It has been 30 long months (930 days to be exact) since ICSC last sponsored its Mid-Atlantic Deal Making Session at the Gaylord National Resort and Convention Center. So when more than 1000 retail real estate brokers, retailers, developers and vendors returned to the exhibit floor and meeting rooms for the 2022 session, a strong sense of optimism — with a small dose of uncertainty — filled the air.
The retail industry, especially the restaurant sector, was hit hard by COVID, with nearly 5,000 store closings in 2021 alone. Even the trade association itself was impacted, as it was rebranded last year to Innovating Commerce Serving Communities.
ICSC CEO Tom McGee provided encouraging data to a lunchtime audience that pointed to the steady rebound of the retail sector, while adding that the association did not charge membership dues during the pandemic because “it would not have been the correct thing to do.”
He suggested that “due to basic metrics and fundamentals, the industry is performing extremely well while admitting that “uncertain times lay ahead” due to economic and geo-political issues, which are both changing on the fly. Taking inflation into consideration, retail sales grew by 8.9% through July of this year, including 20% for all food and beverage sales. Occupancy among open-air shopping centers currently stands at 92.2% percent with malls still struggling a bit at 84.5% occupancy.
“Personal savings rose dramatically during the pandemic due to the influx of stimulus money and the fact that consumers had few options to spend money,” McGee stated. “The federal government injected more than $6 trillion into the economy during the pandemic and that money has to go somewhere and there is still a tremendous amount of capital out there. With apologies to Charles Dickens, we are currently living in the best of times and also the most uncertain of times but, with strong industry fundamentals including retail sales, everyone is hopeful about the future.”
Featured lunchtime speaker Brian Solis, a digital anthropologist and futurist, continued with the theme of optimism and uncertainty.
“During times of uncertainty, businesspeople tend to hunker down, protect what they have and become risk averse, and that’s OK,” Solis explained. “Everyone is yearning for normalcy in their professional and personal lives, but in actuality, things have changed too much over the past two years and that is an unrealistic expectation. People are generally feeling anxious, nervous and scared and times like these are a breeding ground for innovation.”
Calls to create experiential shopping
He explained that consumers have had a great deal of time for reflection over the past several years and have come to the realization that the allure of experiences is what drives them to retail venues and shopping centers. He said a visit to Bass Pro Shops, with its immersive environment that provides consumers the opportunity to test drive equipment, is the “Disneyland for outdoorsmen.” That’s why it is incumbent upon tenants and shopping centers to reimagine traditional spaces, as well as the transactions themselves. Solis encourages designers, when re-imaging spaces, to remake them in a way that “evokes an experience you want people to feel, remember and share.”
Experience is the anchor and space is the media, Solis said. Digital technology plays an integral role in executing this idea, Solis said, and brands such as Uber have contributed to the impatience of society. People want everything now, if not before. Retailers know that most people are never more than six feet from a communication device, so retailers such as Panera Bread and Best Buy have introduced apps that take advantage of this behavior change. For example, when consumers enter a Panera Bread, there are separate lines for people who are there to pick up their online order and for those who haven’t yet ordered.
Solis said that consumers are switching brands quickly and effortlessly and retailers need to adapt accordingly. He related that 90% of consumers are shopping differently in search of new brands and that 88%–up from 80% two years ago–say the store experience is just as important as the product or service itself.