Cyber Monday Sparks Mall Madness for Store Owners & CRE Industry
Ready, set, shop — it’s Cyber Monday, the largest online shopping day of not only the Thanksgiving weekend, but the year.
According to Adobe Digital Insights, this is expected to be the largest online shopping day in history. And, the upcoming holiday season will see the biggest online shopping spree yet, with expectations of 11% growth year-over-year and $91.6 billion in total holiday online sales.
All of this of comes at the expense of Shopping Malls and other Brick-and-Mortar retailers.
Situs RERC President Ken Riggs says, “Malls need to better figure out how to get shoppers off their computers and back into the mall arena to allow stores to do their job of selling goods, even if the customer ultimately buys from these stores online. Many shopping malls are using entertainment hooks or restaurants, for example, to draw high-end shoppers back.”
There are many reasons why consumers are more likely to shop online during this holiday season. ADI determined that the top include: lower-priced goods, free shipping and product availability as consumers are looking at convenience factors more than ever this year.
“There is good news for mall retailers, however,” says Situs’ Riggs. “We have seen it before with Victoria’s Secret and Apple, and now even Amazon is opening so called ‘pop-up stores’ at the mall this holiday season so shoppers can actually feel merchandise and get out of the house.”
But watch out there’s a new threat to retailers: Ebay just unveiled Mobil Wednesday, the idea was to persuade Americans en route to Thanksgiving dinner to buy lots of stuff while on the road.
Situs RERC President Ken Riggs tells Bloomberg Radio his thoughts on how Brick- and-Mortar stores and the CRE industry can compete against Amazon and other E-tailers.
Click here to listen.
Department Stores Change Tactics to Fight Cyber Retailers
The beleaguered department-store industry, facing declining mall traffic and mounting online competition, will need more than Santa Claus to get customers in the door this year.
Retailers such as Macy’s Inc. and J.C. Penney Co. are preparing for the holidays by offering more exclusive products, store-in-store showrooms and — in some cases — cash rewards.
Though department stores like Macy’s were once synonymous with Christmas shopping, the chains are struggling to rekindle excitement heading into Black Friday — the traditional kickoff to the holiday season. The industry hit an unsettling inflection point last year, when more Americans shopped online than in physical stores during the four-day weekend, according to the National Retail Federation.
“The problem is there’s no silver bullet,” said Ed Yruma, a retail analyst at Keybanc Capital Markets Inc. “What we’re increasingly seeing is a consumer for a holiday season that’s shopping off a list, and there’s no better way to shop off a list than on your computer.”
The biggest piece of department stores’ strategy is offering merchandise you can’t find anywhere else. But they’re also trying to create more of an experience for shoppers — something that goes beyond the typical window displays, Christmas decorations and a Santa taking requests from kids.
Another source of pressure this season: Department stores can’t rely as much on tourist spending. The strong dollar has deterred many foreign visitors from descending on major U.S. cities. And even domestic shoppers are increasingly interested in services, rather than buying physical goods.
That’s contributed to a decline in average mall traffic by 3 percent to 8 percent, according to Craig Johnson, head of research firm Customer Growth Partners.
read more: Bloomberg
Thanksgiving, Black Friday Store Sales Fall, Online Rises
Sales and traffic at U.S. brick-and-mortar stores on Thanksgiving Day and Black Friday declined from last year, as stores offered discounts well beyond the weekend and more customers shopped online.
Internet sales rose in the double digits on both days, surpassing $3 billion for the first time on Black Friday, according to data released on Saturday.
Data from analytics firm RetailNext showed net sales at brick-and-mortar stores fell 5.0 percent over the two days, while the number of transactions fell 7.9 percent.
Preliminary data from retail research firm ShopperTrak showed that shopper visits to such stores fell a combined 1 percent during Thanksgiving and Black Friday when compared with the same days in 2015.
The data highlights the waning importance of Black Friday, which until a few years ago kicked off the holiday shopping season, as more retailers start discounting earlier in the month and opened their doors on Thanksgiving Day.
“We knew it (holiday season) was going to be off to a slow start,” Shelley Kohan, vice president of retail consulting at RetailNext, said.
Thanksgiving and Black Friday online sales tracked by Adobe Digital Index were $5.27 billion, up 18 percent from a year earlier and higher than its prior estimate of $5.05 billion.
Black Friday sales rose 21.6 percent to $3.34 billion, with purchases made on mobile devices contributing more than $1 billion in revenue, both record sales for the day.
Cyber Shoppers Forcing Developers to Eye Warehouse Conversions
Peter Sudler didn’t make the decision to demolish one of his top-end suburban office buildings lightly. But he knew better than to fight the market.
“Rather than sit there with an empty office building I am repositioning it to warehouse distribution,” the developer said.
Sudler Cos. is tearing down a 25-year-old, 500,000-square-foot office building in Cranbury, N.J., to clear the way for 800,000 square feet of industrial space.
Not so long ago, replacing an office building with a warehouse wouldn’t have crossed the minds of many developers. Office space, after all, costs more to build and usually generates higher rents.
A red-hot warehouse market driven by the rise of e-commerce has changed that. Though the numbers are small, several suburban office properties in or near New Jersey and Long Island industrial neighborhoods have been redeveloped as warehouses.
Prices for industrial space are soaring. The average sale price on Long Island is $96.80 a square foot, compared with $62.50 three years ago. In New Jersey, warehouses are going for an average of for $74.84 a square foot, compared with $63.78 in 2013.
read more: Wall St Journal
GE Sells Connecticut Headquarters for $31.5 Million
General Electric sold its former global headquarters in Fairfield, Conn., to Sacred Heart University for $31.5 million.
The move allows Sacred Heart, a Roman Catholic school with about 8,500 students, to expand, but it will result in significantly lower tax revenue for the Connecticut town, where GE opened its suburban office park in 1974.
GE, citing Connecticut’s rising taxes, said in January that it would move to Boston. It said it was pleased to sell its campus, which spans more than 60 acres, to Sacred Heart, calling it “a world-class local university.”
The deal is a mixed bag for Fairfield, said Michael Tetreau, the town’s first selectman.
GE paid the town $1.6 million a year in property taxes on an assessed value of about $80 million, Mr. Tetreau said. The town stands to lose most of that, he said, because as an educational institution Sacred Heart won’t have to pay property taxes.
He estimated that Connecticut would reimburse Fairfield for about $400,000 in lost property taxes.
read more: Wall St Journal
U.K. Loses 15% of Its Millionaires Because of Brexit
The number of dollar millionaires in the U.K. slumped 15 percent as the country’s vote to leave the European Union rattled the pound and the stock market, according to a report by Credit Suisse Group AG.
Household wealth in the U.K. declined by $1.5 trillion, or 10 percent, in the 12 months through June 2016, as “a direct consequence” of the Brexit vote, the No. 2 Swiss bank said in its annual global wealth report published on Tuesday.
“The U.K. had a tumultuous end to 2015-2016, with sharp declines in the exchange rate and the stock market following the vote to leave the EU,” Credit Suisse said in the report. “The outlook is very uncertain, both for the economy and household wealth.”
The U.K.’s $14 trillion in private wealth is spread around 49 million adults, of which almost 5% have $1 million or more. The surprise result of the June 23 vote helped fuel a 15 percent decline in the pound this year and sent the local stock market to its biggest one-day drop since the 2008 financial crisis. While equities have rebounded since then, the country is facing political and economic uncertainty over the terms on which the split will take place.
read more: Bloomberg
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