How Retailers Are Transforming to Get Your Attention this Holiday Season
November 21, 2022 4 Minute Read
Millions of Canadians are about to get back into stores for their first holiday shopping spree since the pandemic. You may notice that things have changed as retailers look to capture your attention and dollars.
Not so long ago, holiday shopping started by leafing through catalogs for the latest and greatest gifts. Now companies target customers through a much larger retail marketing strategy backed by extensive research. With each generation come new ways to connect with consumers, such as Instagram for Millennials and Tik Tok for Gen-Z. Retailers are even starting to venture into the metaverse.
“Retail marketing is always changing,” says CBRE’s Toronto-based Vice President Kate Camenzuli, who attended the International Council of Shopping Centres (ICSC) Conference in Toronto in October which had all the major retail brands in attendance. “One message that was loud and clear at the conference is that you can no longer separate online retail from brick and mortar. The overall ecosystems that retailers create drive sales on each platform while being inclusive and experiential.”
Retailers who want to thrive are building retail ecosystems that incorporate both the physical and virtual worlds, serving customers in all the channels that they’re shopping through and finding new customers across the digital landscape.
(Image credit: Future)
Let’s Get Physical
Not all retail is created equal. Much like in the office market, retail is divided between high and low-quality space. Businesses with means are looking to make their physical locations as attractive to customers as possible.
A flight to quality is resulting in higher rental rates for newer retail spaces, and landlords with the most desirable locations and buildouts are being presented with multiple offers. Meanwhile, landlords with older and less attractive spaces have to be creative and adjust their pricing to attract tenants.
“Shopping is an experience. You feel a brand before you bring it home. Many downtown properties are undergoing redevelopment and repositioning as tenants seek-out higher quality spaces so they can deliver that feeling and experience that makes shoppers want to spend,” says CBRE Senior Vice President Alex Edmison, who is part of the Urban Retail Team selling and leasing space in Toronto.
Selling in the Digital Era
While established brands continue to build trust among loyal followers, younger brands have to stand out. The most successful retailers, especially newer brands, are establishing their presence and cutting through the noise with the help of creative marketing and a strong online presence. A user-friendly website, a loyal social following and glowing reviews are essential to a brand’s success as digital touch points compliment the in-person shopping experience.
Some companies such as Samsung and Macy’s are even exploring the Metaverse. This enables retailers to interact with clients in a new way. For example, testing out different store layouts and decor prior to investing in real world renovations or allowing customers to make purchases directly in the Metaverse.
“The retail experience is no longer a store, it’s an ecosystem,” says Edmison. “All retail segments are becoming increasingly interdependent when it comes to attracting and engaging customers.
“That’s why having the best data to understand customer needs to inform retailer strategies is more important than ever.”
Coming to an Ecosystem Near You
Expect more service and less stuff. Camenzuli sees the growth of service-based retail locations. IKEA has begun to open planning studios to help customers seeking advice on elaborate renovation projects like redoing a kitchen or bathroom.
Other service-based retailers expected to grow include grocery, food and beverage, children, and pet services.
In 2023, Edmison predicts a boost in the wellness sector, specifically the medical cosmetics segment. Watch for shops offering red-light therapy, IV injections and other cosmetic procedures, coming to a neighbourhood near you in 2023.
A Recession-Sized Lump of Coal?
Looming over ICSC this year was the possibility that consumers could limit their spending this holiday season due to inflation, interest rate hikes and a potential recession.
“When retailers struggle, it's usually because consumers are struggling. I sympathize as a consumer and retail service provider, but we all have to remember that we’ve learnt from and survived economic cycles before,” says Edmison. “This too shall pass, but the retail ecosystem will only get more advanced in the meantime.”
“The best data, resources, relationships and experience are key to managing and thriving in periods of change. The retail sector has stabilized, but that doesn’t mean the end of dynamism. We’re just entering a very exciting period for retail.”
Stephanie Garant considers real estate to be a critical component of economic growth and social development. After several years in marketing and sales, she joined CBRE Montreal’s capital markets team in 2018.
Stay In The Know
Subscribe today and join hundreds of professionals who get the latest blogs delivered straight to their inbox.