REBusinessOnline

Marry Online Efficiency With Brick-and-Mortar Retail, Say Experts at ICSC Chicago Deal Making

Online retailers such as Warby Parker have started opening physical stores across the country. Pictured is one of the eyeglass company's Chicago locations.

CHICAGO — How retailers can best integrate online and brick-and-mortar sales as well as utilize new technology to analyze shopper activity were two of the most prominent discussion points at this year’s Chicago Deal Making & VRN Outlet Convention. The event, hosted by the International Council of Shopping Centers (ICSC), took place at Navy Pier on Oct. 17-18 and attracted more than 2,400 registered attendees.

In a recently released study from ICSC, a new store opening was shown to boost a brand’s web traffic within that market by an average of 37 percent. There’s a special term for it, known as the “halo effect.”

The magic formula for today’s retailers and shopping centers is to marry online efficiency with brick-and-mortar locations, according to Karen Fluharty, partner with Montville, N.J.-based Strategy + Style Marketing Group. Fluharty’s remarks came during the “Future of Outlets” session.

Today, an omnichannel presence is increasingly critical to a retailer’s competitiveness. Online retailers with growing sales have started successfully transforming their “clicks” into “bricks.” Warby Parker and Bonobos are two of the most well-known online retailers with a steady expansion of physical stores.

Karen Fluharty, partner with Strategy + Style Marketing Group, led the “Future of Outlets” session.

What’s beneficial for outlet centers is that nine out of 10 consumers say they shop at discount retailers, according to Fluharty. “They enjoy the thrill of the hunt,” she said.

Lee Ra Johnson, assistant vice president of outlet leasing for Macerich in Kansas City, joined Fluharty in the presentation. She discussed the success of the company’s Fashion Outlets of Chicago, a 538,000-square-foot indoor outlet center located in Rosemont near the Chicago O’Hare International Airport.

Tourism is an important part of the outlet center’s traffic and sales volume given that there are numerous hotel rooms within a one-mile radius of the center, said Johnson. Earlier this year, the Chicago Tribune reported that the outlet center’s owner reported sales of $810 per square foot in a Securities and Exchange Commission filing.

Macerich is now developing the Fashion District Philadelphia, which will encompass three city blocks in the heart of Center City Philadelphia. In a joint venture with Simon, Macerich is also developing Los Angeles Premium Outlets in Carson, Calif. Completion is slated for fall 2021.

How to study your shoppers

Approximately 58 percent of low-income consumers (households earning less than $50,000 per year) are still shopping in physical retail spaces, said David Lobaugh, president of Woodstock, Ga.-based August Partners Inc., a market research and strategic planning firm specializing in retail development and revitalization. He led a session titled, “What’s Next: Consumer and Technology Trends Driving Today’s Retail.” Fittingly, Dollar General and Aldi are the retailers currently opening the most number of stores nationwide, according to Lobaugh.

A big portion of Lobaugh’s discussion centered on “geo-fencing,” a term used to describe a virtual perimeter around a shopping center or geographic area. In terms of retail, shopping center owners or developers can conduct a geo-fencing case study to analyze the origin and frequency of shoppers within the defined area.

“The game changer is the GPS (global positioning system),” said Lobaugh. The GPS on a consumer’s cell phone can be tracked to determine how many times that individual chooses to return to a specific property and for how long.

The ICSC Chicago Deal Making & VRN Outlet Convention took place at Navy Pier on Oct. 17-18 and attracted more than 2,400 registered attendees.

Each phone has a unique 40-digit tracking number and it can be further tracked by zip code in order to unveil the shopper’s place of residence. This data is telling of not only how many trips to the shopping center, but also how far the consumer travels to shop there.

Those completing geo-fencing studies must use the data smartly so as to not overstep the privacy of consumers, warned Lobaugh. But there’s a world of opportunity in the data, such as the ability to analyze traffic patterns and co-tenancy dynamics.

In December 2017, JLL launched PinPoint, its own geo-fencing tool. In its own words, the firm is “tracking the holy grail of consumer data.” JLL can use the data to advise its investor and retailer clients, and “give them the upper hand to better locate and lease space.”

One JLL-managed retail property highlighted by Lobaugh is the repositioned Rosedale Center in Roseville, Minnesota. Originally opened in 1969, the regional mall underwent a massive renovation that was completed in time for last year’s holiday shopping season. Rosedale’s sales exceed $600 per square foot, according to the Minneapolis Star Tribune.

To stay afloat in today’s ever shifting retail sector, it’s important to use data and monitor consumer demographics in order to capture the right tenants for a certain property. “The right tenant mix for the market is vital,” said Fluharty. “It’s more important than any marketing effort.”

— Kristin Hiller

Get more news delivered to your inbox. Subscribe to France Media's twice-weekly regional e-newsletters. Click here.



Related News

subscribe


Conferences