The retail real estate industry is optimistic about the economic recovery and the innovative future of stores and shopping centers, according to a new ICSC survey of retailers and commercial real estate (CRE) companies.
After safety protocols brought about by the pandemic caused sharp declines in foot traffic, 60% of CRE leaders and 55% of retailers expect a return to pre-pandemic levels by the end of the year. ICSC contends that this is something of a testament to the resilience of consumers and their strong desire to safely return to brick-and-mortar retail.
Simultaneously, the pandemic propelled retailers and retail real estate through years’ worth of transformation in a matter of months, and industry leaders say they expect a wave of innovation – in terms of both offerings and in-store formats – to continue while what is envisioned as the “store of the future” becomes a reality sooner than expected.
In addition, the survey found that two-thirds of retailers plunged into ecommerce by offering in-store fulfillment of online orders in response to the pandemic, while 73% of small retailers also chose to implement a click-and-collect option.
According to CRE leaders, an overwhelming 88% of shopping centers are being used to fulfill online orders. In addition, the survey found that nearly all (99%) of retail respondents reported their stores fulfilled online orders to some degree.
“For retail and retail real estate, the COVID-19 pandemic hasn’t spurred a total reinvention, but a rapid acceleration of trends that were already taking shape,” said ICSC President Tom McGee.
“Stores were already offering curbside pickup, ramping up click-and-collect and rethinking store formats. What we’ve seen since March is a remarkable expansion of that, which will create a better experience for consumers as they return to stores and shopping centers.”
Green also stressed, “Retail is one of the most resilient industries, and this continued adaptation is indicative of that ingenuity.”
These changes proved vital to survival over the last 11 months, and the industry is prepared to make the investment necessary for the future. Retailers and CRE firms plan targeted investments in digital marketing and online storefronts to keep up with the convergence of online and physical retail.
Still, respondents intend to invest both online and in-store experiences – 78% of large retailers say their marketing efforts will center around the digital customer experience, while 73% said in-store sales were a priority.
At brick-and-mortar locations, consumers are beginning to see what the store of the future might entail and how it was shaped by the pandemic, the association points out.
Retailers and CRE firms have worked to increase accessibility for quick trips (46% and 50%, respectively), and three-in-four retailers have used their parking lots to accommodate curbside pickup.
The resilience demonstrated by companies’ quick pivots and rapid transformation was critical for the industry, which accounts for one-in-four jobs in the U.S. and is a vital part of the country’s economic recovery, ICSC says.
While the 2021 outlook among industry leaders is positive, the impact felt during lockdown as a result of forced closures and restrictions left many retailers in need of financial assistance.
At the local level, stores and shopping centers are an essential part of their communities, and both industry leaders and consumers are eager to return as restrictions lift, ICSC observes.
With safety top of mind, stores plan to sustain the changes made during the height of the pandemic for the foreseeable future. Nearly 80% of small CRE firms are likely to continue using plexiglass barriers to protect employees and shoppers over the next throughout 2021 and perhaps into early 2022.
In addition, 76% reported a plan to continue shortened hours – compared to just 53% of larger firms. Large CRE firms have prioritized increased sanitation (76%) over other restrictions, while independent retailers (58%) are prioritizing crowd management.
“Retail has proven itself to be integral to our economy, its recovery and our communities,” McGee asserts.
“The investments made by retailers and CRE companies to prioritize safety have been definitive markers of successful adaptation during the pandemic, and the work they’ve done to enhance their omnichannel strategies better positions our industry to withstand future disruption.”
