Holiday shoppers are expected to spend more at retail this year, and companies are doing more to ensure they claim additional dollars.
Retailers are wading into the holiday season following several years of pandemic-influenced consumer shifts and changing shopping patterns, and a new report from commercial real estate services firm CBRE is detailing the key trends they’re focusing on. Thanks, in part, to this focus on things like increased inventory, labor optimization and enhanced experiences, CBRE expects holiday retail spending to rise 6.9% over last year to $1.48 trillion.
In an effort to counteract the supply chain problems faced in 2020 and 2021, the first thing many retailers are doing is stocking more inventory closer to the customer. According to CBRE, this has entailed moving from a “just-in-time” model of stocking only what is forecast to be needed to a “just-in-case” model of having deeper inventories farther ahead of the season.
“This year’s holiday season is already illustrating the adaptive nature of retail and retail real estate,” said Bill Wright, senior managing director for Retail Advisory Services in the Americas at CBRE. “Dramatic changes in shopping patterns and practices due to the pandemic spurred retailers to think differently and early about their stores, their operations and their supply chains, with the goal of delivering a better shopping experience and higher sales.”
Additionally, retailers are taking multiple approaches to address labor challenges, including reducing store hours, leaning more on their e-commerce operations and even redesigning physical stores to make them more efficient for online pickup operations.
Finally, added services and experiences are making it easier for retailers to leave a lasting impression on their customers. CBRE has found that the Santa-for-hire business is up 121% from 2019 to 2021 and is expected to build even more steam this holiday season.
“Although faced with many obstacles, the retail industry has been remarkably resilient and should fare well during the 2022 holiday season,” CBRE’s report stated. “Holiday shoppers should be out in force at prime retail centers, utilizing mobile technology for on-the-move product research and to make purchases at the time of their choosing."