There are many tricks to getting the best deal on any given product these days, with comparison shopping no longer a case of just checking prices and features but of working the system to trigger deals.
Many of the strategies were discussed during and after the recent NAIOP review of retail real estate, underscoring the challenges bricks-and-mortar retailers face in what session moderator Jennifer Lee, a partner with Deloitte based in Toronto, called an "omnichannel" environment.
Anticipating confusion with Vancouver multicultural television station Omni Channel, Lee defined the environment as one blending physical stores with online and mobile commerce.
But panellists convened for the event – notably, Chris Chan, principal of Northwest Atlantic (Canada) Inc., and David Morris, principal of Form Retail Advisors – were keen to speak in defence of bricks-and-mortar retail.
"It's not dead; it's evolving," quipped Morris early on in the discussion.
While retailers need to adapt, Chan pointed out that e-commerce is still the baby in the omnichannel environment and is being accommodated in various ways.
Joe Granato, director of global initiatives for Lululemon Athletica Inc., said understanding the nuances of each market is fundamental to each store Lululemon opens – but he also noted that Amazon has effectively become "Google for retail." It is where people start shopping – and partnerships with it can be key to bricks-and-mortar survival.
Looking ahead, Morris said major grocers and other retailers will consolidate to improve margins in order to compete with online retailers. That means exacting concessions from suppliers – including the landlords who supply them with space.
Chan also didn't count retailers out, noting that physical locations would adapt to serve emerging needs in the marketplace.
But when an audience member asked what it all meant for the 1.2 million-square-foot mall Ivanhoe Cambridge is developing on Tsawwassen First Nation land, panellists respectfully declined to weigh in.
Investment down
With 1.75 million square feet of retail space planned as part of the billion-dollar development of Tsawwassen First Nation land, not to mention the 377,000 square feet of outlet stores the MacArthurGlen Group plans on Sea Island, one might think all the retail trade was revving up.
But the latest Statistics Canada report on the retail trade's capital investment intentions indicates a 7.2% drop in 2014. Capital expenditures by the retail trade this year will total a respectable $1.26 billion, the 11th-biggest spend in B.C., but that's down $98 million from 2013. By contrast, the wholesale trade intends to spend 18% more on capital costs this year, or $866.9 million. Meanwhile, housing – the single biggest source of investment in B.C. – will see an additional 3% this year, or $15.5 billion.
Positive news
Vancouver is under-retailed, but perhaps that's a good thing when it comes to boosting the performance of local malls.
A survey of retail sales by Ryerson University retail management student Hilary Taylor – now an e-commerce planning intern for AnnTaylor.com, the site of Ohio-based women's fashion designer Ann Inc. – indicates that Pacific Centre in downtown Vancouver has the highest sales per square foot of any mall in the country at $1,335. (See "Ka-ching! Cashing in on Metro Vancouver retail properties" – page 26.)
The sales numbers are a credit to the malls in question and reinforce observations Jim Smerdon, vice-president and director of retail consulting with Colliers International in Vancouver, made in this space last fall.
Smerdon noted that malls are to Canada's urban cores what street-front retail is to the downtowns of New York and other cities. And with mall sales surging, developments such as what Ivanhoe Cambridge plans for Tsawwassen First Nation – not to mention its recently approved overhaul of Oakridge – stand to have bright futures indeed.
Mea culpa: Postmedia Network Inc.'s printing plant in Kennedy Heights opened in July 1997, not 2007 as reported in last week's column. •
