Retailers and landlords need to provide increased emphasis on experiential shopping and curated content to overcome lower sales volumes, retail experts say.
Panelists in a Placer.ai webinar analyzed recent sales levels and consumer trends. Sales dipped during the summer and early fall, partly due to families taking vacations after spending more than two years at home. Meanwhile, 61% of consumers indicated they want experiences while shopping so they could treat themselves and engage with other people.
“Domestic airplane travel rose 11% from the year before… It seems as if someone was always taking a vacation this summer,” said Jami Passer, Chief Investment Officer for EDENS. “We do believe this took a toll on overall foot traffic, although the good news is that overall sales were generally up across the board. Wal-Mart reported larger basket sizes as well. In the environment we are currently in, with inflation and seemingly bad news every day, consumers are making an extra effort to treat themselves to something special, as well be out in the community.”
“Consumers were hit with a one-two combination of higher inflation and gas prices earlier this year, with many wondering if they even should be driving around and shopping,” added Ethan Chernosky, Vice President, Marketing for Placer.ai. “But gas prices finally lowered and consumers assumed their typical buying habits. And, even though overall grocery store sales are down year-to-year, they remain substantially higher over a three-year period.”
“Consumers are still reeling from higher prices in all categories of their daily expenses – food, gas, utilities, insurance and more,” said Tom Fidler, Executive Vice President & Principal, MacKenzie Retail. “The adjustment was forced upon everyone in a short period of time… The consumer is pessimistic with the near economic future, yet they continue to have needs and wants that have resulted in stronger sales performance for most retailers. When adding a more favorable shopping experience or specific discounts, both retailers and shopping center owners are jockeying for that higher position in a consumer’s mind, resulting in more shopping trips and repeat sales.”
It remains important for both retailers and landlords to focus on increasing consumer dwell time and to offer them an enticement to leave their homes, Passer said. Research demonstrates that consumers crave experiences and entertainment when shopping and that “when you capture someone’s time and attention, you also capture their wallet share.”
This is the reason why EDENS regularly organizes community events – such as farmers markets, movie nights and concerts – throughout its national portfolio of shopping centers. It also partners with retailers on some events. For instance, a shoe store may sponsor a 5K to support an important cause, with the landlord becoming a sponsor or providing marketing assistance.
The pandemic created other shifts in consumer behavior.
“Over the past several of years, we have seen a hyper localization, where people did their best to support local retailers because they were sensitive to the challenges they were facing,” Passer said.
Some consumers are also experiencing a “COVID hangover” – a reluctance to go out shopping, she added. “Although we have made it nearly all the way back from the worst part of COVID, there will never be a normal again, mainly because of the increased volatility of the world and the speed of change.”
However, promising sales during back-to-school season could set the standard for holiday shopping, she said. “Strong performance from the movie theatre industry will help increase overall retail sales as well.”