JLL lays down benchmarks for retail experience
Indoor skydiving and punch-fueled karaoke are surely worthy retail center experiences, but for most retailers the nature of “experientiality” is more elemental.
That was the conclusion of a press conference in a booth of the ICSC RECon Show in Las Vegas yesterday, where JLL released a study identifying six “dimensions of retail experience.” They are:
- Intuitive: Shoppers find quality products, new items, and find them easily.
- Human: They have favorable interactions with knowledgeable associates
- Meaningful: Retailers make a difference in shoppers’ lives, who feel a sense of pride when shopping their stores.
- Immersive: The exterior and interior of the store are captivating and shoppers enjoy spending time there.
- Accessible: Shoppers can shop where they want — in stores or on websites — and the retailer knows their preferences
- Personalized: The experience is how shoppers want it, with associates who understand their unique needs and can satisfy them and offer rewards based on past behavior.
JLL’s Big Red Rooster unit asked 2,000 shoppers to rate 20 national retail chains on these traits based on recent experiences. Receiving the five highest aggregate scores were Apple, Victoria’s Secret, Ulta Beauty, Bath & Body Works, and Ikea.
“Our goal was to create new benchmarks to better understand how well retailers are meeting shoppers’ expectations,” said Big Red Rooster managing director Stephen Jay. “This is just a starting point in measuring how people rate their retail experiences.”
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Report: Retail investment will pick back up in second half
Investment in retail assets plummeted by 46% in the first half of 2018, but JLL predicts a second-half comeback that should end up surpassing last year’s investment increases.
“We’re pragmatically optimistic of today’s market, and are seeing investors begin to rebuild their confidence in the sector as fundamentals strengthen,” said Naveen Jaggi, president of JLL Retail Advisory Services. “Vacancy is stabilized at under 5% nationwide and rents have reached pre-recession levels.”
In a report released at ICSC’s RECon show in Las Vegas, JLL said it based its forecast on the following factors:
- Major markets are still showing stronger fundamentals when compared to the United States as a whole, but even those top tier properties are seeing impacts of retailer fallout. Rents continue to rise but remain inconsistent across major markets.
- Retail construction remains limited with only 14.2 million sq. ft. delivered so far this year. Less with less than one-third of new construction came in the shopping center and mall space, with most concentrated in general retail.
- Leasing remains steady and absorption rates remain in line with 13.4 million sq. ft. absorbed through April.
JLL pointed out that investors were slow to close deals at the beginning of the year, even though such fundamental measures were already showing improvement.
“Sellers are under more pressure to sell than buyers are to buy,” Jaggi said. “There is tremendous opportunity unfolding to buy quality retail at a discount to historical values.”
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