By Kate Snyder
Lessons learned from the past two years of “pandemic-influenced” shopping patterns are expected to help boost holiday spending among Portland retailers, according to CBRE’s 2022 Holiday Retail Trends Guide. Based on CBRE’s analysis of multiple industry projections, the forecast is that adaptive strategies such as increased inventory, advertising experiences in addition to shopping and adjusting labor needs will increase holiday spending to $1.48 trillion nationally, a 6.9 percent increase year over year in fourth quarter retail sales.
CBRE’s Portland retail leasing team, Austin Cain and Taki Chalkiopoulos, said that Portland retailers are implementing these strategies as a boon to this year’s holiday spending season.
“Shoppers are returning to brick-and-mortar stores after a couple of years of hunkering down and subsisting on e-commerce purchases for goods and services,” Cain said. “This is particularly true in the suburbs, where we’ve seen a tremendous increase in new retail operations, allowing businesses to meet consumers where they live.”
Chalkiopoulos also said the increased traffic in Portland’s suburban retail outlets is also buoying restaurant sales despite increased food costs.
“As shoppers return to stores, they’re finding a new class of chef-driven eateries closer to home,” Chalkiopoulos said. “Restaurants have adapted to labor and supply shortages by slimming down their menus and focusing on recruitment to provide great service. That’s especially important during the holidays when shoppers want the experience of a nice sit-down meal after shopping.”
Retailers are focusing on three key strategies, according to the report. The first is stocking more inventory closer to the customer, such as in stores or warehouses, to counter the supply chain disruptions that impacted the retail industry in 2020 and 2021. The second is addressing the labor challenge, which retailers are tackling in a multitude of ways, including reducing store hours and leaning more on e-commerce operations. Finally, retailers are putting more stock into experiences alongside shopping, like converting vacant storefronts or space into exhibits – for example, the Stranger Things Experience in Los Angeles, Atlanta and London, as well as Princess Diana exhibits in shopping centers in Las Vegas and near Washington, D.C.
Citing a Deloitte survey of retail executives, the report states that 68 percent of those surveyed say a shortage of employees is one of their biggest challenges. At the same time, non-store retail employment – e-commerce – has grown by 12.4 percent over the past three years, compared with a growth of 1.7 percent for total retail trade employment, the report states, citing the St. Louis Federal Reserve Bank.
E-commerce, however, also comes with a 15 percent to 30 percent higher product return rate than brick-and-mortar stores, according to the report. And with an e-commerce penetration rate of 19 percent, there could be up to $85 billion worth of goods returned during or immediately after the 2022 holiday season. Per the report, reverse logistics company Optoro estimated that two out of three consumers return at least one gift during the holiday season.
Overall, though, the report paints an optimistic picture for the retail industry this holiday season.
“Although faced with many obstacles, the retail industry has been remarkably resilient and should fare well during the 2022 holiday season,” the report states. “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.”
