ICSC RECON RECAP: The Death of Retail is Greatly Exaggerated
We are a few weeks past the end ICSC RECon 2017 and the dust has finally settled on what was by most accounts a strong show. In fact, we had 25% more meetings than 2016, a year I blogged was the most successful of my ICSC tenure (18 years and counting).
Given the tumultuous climate in retail, we thought it would be beneficial to connect with senior real estate and store development executives of major retailer and restaurant companies to get their take on the state of the industry and what the future holds.
Our survey was conducted over three days and we spoke with 50 executives. To our surprise, on average across retail, retail services and restaurants, companies were planning to open 110 new stores in 2017. Additionally, the same companies were planning on remodeling on average more than 194 stores.
Needless to say, we were a bit surprised with the results. And yes, there were a few outliers who pulled up the averages, but at the end of the day, the growth plans are undeniable.
Taking a closer look at the growth numbers by segment, we see that planned restaurant openings outpaced retail by more than 3x, while retail services companies (i.e. fitness, educational, or other service based retail locations) planned on growing about half as much as restaurants.
Restaurants were the clear growth leader across the board, accounting for 60%+ of new store and remodel activity in 2017.
Equally surprising was the response to our question regarding the impact e-commerce has had on their bricks and mortar strategy. From all reports, including this article published after the show, “retail isn’t dying, but evolving, and those that fail to invest online are being pushed aside or off the cliff.”, a comprehensive omni channel approach coupled with an agile brick-and-mortar strategy is a must. It seems that the retailers who we spoke to didn’t get that memo, with 75 percent responding that e-commerce had no or little impact on their bricks and mortar strategy. In fact, only 10 percent of respondents felt it had a significant impact. Given the way retail is trending, it sounds like these retailers need to step up their online efforts.
More and more, our customers have called upon us to study the interaction of the e-commerce channel in relation to the bricks and mortar channel. We help them understand how e-commerce sales impact a particular brick-and-mortar location – demonstrating that in fact, the combination could actually result in increased sales. We then help determine what merchandise to carry, thus establishing the right merchandise mix at a particular location to maximize sales.
Interested in learning more about the results of our survey, and how Tango can help manage both your growth plans?