REAL ESTATE

A New Lease on Curbside

As curbside demand stays high and foot traffic bounces back, retailers could soon have a harder time than a Trader Joe's shopper when it comes to finding parking spots.

Quick recap: Curbside pickup became the omnichannel service du jour when stores closed for Covid-19...and has remained an important part of the New Retail Normal ever since. 

• Click and collect sales, incorporating curbside pickup, made up 9.1% of total US e-comm sales last year, up from 5.8% in 2019, per eMarketer data. 
• An October Ipsos survey found 78% of shoppers had used curbside pickup, or BOPIS, since the pandemic's start. 69% planned to use it at the same level, or higher, post-pandemic.

When curbside enthusiasm jumped last year, landlords and retailers easily found space in their parking lots to accommodate. 

“Retailers didn’t necessarily have to request close parking spaces be converted to short-term spots,” Stephanie Cegielski, VP, research and public relations for the International Council of Shopping Centers, told Retail Brew. “Many landlords took the initiative to dedicate the closest spaces for the benefit of the retailer and the consumer.”

Going forward: “We'll renegotiate to get specific spots where people can park to pick up,” Kecia Steelman, chief store operations officer at Ulta Beauty, told us regarding upcoming lease negotiations. She said it’s a matter of safety and convenience. 

Anyone else? Other retailers declined to comment on their curbside negotiations. But their actions tell us curbside is a crucial feature. Walmart’s rerouting more store-fulfilled online orders to curbside, and Target has allocated up to 12 extra spots per store for the service. 

Curbside pickup lines 

Moving forward, real estate experts told us shopping centers have new considerations when handing out parking spaces to retailers...

1. Shoppers’ behavior. Store-goers are ignoring their Fitbits: they prefer fewer steps between car door and store door. For malls, that could mean returning temporary curbside slots to free-for-all parking.

2. Retailers’ preparedness. “Owners should consider only those brands that are making the right investments to ensure curbside will succeed and so add value to their property,” said Phil Granof, CMO of retail management platform NewStore. Right investments = dedicated curbside staff, insurance, and easily identifiable curbside signals. 

3. Properties’ features. Marie Driscoll, managing director of luxury and fashion at Coresight Research, and Cegielski both said factors from location to number of tenants ultimately determine how shopping centers divvy up space.

Driscoll added the service is losing steam at mall properties: only 20% of mall tenants are offering curbside pickup in malls where it’s enabled. That’s a drop from the start of the pandemic, she said, when malls were testing the service.

The takeaway: With shoppers returning in-store and opportunity costs rising, negotiations for curbside spots could get tougher. — HL

M&A

Paying for Keeps

Homebound shoppers are running out of rooms to renovate. But Lowe’s, midway through implementing its “Total Home” turnaround plan, is reupholstering its product assortment to get ahead of the anticipated sales slowdown. 

Lowe’s last week acquired Stainmaster, a best-selling carpet brand it exclusively sold for more than a decade, making it a private label. Deal terms weren’t disclosed.

The future floorplan: Immediate day-to-day sales and operations aren’t changing yet, Lowe’s SVP of Global Merchandising Sarah Dodd told Retail Brew. But down the line, she said Lowe’s could deploy Stainmaster’s product knowledge and customer data to create new items. Ranking high: additional flooring categories. 

The bigger picture: Acquisitions to create private labels aren’t unheard of. Lowe’s has snapped up several brands before, including allen + roth (home decor) and Moxie (cleaning supplies).

• “Strategically, it can often make sense to strike [acquisition] deals versus developing your own [brand] to get speed and reduce market risk,” Steve Dennis, consultant and author of Remarkable Retail, told us. 
• Sales-only partnerships don’t offer retailers the same level of control, Dennis added.

Bottom line: Lowe’s knows the scent of wood shavings can’t compete with reopened bars. So to supplement its expansion into new categories, it’s investing in higher margin, high affinity brands like Stainmaster. — HL  

SPONSORED BY SAILTHRU

For Retailers, It’s a Whole New...Everything

So things are opening back up. But that doesn’t mean it’s going to be business as usual.

