North Plainfield-based Levin Management Corp. (LMC) said July 13 that brick-and-mortar store managers are seeing things looking up, and they report positive expectations for the second half of 2021.
In its Mid-Year Retail Sentiment Survey, the real estate services firm explored year-to-date performance and outlook, hiring, technology usage and more among tenants in its 120-property, 16 million-square-foot leasing and management portfolio.
Nearly 65% of survey participants are optimistic their sales will improve further this year – the highest percentage in the LMC mid-year survey’s decade-long history – and more than half of those respondents believe their sales will grow to meet or exceed pre-pandemic levels in 2021.
Another 19% anticipate sales will remain steady during the coming months. Significantly, the combined “improve/remain steady” response percentage is more than 10 points above the survey’s trailing average.
“What a difference a year makes,” noted LMC Chief Executive Officer Matthew Harding. “Clearly, business is moving closer to normal, and tenants feel this trajectory will continue. Our survey’s street-level sentiment findings are supported by industry groups like the National Retail Federation, which last month adjusted its 2021 forecast to reflect significantly better-than-expected sales growth.
“Further, another key study shows brick-and-mortar will continue to capture a healthy share of consumer spending,” he added.
Within this context, tenants are shoring up staffing, with just over 70% of LMC respondents currently hiring.
Nearly 80% of that group indicates it has become harder to find qualified job candidates in the current environment – a statistic supporting an ongoing, industry-wide discussion of retail labor shortages and jobs openings. “This inability to hire could curb progress to a degree,” Harding said. “The industry will be watching this closely – particularly moving into the fall and toward the critical holiday shopping season.”
LMC’s mid-year survey traditionally explores technology trends, and while the 2021 poll expanded its focus to emphasize performance and recovery, it did take a look at the tech tools retailers are leveraging to reach, serve and engage consumers.
Notable tech takeaways include:
More than 70% of LMC survey respondents offer an online option for purchasing goods, scheduling appointments for services or placing orders for pick-up. This data point has grown steadily since LMC began tracking it in 2017, when less than half of respondents offered this convenience.
Among LMC tenants that leverage technology for in-store customer service, the four most popular tools include digital coupons, discounts and/or loyalty points (used by 63.2%); in-store, online ordering with free shipping for out-of-stock items (used by 48.1%); free Wi-Fi (used by 47.2%) and e-receipts (used by 42.5%).
The three most popular tech-centered marketing tools for tenants that leverage technology for marketing include email (used by 79.4%), social media/social marketing (used by 70.0%) and text messaging (used by 52.8%).
Nearly 58% of LMC survey participants indicated their company is actively employing technology to analyze customer and/or sales data for the purpose of merchandising, creating services and menu options, planning in-store events, or creating individualized special offers.
Savvy brick-and-mortar tenants have known for years convenience is a top priority for consumers, Harding noted, adding the pandemic brought this into laser focus. Flexibility became paramount last year, and retailers adapted in kind. Approximately 85% of LMC mid-year survey respondents implemented changes ranging from added fulfillment options and designated areas for click-and-collect pickups, to shopping appointment times, open-air setups and more.
Nearly 58% of those respondents say they plan to maintain some of these changes as permanent operational best practices. “
The pandemic has changed us,” Harding said. “As consumers and as businesspeople, we found new ways of doing things – and some of them work well. Agile retailers will continue to embrace change with their customers’ wants and needs in mind.”
LMC’s Mid-Year Retail Sentiment Survey was not conducted in 2020; the trailing average is calculated from the 2012-2019.