The State of Retail

August 04
The State of Retail

“But, can I really afford this?” is a question many ask themselves when making a significant purchase of something they really want versus something they really need. This notion (and sometimes nagging thought for shopaholics on a budget) is referred to as Consumer Confidence, an economic indicator which measures how optimistic consumers feel based on their overall economic state and their personal financial situation. The basic concept of Consumer Confidence is actually pretty simple. If the economy is doing well and consumers are making more money, then they are more likely to make substantial purchases or purchase something that does not fall in the boundaries of basic necessities; a new car, an outfit for a special event, an excessively large television, and the list goes on.

Luckily for retailers today, the Consumer Confidence Index (CCI), a scientific measure by The Conference board, a non-profit business group, of the overall confidence, relative financial health, and spending power of the average US consumer, is on a steady, upward move. This is evident in increasing mall occupancy rates across the country as reported by The Wall Street Journal.

 "U.S. malls occupancy as of March 31 is 95.8% occupied, up from 95.5% a year earlier, as the base minimum rent per square foot increased 11% to $47.59 SF. Total sales per square foot grew 7.8% to $621." ¹

As the CCI continues to rise, retailers are growing, adding, and re-designing stores while many online retailers are adding brick and mortar locations. Evidence of this growth is everywhere - including in the halls of a recent industry trade show, RECon. RECon is held in Las Vegas every May and is one of the industry's largest trade shows produced by International Council of Shopping Centers (ICSC). Attendance was estimated at 35,000 attendees and 1,000 exhibitors exceeding that of previous years.

The growing trend behind CCI is a cycle, linking the state of the economy directly to the state of retail which accounts for roughly 70 percent of all economic activity.² As more retail and brick and mortar stores arise throughout the US, additional workers are required to staff and manage newly rooted locations. In turn this creates a rise in employment and boosts consumer confidence, further exemplifying the theory.

As retail regains its strength, it's important that stores are designed with not only the company's brand in mind but also in a way that suits the needs of the consumer. No one wants to frequent a shop that is understaffed, cluttered, or aesthetically unpleasing. Retailers must influence consumer confidence through strategic layout, design, and the retail experience.

1. http://www.wsj.com/articles/simon-property-profit-rises-on-higher-occupancy-rates-1429875050

2. http://www.usnews.com/news/business/articles/2015/06/30/consumer-confidence-index-climbs-to-1014-in-june

 

For more on NELSON’s Retail Practice, please contact Eric Eberhardt, Director of Retail Practice at: EEberhardt@NELSONonline.com

 

NELSON Insights

FOCUSING ON TAMI Solutions

To experience more, click HERE.
 

NELSON announced its intent to launch TAMI (Technology, Advertising & Media, and Information Business) Practice Area. 

 

FOCUSING on music and design

To experience more, click HERE.
 

Looking for a fresh new concept that not only captured elements of the music industry but also the city of Minneapolis, Pandora Internet Radio turned to NELSON to provide interior design services for the renovation of their existing office in the IDS Tower.

 

creating design that "takes off" 

To experience more, click HERE.
 

Gogo commissioned NELSON to create a final workplace solution that would allow for aggressive growth and flexibility while considering new ways of working in a collaborative space.

 

Gogo

CREATING new office design

To experience more, click HERE.
 

Amidst a transitional time period, the Philadelphia Convention and Visitors Bureau commissioned NELSON to design an open, flexible, cutting-edge work environment for their team. 

Philadelphia Convention and Visitors Bureau

FOCUSING ON WORKPLACE DESIGN SOLUTIONS

To experience more, click HERE.
 

NELSON and Veenendaal Cave, Inc. Officially Join Operations, establish the Southeastearn USA as a “Super Region”.

 

NELSON and Veenendaal Cave, Inc. Join Operations

FOCUSING ON THE CLOUD AND BEYOND

To experience more, click HERE.
 

Fieldglass commissioned NELSON to redesign space with a focus on the creation of a more collaborative work environment allowing for a more efficient workflow.

Fieldglass Inc