HIGH STREET RETAIL DISRUPTORS

Transcription

1 HIGH STREET RETAIL DISRUPTORS JUNE 21, 2018 DAVID LAPIERRE VICE CHAIRMAN CBRE RETAIL SERVICES

2 PROMINENT 2018 RETAIL DISRUPTORS TECHNOLOGY THE CONSUMER

3 TECHNOLOGY AS A DISRUPTOR: E-COMMERCE E-COMMERCE AS A SHARE OF TOTAL U.S. RETAIL SALES, $ TRILLIONS (L) 2 5.5% 6.1% 6.8% 7.5% 8.3% 9.4% 9.7% 10.5% % OF TOTAL RETAIL SALES (R) E-COMMERCE SALES (L) NON-ECOMMERCE SALES (L) E-COMMERCE SHARE (R) Source: U.S. Census Bureau & Statistsa

4 TECHNOLOGY AS A DISRUPTOR: E-COMMERCE BRICK-AND-MORTAR CONSOLIDATION Many retailers are decreasing their standard store size and/or consolidating store portfolios to comprise a more prominent flagship or branding vehicle to help bolster and optimize their omnichannel platform. HERALD SQUARE/34 TH STREET: Seventh Avenue, 27,000 SF* W 34 th Street, 31,000 SF* Broadway, 63,000 SF SOHO, BROADWAY: Broadway, 30,000 SF* Broadway, 23,000 SF* 2018 Actively seeking to consolidate *Closing soon

5 TECHNOLOGY AS A DISRUPTOR: E-COMMERCE OMNICHANNEL FULFILLMENT The ship-from-store tactic enables a retailer to remain competitive in the digital age by utilizing physical space in a dual capacity as a storefront and fulfilment center for walk-in customers, click & collect orders, and online orders. Source: Barron s, 06/27/2017 Amazon s acquisition of Whole Foods and its nationwide network of 444 stores would put Amazon within a one-hour drive of over 70% of the U.S. population. Most of New York City is within a ten-minute drive from a Whole Foods.

6 TECHNOLOGY AS A DISRUPTOR: M-COMMERCE MOBILE BANKING & GROCERY SHOPPING The rise and development of mobile banking has rendered many bank branches only useful for a limited list of services and as a result, many banks are decreasing average branch size and downsizing branch networks. BANK OF AMERICA NEW HIGH-TECH ADVANCED CENTERS BofA s new Advanced Centers are meant to create a middle ground between their full-service financial centers, ATMs, and the online/mobile platforms. The new centers require less square footage, enabling the bank to decrease overhead and total square footage across their entire portfolio. Source: Bank of America Newsroom, 02/26/2018; American City Business Journals, 01/09/2017

7 TECHNOLOGY AS A DISRUPTOR: M-COMMERCE BANKS IMPACT ON MARKET SUPPLY TOP 10 MANHATTAN BANKS BY # OF BRANCHES: Bank # of Branches Avg. Branch Size (SF) Chase Bank 139 6,800 SF Citibank 77 5,500 SF TD Bank 64 4,800 SF Bank of America 58 5,400 SF HSBC 46 3,800 SF Capital One 44 5,800 SF Apple Bank 21 2,800 SF Wells Fargo 20 3,800 SF Santander 18 2,000 SF Popular Comm. Bank 17 4,000 SF Aggregate: 504 5,300 SF TOP 10 MANHATTAN BRANCHES Total # of Branches = 504 Est. Total SF (based on avg.) = 2,671,200 SF If 20% closed or downsized = 534,240 SF

8 THE CONSUMER AS A DISRUPTOR: POP-UP SHOP CONSUMERS ARE MORE ENTICED TO VISIT A POP-UP SHOP THAN A TRADITIONAL RETAIL STORE BECAUSE OF ITS UNIQUE OFFERING AND FLEETING NATURE 38% Consumer who shop online weekly and said they d be likely to check out a pop-up 50% Subscribe to monthly subscription boxes and said they d be likely to check out a pop-up 29% Prefer traditional brick-and-mortar shopping experience and were into the pop-up option Source: Euclid Evolution of Retail: Consumer Survey Report April 2018

9 THE CONSUMER AS A DISRUPTOR: POP-UP SHOP BUMBLE DATING APP THE HIVE NYC POP-UP CONCEPT The Bumble Hive offers a safe space to foster new connections as well as connections made through the group s dating app. Complimentary snacks, drinks, and entertainment are all offered at the venue. Bumble opened a series of pop-ups in various urban centers including New York, Los Angeles, and Toronto. Source: TheBeehive.Bumble.com

10 THE CONSUMER AS A DISRUPTOR: EXPERIENTIAL RETAIL % OF CONSUMERS THAT FIND AN IN-STORE VISIT MORE EXCITING IF THE RETAILER USED TECHNOLOGY Millenials 51% Generation X 38% Baby Boomers 23% 0% 10% 20% 30% 40% 50% 60% Source: Euclid Evolution of Retail: Consumer Survey Report April 2018

11 THE CONSUMER AS A DISRUPTOR: EXPERIENTIAL RETAIL SEPHORA BEAUTY TIP WORKSHOP CONCEPT STORE (two locations opened in Manhattan on Fifth Avenue and 34 th Street) The Beauty TIP (teach, inspire, play) stores feature a centralized Beauty Workshop workstation where clients can take group beauty classes with Sephora's educated facilitators, watch tutorials and use Sephora Virtual Artist technology on integrated in-store ipads, or gather inspiration from The Beauty Board, a shoppable gallery on a large digital screen. Each station is equipped with its own products, ipad, USB port and Wi-Fi, so customers can play, browse and share looks on the digital screen and online, right from their seat. Source: Retail Dive, 04/02/2017

12 THE CONSUMER AS A DISRUPTOR: EXPERIENTIAL RETAIL DYSON DEMO STORE (three U.S. locations Manhattan, Virginia, and San Francisco) Dyson technology is extremely unique within its product verticals. The company is opening up demo stores around the world to enable the brand to engage with its consumers in an educational and experiential way. Customers can test out all of their latest products in stores and even schedule a blowout in-store done by a salon professional using Dyson s supersonic hairdryer. Source: Dyson.com

13 A FEW OF TODAY S ACTIVE RETAILERS QUICK-SERVICE RETAURANT HEALTHCARE BOUTIQUE FITNESS CICKS TO BRICKS

14 A FEW OF TODAY S ACTIVE RETAILERS Quick-Service Restaurants As consumers demand for more experience based retail grows, the food sector continues to see positive growth momentum, especially amongst the health-conscious users as well-being is a top priority for the millennial generation. Healthcare New tech-enhanced medical offerings are on the rise as accessibility and health & wellness grow in priority for today s consumer. Companies, such as Forward, are changing the nature of primary care through a personalized approach to preventative care and managing all aspects of the patient s health.

15 A FEW OF TODAY S ACTIVE RETAILERS Boutique Fitness Consumers today are very health conscious and additionally, crave personalized connections with a brand. Boutique fitness studios continue to see strong demand as they foster a unique culture and sense of community while simultaneously solving for consumers fitness needs. Clicks to Bricks Many pure-play e-commerce retailers are starting to open physical retail stores to merge the online with hands-on experiences through digitally enhanced, more personalized store models. The physical platform enables the consumer to personally engage with a brand and learn about the brand s DNA through physical touch points.

16 THANK YOU! DAVID LAPIERRE Vice Chairman