icsc hawaii 2016: finding our future in retail

Finding our futurein Retail

Greg Maloney

President & CEO

JLL Americas Retail,

ICSC Board of Trustees

Today’s topics

Three Forces Shaping

Retail Today

Five Trends Impacting

Retail’s Future

Three forces

shaping U.S. retail

Economy

E-commerce

Experience

Economy

As the workforce grows, so grows retail sales.

April 2015 Unemployment Rate

Economy

Source: Bureau of Labor Statistics

5.4%

USA

4.1%

Hawaii

3.6%

Honolulu

7.9

17.1

9.6

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

1-m

onth

net

cha

nge

(tho

usan

ds)

U-6 Unemployment

Source: JLL Research, Bureau of Labor Statistics

True unemployment is still well above past lows.

Economy

Economy

Only 46.1% of Americans are engaged in full time employment,

with 30+ hours per week and a regular paycheck. Source: 7/14/16, Gallup Good Jobs

111.998.0

0

20

40

60

80

100

120

140

Con

sum

er c

onfid

ence

Inde

x

Source: JLL Research, Conference Board

Consumer confidence still below its last peak.

Economy

Source: Conference Board, June 2016

U.S. Job Market

Economy

23.4%

Say jobs are “plentiful”

23.3%

Say jobs are “hard to get”

Source: JLL Research, Conference Board

A growing gap between the present and future.

Economy

Present Situation

Future Expectations

0

20

40

60

80

100

120

140

160

180

Con

sum

er c

onfid

ence

Inde

x

discount luxury

“middle” stores

Discount vs. Luxury Retailers

Economy

Economy

Value shopping is now for everyone. Low-income families plus higher-income shoppers

who’ve now developed a taste for discounts.

Economy

Millennial shoppers have grown up expecting discounts and bargains.

e-Commerce

e-Commerce

2016 Headlines

92.3%

7.7%

Bricks-and-Mortar

e-Commerce

7.7% of all retail sales are e-Commerce.

Source: U.S. Census Bureau

e-Commerce

U.S. Retail

Sales,

Q1 2016

What percentage of e-Commerce

sales come from traditional

bricks-and-mortar retailers?

e-Commerce Penetration for Select Product Categories, 2005-2030F

Source: Forrester, Bain

e-Commerce

e-Commerce Penetration

Actual Forecast

Experience

What does experience really mean?

Experience Maslow’s Hierarchy of Needs

Commoditized goods,

Internet/impersonal

shopping

Premium goods,

experiential shopping

Experience

An “experience” means shoppers are meeting their higher-order needs.

Experience

Travel and tourism is a large driver of experience retail.

Experience

Source: World Tourism Organisation

Global Tourism Outlook – Tourist arrivals forecast to reach 1.8 billion by 2030 globally.

Experience

Source: Hawaiii.gov

Hawaii Visitor Volume Will Exceed 9 Million by 2018

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2005 2007 2009 2011 2013 2015 2017 2019

Mill

ions

Visitor volume

Experience

Source: CoStar, JLL

Retail Vacancy Rate

2.3%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2008 2009 2010 2011 2012 2013 2014 2015 2016 (Q2)

Hawaii San Francisco Los Angeles South Florida New York City

Five trends impacting

retail’s future

Food, food, food!

Touch screen transformation

Merchandise with meaning

Reality star treatment

Fan base

In 1992 we spent $163 at grocers for every $100 in restaurants.

Today we spend $96 at grocers for every $100 spent in restaurants.

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

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Grocery stores ($M)

Restaurants & bars ($M)

Source: U.S. Census Bureau

Food, food, food!

food, food, food!

What’s a food hall?

A new food hall in Omaha’s Westroads Mall opened in December.

Food, food, food!

Technology is set to transform physical shopping.


Mobile payments

Loyalty rewards

Order-ahead

Custom orders


Panera 2.0 is fully digital. Mobile app, instore kiosk and web ordering combined.


Smart fitting rooms

Touch-screen mirrors

POS mobile checkout

Communal tables with charging stations


Nike’s #BetterForIt campaign focuses on female empowerment.

Merch with meaning

Organic sustainable food is no longer the domain of the high-end grocer.

Merch with meaning

Fanbase

lululemon creates its fan base with free yoga classes.

Fanbase

Starbucks Roastery is a living coffee museum at 20,000 square feet.

Fanbase

Consumers want to be treated like the stars they see in the media.


Magic mirror technology delivers a customized experience.


Three forces

shaping U.S. retail

Economy

E-commerce

Experience

Five trends

impacting retail’s

future

Food, food, food!


Merchandise with meaning


Fan base

Finding our futurein Retail

Greg Maloney

President & CEO

JLL Americas Retail,

ICSC Board of Trustees