Retailing in 2011 Presented by John Williams September 24, 2011 March 2004 The Retail Market 2011 1
U.S. Retail Sales Index (2004 = 100) 130 120 110 100 2004 2005 2006 2007 2008 2009 2010 Jun-11 3 Source: U.S. Census Bureau Canadian Retail Sales Index (2004 = 100) 130 120 110 100 2004 2005 2006 2007 2008 2009 2010 Jun-11 4 Source: Statistics Canada 2011 2
Consumer Confidence Index January 2004 July 2011 125 Canada U.S. 115 105 95 85 75 65 55 45 35 25 U.S. confidence restated from Nov. 2010 by the U.S. Census Bureau January-04 July-04 January-05 July-05 January-06 July-06 January-07 July-07 January-08 July-08 January-09 July-09 January-10 July-10 January-11 July-11 5 Source: U.S. Conference Board, Canadian Conference Board Store Types: Leaders vs. Laggards (CAGR 2005 2010) Health and Personal Care Stores 3.9% Food Services General Merchandise Stores 2.8% 3.4% Leaders Food and Beverage Stores 2.4% Clothing and Accessories Stores Sporting Goods, Hobby, Book and Music Stores 1.7% 1.6% 6 Miscellaneous Store Retailers 10% 1.0% Electronics and Appliance Stores 0.5% Building -2.8% Material and Garden Equipment Stores -3.4% Furniture and Home Furnishing Stores -4% -3% -2% -1% 0% 1% 2% 3% 4% 5% Compounded Annual Growth Rate (2005-10) Sources: U.S. Census Bureau Laggards 6L 2011 3
Retail Lifecycle Changes Rapidly Sales & Profit Growth Personalization/ Customization Home Delivery Automated Shopping Digital Download Home Improvement Teen Specialty Retailers Supercenters Quick Casual Rest. Hard Discount Dollar Stores E-commerce Lifestyle Retailers Office Superstores Discount Hypermarkets Stores Supermarkets C-Stores Drug Stores Wholesale Clubs Fast Food Book Stores Traditional Furniture Stores Department Stores Variety Stores Toy Music Retailers Superstores Video Stores Emerging Growth Maturity Decline 7 Source: McMillan Doolittle Trends in the Market - 2011 2011 4
J.C. Williams Group Strategic Retail Compass Model Trends segmented using J.C. Williams Group s Strategic Retail Compass model Approach is from the consumer solution perspective. Need a 5 to succeed! E-conomical: Saves me money E-xperience: Gives me a good time E-go: Helps me express myself E-asy: Saves me time 9 9 Ego Luxury retail continues to be strong during the economic slowdown Bal Harbour Shops luxury mall had sales increases of 24% (for 2010) and 27% (to April 2011) Members-only prices for luxury products (e.g., Gilt Groupe) to masstige products (e.g., Coach, Lululemon) Status still has its place! 10 Source: trendwatching.com, Shopping Centres Today 2011 5
Experience Westfield Shopping Centre London Eataly New York 11 Westfield Shopping Centre London Breaking Rules? Moving Forward! Wow! Here is a review as of November 2010 Size: 1.6m square feet Tenants: 280 retail units, with retailers from over 15 countries Food tenants: 65 places to eat Shopper Traffic: 23m footfall 170m invested in public transport 12 2011 6
Restaurant Row as an Anchor 13 Wide Aisles Are Filled With Kiosks and Food/Beverage 14 2011 7
No Food Court As We Know It Food is everywhere as shown Restaurant court around the center court Cafes come out into the center court 15 Eataly New York 16 2011 8
Selection and Explanations 17 Economic Gapmyprice.com Consumers continue to be enticed by savings and deals From dollar stores to group discounts (e.g., livingsocial) to deal-making retailers (e.g. GAP); the more this trend evolves the more it stays the same 18 2011 9
Economic Providing cost savings has its own price Groupon s cost to acquire a new customer went from $7.99 in 2010 to $23.46 in 2011 19 Source: Wall Street Journal, Groupon Easy Online Grows Stronger Online sales increased 12.6% last year and is expected to reach $279 billion by 2015 20 Source: Forrester, 2011, trendwatching.com 2011 10
Easy Mobile Propels Easy to New Levels! Mobile commerce is estimated to account for $31 billion in 5 years accounting for 7% of overall e-commerce sales QR codes and mobile applications provide additional information for users and help create a great downtown experience Red Laser provides a local search tool to find nearby stores and restaurants Happy Hour Finder, used by tourists and residents alike, helps users find the cheapest drinks or the best happy hour spots Information is easier and quicker to access than ever 21 Source: Forrester, Mobile Commerce Forecast: 2011-2016, trendwatching.com A Glimpse of the Future 2011 11
Homeplus (Tesco) in South Korea Summary Rate your retailers retail lifecycle What is your downtown s strategy? Which E? Is your downtown trend-right? What trend is your anchor? Are you harnessing technology? Can you coach your retail partners to the future? 24 2011 12
Thank you and keep in touch. Toronto, Chicago www.jcwg/umc/umc.html (416) 929-7690 John Williams, jwilliams@jcwg.com 2011 13