Directory of Major Malls
Directory of Major Malls

Retail Data is Driving Big Changes in Physical Retail Locations

Retailers are shaking up their brick and mortar strategy in an effort to increase sales levels and maximize their investment in physical retail locations.

According to a report from A.T. Kearney, 90% of retail sales still happen at a physical retail location. The shifting role of the brick and mortar store, driven by more insightful retail data and the growing prominence of online channels, will have a dramatic impact on the industry.

Retail Data and the Integration of Online Channels

Physical and online channels are beginning to merge into a single seamless purchasing experience, as detailed by the International Council of Shopping Centers’ (ICSC) recent Envision 2020 report, which outlines retail experts’ views of the future of the industry.

retail dataShow-rooming, where physical locations don’t carry any inventory and serve solely as a place to view products in-person, and web-rooming, where consumers can browse for new items online and then buy at a retail store, are two early examples of the integration of online and physical channels.

The shifting role of the brick and mortar store runs even deeper than this, however. Kohl’s is a fascinating example of the interplay of all these elements. In March, the company reported its largest quarterly sales gain since 2001, following a sustained effort to reduce store sizes through leasing partnerships with Aldi, Amazon and other companies.

Kohl’s was able to make this turnaround for a few reasons. First, CEO Kevin Mason said that heavy investments in online e-commerce and in-store pickup allowed their stores to be smaller. Kohl’s digital sales in the fourth quarter alone rose 25%. Kohl’s physical locations become more closely aligned with online sales channels, including allowing for returns of Amazon products in stores with leasing partnerships. Online sales picked up the slack while big changes were made in physical locations.

The second way Kohl’s produced such a dramatic turnaround, and possibly more importantly, was the use of deep retail data on demographics specific to each store location. With this insight, they were able to effectively choose leasing partners that would draw more foot traffic and provide value to residents of that area. Also, with a smaller store format, they could carry less inventory and a narrower range of products while still effectively serving the needs of consumers in that area.

This use of retail data to completely alter the format of physical locations, with growing online sales supporting revenue streams throughout the process, is a great example of how retail data is driving changes at the same time that digital and physical channels are beginning to support one another.

Retail Data Informing Shopping Center and Retail Investment

As these shifts occur in the retail industry, it’s critical that developers, real estate investment trusts (REITs), and Wall Street investment firms keep a close eye on retail trends.

Retail and shopping center data on industry changes, portfolio and asset sales, store openings and closings, new construction and development, among other retail data points, are helping companies like these navigate the shifting retail landscape.

The ICSC Envision 2020 report predicts a rosy investment outlook in the near future for major shopping centers, only increasing the importance of retail and shopping center data to inform investment decision.

retail dataComprehensive, historical retail data is being used by investment firms to see where the retail industry has been over the past few decades, while hedge fund advisors match historical revenue figures to retail expansion and recession trends to better understand the market. Even banks and financial firms use current and historical retail data to create predictive models within the commercial mortgage-backed securities (CMBS) market.

Historical retail data is a valuable commodity for those in the retail industry. Directory of Major Malls | (DMM) data goes back 27+ years, making it a useful resource for trend projections, expansion analyses, market saturation studies and more.

As industry data helps retailers respond to consumer demands and find innovative new ways to merge online and physical channels, much of this same data is used in the broader financial community to remain agile to retail trends, particularly the shifting role of physical retail locations and their impact on sales volumes.

Retail data is vital to inform strategy in a changing retail industry. Retail data and the converging of digital and physical channels will be a hot topic at this year’s ICSC RECon convention in Las Vegas – one of the largest global retail real estate conventions.

To learn more about the importance of retail data and how it can benefit your company, be sure to visit Directory of Major Malls | (DMM) at the RECon convention! DMM is the leading provider of comprehensive retail and shopping center data with 8,300+ major shopping centers, 315,000 tenant locations and over 26,000 VIP contacts.

Stop by booth #N1329 to visit DMM at the global ICSC RECon convention!

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