers are pivoting to new omni-channel strategies that include industrial and logistical space needs, while successfully creating memorable consumer experiences in an environment that offers a sense of place. In addition, much of the online or e-commerce sales remain with traditional brick-and-mortar retailers. Some retailers are also seeing e-commerce strategies successfully steering customers back into stores, utilizing omni-channel platforms.

GlobeSt.com: Omni-channel retailing seems to be the big buzzword in the industry right now. Can you share more about this concept?

Taylor: Omni-channel retailing strategy focuses on providing a seamless shopping experience in traditional locations through a variety of digital channels. Here in Texas, we are seeing an increasing number of existing tenants and new developments engaging consumers with multiple touchpoints in order to drive traffic and increase customer experience. Retailers who embrace this strategy are able to use it as a successful differentiator.

GlobeSt.com: What other interesting trends will be the hot topics of conversation at this week's ICSC Texas Conference?

Taylor: Construction prices–we have seen construction prices go up approximately 8 to 10% during the last 12 months, directly impacting rental rates. Also, Texas has not seen the full impact of the hurricanes yet and what effect they will have on material, labor, etc. in the coming months.

Retail investment risk–The debt and equity markets seem to be viewing retail as a riskier investment than other asset classes.

Lack of space–as I mentioned before, Texas is at historic occupancy levels. Retailers are still looking to expand in our markets, but it can be hard to find quality space for them.

GlobeSt.com: Are we seeing any development changes due to the increase in construction costs and limitations of available labor?

Taylor: Although the majority of Texas' retail pipeline continues to move forward as scheduled, both developers and retailers need to be cognizant of the current landscape and work on balancing costs with profitability. Although some projects may see delivery timelines extended (especially in the Houston area), I do not expect any major changes at this time.

GlobeSt.com: What has been the impact of Hurricane Harvey on Houston retail? Is there a timeline for Houston retail to rebound/rebuild?

Taylor: I don't believe we have seen the full impact of Hurricane Harvey yet. As rebuilding continues, it will put pressure on the availability of labor and materials, and also have a big impact on developers trying to bring projects to market. I look forward to seeing retail come back even stronger than before, adapting to the needs of the area.

Instant Insights /

Full Retail Impact of Harvey Not Yet Clear

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