Episode 22: Thriving vs. Surviving in the New Normal Economy features Alec Pacella, President of NAI Pleasant Valley in conversation with NAI Global EVP Cliff Moskowitz about what the new normal is for CRE and how you can be prepared for it.
If you have any questions, you can reach NAI Global at email@example.com.
Learn more about Alec Pacella and NAI Pleasant Valley at naipvc.com.
‘Tis the season… but this year, everything is different.
As we flew past Halloween and move towards Thanksgiving, Black Friday, and Christmas, all eyes are locked on retail. After such a hectic year, what will this season’s holiday shopping look like?
The 2019-2020 Shift
Last year, even with e-commerce activity at an all-time high, eager shoppers still flooded to stores and malls to do their gift shopping. Despite tons of Cyber Monday shopping, Black Friday’s turnout was impressive across the country. 2019’s holiday shopping season marked a positive direction for CRE’s retail sector – which was much welcomed after a difficult year.
But, that momentum was shot as the pandemic swept through in 2020. Since then, nothing has been the same. As a result, many of those bright outlooks established in last year’s holiday shopping season have been muddied.
This year, anything can happen.
2020 continues to defy expectations. It’s difficult to predict the movements of consumers today, especially with so many different factors pushing and pulling shoppers in different directions. Even beyond sales volume and trending gift items, the commercial real estate market is eager to see how this holiday season plays out for brick and mortar.
To gain insight into the coming months of holiday shopping, let’s explore what experts are forecasting for this season:
Here’s What Experts Are Saying
With COVID still on the radar and social distancing concerns top of mind, consumers likely won’t be hitting the stores like they usually do.
At the same time, e-commerce brands are taking advantage of these pandemic-induced circumstances to win over shoppers during this year’s holiday season. Unbeatable deals, perks, near-instant shipping, and BOPIS will be boasted by online retailers.
All this considered, experts are calling for a major slowdown for in-person shopping this year. The majority of consumers are expected to conduct their holiday shopping on the web, funneling their sales towards e-commerce and away from physical retail.
Now that we know what the experts are predicting, let’s look at how retailers are responding. This is what CRE’s retail tenants are doing to prepare for this holiday season:
Boosting Online Infrastructures
The pandemic prompted even the smallest mom-and-pop shops to open up an online portal to extend their services online.
Now, as the holiday season looms overhead, CRE’s retail tenants are investing in their e-commerce capabilities. Being able to supplement their in-person sales with online transactions is vital for balancing business this year.
Setting Aside Space for Order Fulfillment
With online orders expected to rise alongside a sharp decline in shopper volume, stores are making room for order fulfillment. Portions of retail’s physical spaces will be devoted to inventory, packing, and shipping preparations.
Still Preparing to Welcome Shoppers
Retailers are preparing to welcome shoppers in-store with a pristine shopping experience. Even though the numbers might be lower, retail tenants are still optimistic. Safety, accessibility, and convenience are all major focus points as brands try to win back their foot traffic.
One thing is for sure, whatever unfolds for retail in the coming months has the power to initiate lasting trends for holiday shopping moving forward. Don’t take your eyes off of CRE’s retail sector.
Along with COVID came new problems – many of which had never been considered before in the mainstream.
Going through such an unprecedented situation on a global scale was a major learning experience for us all. And, with everyone seeking progress and clarity, consumers have never been more open to extreme changes.
At the top of everyone’s mind is one question: what can we do to upgrade our existing normals to cultivate greater health and safety? Right now, people are looking for solutions. Consumers are hungry for better protocols that streamline everyday processes.
The ground is ripe for introducing new protocols – and they’ll be hitting the grocery scene sooner than expected.
Today’s developments in the grocery industry are largely being shaped by innovative companies. The competition is high, and big brands are investing heavily to offer tangible improvements to upend consumer experiences. In today’s grocery market, raising the bar is the key to winning business.
Commercial real estate professionals need to stay one step ahead to make the most of these revolutions to the grocery sector. Here’s what the future of the grocery space looks like:
Amazon Sets the Standard
Amazon’s acquisition of Whole Foods marked a major event in the grocery industry. Both online and in-store, Amazon is known for playing hardball. For the past year, grocery-based competitors have been fighting to stay up to par with the ‘Whole Foods Effect’.
