Retailers and commercial real estate companies alike are feeling good about the retail brick-and-mortar recovery.
Sixty-percent of commercial real estate leaders and 55% of retailers expect a return to pre-pandemic levels by the end of the year – a testament to the resilience of consumers and a strong desire to safely visit brick-and-mortar retail, according to a new ICSC survey of retailers and CRE companies.
With safety top of mind, stores plan to sustain the changes made during the height of the pandemic for the foreseeable future. Nearly 80% of small CRE firms are likely to continue using plexiglass barriers to protect employees and shoppers during the next 12 months, and 76% reported a plan to continue shortened hours – compared to just 53% of larger firms. Large CRE firms have prioritized increased sanitation (76%) over other restrictions, while independent retailers (58%) are prioritizing crowd management.
The pandemic propelled retailers and retail real estate through years’ worth of transformation in a matter of months, and leaders expect a wave of innovation – in both offerings and store formats – to continue as the “store of the future” becomes a reality, according to ICSC.
The survey found two-thirds of retailers began offering in-store fulfillment of online orders in response to the pandemic, while 73% of small retailers implemented a click-and-collect option. According to CRE leaders, an overwhelming 88% of shopping centers are being used to fulfill online orders. Nearly all (99%) of retail respondents reported their stores fulfilled online orders to some degree.
In other findings, retailers and CRE firms have worked to increase accessibility for quick trips (46% and 50%, respectively), and three-in-four retailers have used their parking lots to accommodate curbside pickup.
“For retail and retail real estate, the COVID-19 pandemic hasn’t spurred a total reinvention, but a rapid acceleration of trends that were already taking shape,” said Tom McGee, president and CEO of ICSC. “Stores were already offering curbside pickup, ramping up click-and-collect and rethinking store formats. What we’ve seen since March is a remarkable expansion of that, which will create a better experience for consumers as they return to stores and shopping centers.”
Both retailers and CRE firms have planned targeted investments in digital marketing and online storefronts to keep up with the convergence of online and physical retail. Survey respondents said they intend to invest both online and in-store: Seventy-eight percent of large retailers said their marketing efforts will center around the digital customer experience. And 73% noted in-store sales were a priority.