The pandemic-fueled grocery store high may be wearing off, but emerging wellness brands are expected to fill shopping center vacancies and new technology continues to drive retail sales. Those were a few of the insights provided during the “Retail Q3 Update: Trends and Tactics to Watch” webinar jointly sponsored by Innovating Commerce Serving Communities (ICSC) and Placer.ai.
Grocery store visits moderate
Although overall figures remain healthy, grocery store visitations and sales have subsided in recent months, with consumers visiting restaurants more often and going on vacations, said Josh Dinstein, Senior Vice President, Acquisitions for Continental Realty Corporation. According to research from Placer.ai, weekly consumer visits to grocery stores nationwide during May and June were slightly below levels from one year ago, except for one week in June when visits rose nearly 4 percent.
“Amazon’s recent decision to reboot its grocery business and delivery service, coupled with the pending Kroger-Albertsons merger are indicators of the disruption and tough sledding expected in the short to medium term. That said, grocery-anchored retail centers remain the most attractive in their asset class and that fact is never changing,” Dinstein said.
Omnichannel key to retailers
Delivering an omnichannel experience to consumers by offering every shopping option – including online, pick-up, and in-store shopping – has never been more important to a retailer’s survival, according to Najla Kayyem, Executive Vice President, Marketing for Pacific Retail Capital Partners.
“Consumers are demanding this and it is critical to meet consumers when and where they want to be met,” she said. “The presence needs to be seamless, user-friendly, and consistent as consumers are increasingly price-conscious and crave instant gratification. If you don’t believe me, just look at the demise of Bed Bath & Beyond which was too late to embrace the concept of ecommerce. Staying relevant is the lifeblood of a retailer.”
“The good news in the case of Bed Bath & Beyond is that the company controlled extremely valuable real estate and retailers, such as Burlington, swooped in and bought more than 40 of their previous stores,” Dinstein added. “Shopping center owners, in general, were not too sad to recapture this retailer’s real estate as it provides the opportunity to find replacements that pay higher rent and provide more value to the project.”
Wellness brands fill vacancies
According to Dinstein, emerging brands in the health and wellness sector, many still in the incubator stage, are arriving to satisfy an addressable market.
“Shopping centers with superior access and visibility, plentiful and free parking, and proximity to major highways have become viable alternatives for this industry as patients are attracted by the convenience of driving to their local center for medical attention,” he said. “Hospital and medical groups, in turn, are opening suburban sites as an alternative to a primary urban site. This use is bringing unique visitors to the center on a weekly basis.”
Technology driving retail sales
Kayyem described a recent experience at cosmetics and make-up retailer Sephora which occurred during an out-of-country trip. “The new technology digitally measured my skin, provided an immediate analysis and recommended exact products that addressed my specific needs,” she said. “Next, I was driven to the retailer’s website where I completed my purchases. It was a completely seamless and enjoyable experience.”
Back-to-school shopping
The back-to-school shopping season is considered the year’s second most important, after holiday shopping, and retailers are looking to rebound from lackluster sales of a year ago.
“Strong sales of jeans, backpacks and shoes are a given, with a trend this year appearing to be vintage-style clothing,” Kayyem said.
Of course, when consumers shop, they also eat out and that’s music to the ears of restaurants, she added. “Restaurants did an amazing job of pivoting during the pandemic by unveiling apps, offering pick-up and delivery services and meal kits, and every restaurant category appears to be performing extremely well currently.”