Right now, Amazon is boasting it’s latest grocery concept. It’s a multi-phase action plan that will spearhead domestic grocery. Here’s what’s coming:
First, Whole Foods is now offering free one-hour pick-up for online orders made through Prime. Second, Amazon Fresh, a cost-efficient grocery chain, is multiplying across the country. Third, the new payment technology coined Amazon One allows shoppers to pay with their palms.
As seen with 2019’s e-commerce battle, when Amazon does something, other brands are forced to follow the trend. Amazon’s latest movements are expected to spread across the grocery scene next year.
The Rise of Instacart
Remote shopping for groceries is one of those COVID habits that won’t be quick to fall away. Many consumers prefer the ease and convenience of services like Instacart, and this preference will be reshaping grocery’s online and in-person experience.
Expect the online shopping platforms to greatly improve, with more accurate inventories and an easier navigation experience. Right now, Instacart team members are collecting groceries alongside in-person shoppers. Looking ahead, expect that process to take place behind the scenes as grocers allot warehouse-like spaces for online order fulfillment.
New Protocols to In-Store Shopping
Social distancing has already become a norm, but experts anticipate the safety protocols to continue expanding. Contactless shopping, widened aisles, and Smart technology will all be deployed by grocery brands to re-invent the in-store shopping experience.
All this considered, 2021 will be a year of immense change for the U.S. grocery scene. Many of these transformations will extend into the physical space of grocery stores. CRE professionals should be ready to leverage the newest grocery trends to strategize their future movements – so don’t take your eyes off of grocery.
Every generation makes a mark on commercial real estate. We’ve just adapted to the new lifestyle cultures that Millennials demanded, but now, the industry is approaching another shift. As the latest group is coming of age and attending college, they’re creating waves within the student housing sector.
Born between 1996 and the early 2000s, Gen Z isn’t like their predecessors. This generation, upwards of 90 million strong in the U.S. alone, isn’t being won over by the glitz and glam of entertainment rooms and luxury amenities. Instead, they’ve got their eyes on education, careers, and investing in the future.
As Gen Z’s specific wants and needs are dominating the student housing market, it’s changing the way that communities look, feel, and function. Here’s a look at the student housing market right now:
Student Housing Right Now
Like all of CRE, student housing has been through a tough year. This sector suffered massive disruption as the pandemic swept through the country. With markets closed and classes taking place online, many of student housing’s potential tenants left their college towns to shelter with family.
And, those who didn’t leave suddenly had new demands for their communities. Taking classes online meant that college students needed a place that could function as both a home and classroom. Lightning-fast WiFi and cell connection were a bare necessity for academics, and socially-distant essentials like on-site dining options became a must.
It’s true that today’s new demands for student housing were ushered in by the pandemic. But, the shift away from frivolity and towards efficiency was bound to take place within the student market, anyways. These new needs are shaped around Gen Z – the new generation dominating college campuses.
Gen Z’s Influence
Student housing, meet Gen Z.
Gen Z is serious about putting in work, so it shouldn’t be a surprise that this group is looking for utility, accessibility, and productivity in a student housing community. Right now, Gen Z is gearing up to be the best-educated generation yet – out beating the enrollment volume of Baby Boomers, Millennials, and Gen Xers.
The iGeneration, as Gen Z is often called, is swarming university campuses in greater numbers than ever before. There’s strong competition between student housing communities to attract this promising tenant pool – and property owners are ready to meet their demands.
With Gen Z and post-COVID adapting on the radar, here’s what student housing should prepare for:
1. Bolster Tech Infrastructures
Tech investment is pivotal for winning over Gen Z. Make sure your community is suped-up with technology integration.
2. Look to Lifestyle Needs
Amenities will move away from party areas and towards the necessities. Laundry, food and dining, and interior designs are stealing the spotlight.
3. Multi-Function Spaces
With COVID’s stay-at-home culture sticking around, Gen Z needs their spaces to fit multiple functions. Contemporary student housing needs to foster academic work, relaxation, and a healthy dose of fun. Flexibility is key.
Gen Z is a force to be reckoned with, so be sure that your student housing community is meeting their standards.