AZ Big Media How Phoenix retailers are adapting to changing shopping habits with new strategies

Phoenix’s commercial real estate landscape has seen a 2% decline in vacancy since the third quarter of last year, underscoring Valley residents’ desire to return to pre-pandemic buying habits, which is made easier thanks to the warmer temperatures and the plethora of the region. of outdoor shopping venues.

Retailers have applied lessons learned from the past two years of pandemic-influenced shopping patterns to position their stores and e-commerce operations for this year’s holiday season, according to CBRE’s annual report. Guide to Holiday Retail Trends. These adaptive strategies are expected to help push national holiday spending to a 6.9% year-over-year increase in fourth-quarter retail sales to $1.48 trillion, based on CBRE’s analysis of the projections of several sectors.

To anticipate the challenges that have disrupted holiday shopping in recent years – including labor shortages, scarcity of certain merchandise due to supply chain disruptions, and superior e-commerce growth versus in-store sales – retailers at all levels are largely focused on three key elements. trends in 2022, according to the CBRE report.

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1. More inventory, less out of stock

Supply chain disruptions have rattled the retail sector in 2020 and 2021 as shuttered factories and congested ports have created shortages of certain goods in stores and online. Retailers and e-commerce companies have solved this problem this year by stocking more inventory closer to the customer, whether in stores or warehouses closer to major population centers.

This involved moving from a “just in time” model of stocking only what was needed to a “just in case” model of building larger stocks further in advance of the season. In many cases, this has resulted in jam-packed warehouses and larger-than-usual loaded shipping container inventories behind stores or in storage areas. This is one of the factors that pushed the vacancy rate for rented warehouses in the United States to a meager 2.8% this year, compared to 3.6% last year.

2. Solve the job puzzle

The pandemic has caused labor market disruption and displacement that the retail sector, among others, is still grappling with.

Retailers are taking several approaches to address the labor challenge. Some have reduced store hours, including several national retailers that have announced they will not open Thanksgiving this year. And some are leaning more into their e-commerce operations, as it has often proven easier to staff the fulfillment role in warehouses than to find more associates for retail stores.

Another adjustment concerns the layout of the stores; many retailers have redesigned their stores to dedicate space for employees to quickly fill online orders and separate space for customers to pick up those orders, making stores more efficient and enabling better connection between stores. sellers and customers.

3. Come for the experience, stay for the shopping

Senior Vice President of CBRE Todd Foger noted that the valley’s temperature during the holiday season makes it a great place to shop outdoors and for malls to provide a customer experience.

“Outdoor malls like Scottsdale Quarters, Kierland Commons, and SanTan Village provide consumers with both a great shopping experience and outdoor festivities that keep them wanting to stay longer and drive consumer engagement with consumers. different retailers,” Folger added.

Retailers and mall owners have been experimenting with improving space creation for years, which often involves adding services and experiences. Many mall owners have converted once vacant storefronts into Instagram-worthy moments and displays. Examples include the Netflix Stranger Things experience in Los Angeles, Atlanta and London and the Princess Diana exhibits in malls in Las Vegas and near Washington, D.C.

Finally, Santa Claus is there to help you. Santa rental business grew 121% from 2019 to 2021 and is even busier through the 2022 holiday season, according to Santa booking company Hire Santa. The traditional visit from Santa has evolved in recent years to include online appointment booking, online ordering of prints and more photo shoots with pets. Several large retailers, such as massive outdoor retailers with stand-alone stores, have added visits from Santa to their locations.

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