Many predicted the pandemic would spell the end of retail. And while COVID-19 certainly has had impact on the sector, a recent survey by Levin Management Corporation of its more than 120 property tenants, said things are looking up.
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.
Other data points of note:
- 19% anticipate sales will remain steady during the coming months;
- The combined “improve/remain steady” response percentage is more than 10 points above the survey’s trailing average.
“What a difference a year makes,” Levin CEO Matthew Harding said. “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.”
Harding also pointed to a study by Retail Dive that predicted stores will still account for three-fourths of retail sales in 2024.
Of course, not all is great in the retail industry.
More than 70% of LMC respondents are currently hiring – and nearly 80% of that group indicates it has become harder to find qualified job candidates in the current environment – a statistic supporting ongoing, industrywide discussion of retail labor shortages, “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.”
This much is clear: Retailers embraced changed – much of which was led by technology – and say the business model will never be the same.
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.
Today, 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.”
Here are just some of the data points on technology:
- 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.
- 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.
LMC vice president of marketing Melissa Sievwright said she isn’t surprised.
“We have tracked consistent growth over time in how our tenants are incorporating technology to service and reach customers,” she said. “The tools ranked most popular have held steady, but with wider adoption over the past several years.
“Some – such as e-receipts and text messaging – have gained notable traction, which likely correlates to retailers amassing more contact information. From a business standpoint, it’s all about data, and our tenants are clearly using it to their advantage.”
About the survey: LMC’s annual Mid-Year Retail Sentiment Survey explores 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.