Hooray for Holiday!
- Dec 01, 2014
Experts in the retail sector of the commercial real estate industry believe it’s going to be a good holiday season–a really good holiday season. They can practically smell it.
“I believe this will be the best Black Friday weekend and Christmas season in the last seven years. The reason being that there’s a lot of optimism in the air,” Greg Maloney, president & CEO of commercial real estate services firm JLL’s Americas Retail Group, told Commercial Property Executive. “The consumer confidence index is at an all-time high since late 2007. People are feeling better. Gas prices are down. There’s just this air of excitement of people thinking things are better. Maybe they’re not but people want to believe that they are.”
JLL anticipates an increase in sales of approximately 5 to 6 percent, and expects that both virtual and real stores will see the traffic. Reports of the brick-and-mortar store’s death have been greatly exaggerated.
“The consumer is going after either a product or a deal, and whether they get that online, in the store, order it online and pick it up in the store, order it in the store and have it shipped to them–whatever, they don’t really care,” Maloney added. “They look at it as, I want to get a good deal or a good value and whether it’s on line or in the store, I’m going to get it. Doorbusters–literal doors, not the online ones–are as popular as ever this season, and it’s no mistake that nearly 30 percent of respondents to a JLL survey noted that they would open their stores on Thanksgiving Thursday for the start of the Black Friday weekend.
Although online shopping continues to rise, the retailers’ non-virtual doors remain wide open during the holiday season because the year-end retail extravaganza is about more than a great sale. “People want to be seen, they want to be around,” Maloney said. “Can you imagine saying, let’s have a great day shopping tomorrow, let’s get on our computers for three hours and then maybe we can go have lunch? That’s not how it works. You’re going to say, let’s meet here, let’s shop, let’s go have some lunch and then let’s go over here, maybe we’ll catch a movie, we’ll catch the deals at night. It’s a lifestyle thing and that’s not going to change.”
And what of the wireless generation? Well, while they may appear to be physically attached to a couple or three mobile devices, they are also driven by the almighty shopping experience. As Maloney explained, “You have to realize that the Millennials grew up in a mall, they grew up shopping. Online is just an additive for them; they’ve got a great place to research the product, a great place to look for deals, but ultimately, they’re going out to the mall. Even if they’re shopping online, they’re probably walking through the mall and doing it on their mobile device.”
The holiday shopping season extends through New Year’s Day, but the after-Christmas sales may not be as good as they once were. Jeff Green, president & CEO of retail real estate consulting firm Jeff Green Partners, told CPE that with new controls in place and software programs, retailers have been keeping a much more trained eye on inventory over the last few years, which could leave some consumers with less merchandise to grab during the final discount days of December. “You could see some out-of-stock items a couple of days before Christmas and then that translates into having less merchandise after Christmas, so actually, the after-Christmas sales are becoming a little less relevant,” he added . “They may be good sales, but you won’t find them on a huge variety of merchandise. For years, if a retailer’s inventory controls weren’t great, they weren’t quite sure what they were selling and when they were selling it, so there was a lot more merchandise post-holiday than we’ve seen in the last couple of years.”
As for sales numbers during Holiday Season 2014, Green agrees with his fellow experts that there will certainly be a notable increase, but he points out that the real story will emerge around February 2015, when retailers begin to announce their earnings. He noted, “Everyone is so value focused and sale-price focused and doorbuster focused that the question is, is anybody going to buy anything at full price? I doubt it. So the bigger concern is not sales, it’s profit. That will be the story we really have to watch, because if profits are down, that may affect the expansion plans of certain retailers. That’s big gauge for them.”