Retailers need to set a higher standard for customer experience that’s based on new buyer behaviors, priorities, and preferences. 

Lucky for you, you don’t have to guess about that stuff because Sailthru is here to help. Their 2021 Retail Personalization Index Consumer Survey has all the juicy retail deets you need to know as you reopen your doors.

You’ll discover:

• How to better engage omnichannel shoppers and convert them into customers
• The true business potential of value-based personalization
• Strategies that make your online interactions as valuable as face-to-face conversations
• And, you guessed it, a bunch more super smart stuff

Be ready for your customers in 2021 and beyond. Download Sailthru’s survey right here.

E-COMM

Drip or Drown

Like an e-commerce phoenix, Lord & Taylor has risen from the ashes of Chapter 11 bankruptcy, reborn as a digital-only platform. 

The Saadia Group acquired Lord & Taylor and its parent, Le Tote, for $12 million in an October bankruptcy auction. In August, Saadia also snatched up e-comm business RTW Retailwinds, including Fashion to Figure and New York & Co.

• Saadia wants to leverage Lord & Taylor’s name recognition and social media profile to court former in-store shoppers, Nick Kaplan, president of Fashion to Figure, told Retail Brew. 

“They have a presence. When you have that, you're starting from the middle of the pack. You're not starting from the beginning,” Marshal Cohen, chief industry advisor at NPD Group, told us. 

Revenge Tour

Lord & Taylor isn’t the first legacy retailer to restart from bankruptcy as an online-only venture. American Apparel came back in 2017 with a new digital store alongside an entirely different approach to its manufacturing. 

You only get one chance...Cohen says online comebacks like Lord & Taylor’s need to fire on all cylinders out of the gate for success. Digital shopping loses the “touch and feel” appeal of impulse purchases, making it easier for customers to move on. 

There’s “a big difference when the consumer's already made the effort to get to you, rather than now, when—at the flick of a finger—they can just discard you,“ he said. — KM

WHAT ELSE IS BREWING

• The Honest Company’s target valuation for its upcoming IPO: $1.5 billion.
• Madewell released its first standalone app. 
• Nestlé is reportedly considering acquiring the maker of Nature’s Bounty vitamins.
• LVMH opened a deadstock fabric sourcing platform, per Vogue Business. 

SPONSORED BY BYZZER (POWERED BY NIELSENIQ)

CPGs <3 Gen Z. Sorry, millennials, you’re not the cream of the marketing crop anymore. That distinction, according to our friends at Byzzer, now belongs to Gen Z. That’s why more up-and-coming CPG manufacturers are shifting their marketing budgets toward Gen Z maximalism. Knowing how to do this is important, whether you sell a pair of tube socks or a tube of toothpaste. Get Byzzer’s free trend report on the marketing shift toward Gen Z here.

HOT TOPIC

Over the past half-decade, influencers have gone from internet punchlines to bona fide celebrities, which means retailers are trying to capitalize on their new status as moneymakers.

• West Elm recently debuted an ambassador program featuring a group of social media creatives. 
• Aldi attributes a lot of its recent success to influencers who highlight the company’s products. 

You tell us: Are social media influencers the best ambassadors for retailers? Cast your vote here.

Last week...we asked, is frictionless grocery shopping here to stay, or are customers jonesing to get back in the aisles? 58.6% believe frictionless is the future, but 31.4% don’t agree. 

SWAPPING SKUS

A roundup of today's top retail longreads.

Power moves: You may have heard Katrina Lake will step down as CEO of Stitch Fix in August. You may not have heard Lake in conversation with her successor, Elizabeth Spaulding, about the subscription platform’s next steps. (Fast Company)

Atomic reactions: Sustainable fashion writer Alden Wicker explores a pollution solution brought to us from the year 2050...micronuclear reactor tech. (The Goods)

Staying power: HelloFresh and Tonal explain how they’ll extend their pandemic performance through 2021 and beyond. (CNN Business)

ICYMI

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