That’s according to the latest mid-year retail sentiment survey from Levin Management, a New Jersey-based commercial real-estate services firm with 95 properties in its shopping center portfolio.
As 2016 approaches the half-way mark, retail tenants signaled strong year-to-date performance and optimism for the remainder of the year, Levin said, with 65.8% of store managers surveyed reporting mid-year sales at the same or higher volume year over year. By comparison, just over half (51.9%) reported same-or-higher sales in 2015’s mid-year survey and 42.9% in 2014.
Similarly, 61.3% said shopper traffic volume year-to-date was the same or higher compared to 2015, and 67 percent said they expect sales to continue at the same pace or better through the end of 2016.
“Retail is experiencing solid momentum following the stock market volatility and bankruptcy announcements that kicked off the year,” Levin’s president, Matthew Harding, noted. “The latest retail sales data from the U.S. Commerce Department, which shows a 2.4% year-over-year increase for March to May, reinforces what our tenants are saying.”
The firm pointed to digital technology as the reason for its tenants’ strongest year-to-date sales report in the poll’s history. Of the respondents actively using technology-centered marketing—such as online ads, mobile apps, social media, e-mail and texting—42.4% said they increased the volume since 2015 and 52.7% reported doing a similar amount as last year.
When it comes to engaging customers in store, 69.9% of respondent who are active in tech-centered marketing said they use mobile device apps to offer customers coupons, discounts and loyalty points. That’s in line with a recent ICSC customer engagement survey, which discovered that two-thirds of U.S. consumers use their mobile devices while shopping in brick-and-mortar stores. Free in-store WiFi (49.3%), post-sale online surveys (41.9%) and e-receipts (28.7%) are other popular tools used by the firm’s retail tenants.
“For the second year, social media and e-mail ranked as most popular among Levin survey respondents active in tech-centered marketing, used by 79.4 and 78.1 percent, respectively,” Melissa Sievwright, vice president of marketing, said. “The power of these tools is clear, and social should be on everyone’s radar.”
Facebook is far and away the leader in social media marketing—91.3% of respondents use it, while only 36.9% and 34.2% said they use Twitter and Instagram respectively.
Levin’s mid-year poll also highlighted the potential brick-and-mortar stores see in adapting their business model in the face of e-commerce growth. Some respondents said they are adding in-store services and incentives (62.7%), incorporating in-store pickup and return options for online orders (57.6%) and increasing collaborative efforts with their online counterparts (44.1%). Others are altering store inventory (35.6%), introducing “experience” draws (30.5%) and changing their store prototypes (13.6%).
“Based on activity within our portfolio, we expect the experiential retail trend, especially, to gain momentum,” Sievwright said. “The re-invention of this industry is well underway, driven both by tech advances and new shopper preferences. Millennials and Baby Boomers alike are opting to invest in experiences over things. Smart companies are melding lifestyle with shopping and giving consumers a reason to step into the store. Think demonstrations, classes, performances and exhibits to compliment fashion, jewelry, footwear and furniture.”