REAL ESTATE

Open for business

Everything’s bigger in Austin, including demand for commercial real estate space.  

Texas’s fourth-most populous city is a hotspot for many industries, and retail is no different: 22,000+ jobs were added to Austin from companies expanding or moving into the city in 2020, compared with 13,562 in 2019, according to the Austin Chamber of Commerce. 

• The city overtook Los Angeles as the No. 1 commercial real estate market for potential deals, according to an investor survey from CBRE Group earlier this year. 

“By the end of 2020, we were pretty busy, but we hadn’t returned to the same level of activity that we were at prior to the pandemic beginning,“ John Heffington, a retail service broker at CBRE’s Austin office, told Retail Brew. “What we saw in February or March of this year was just an explosion of activity and new retailers looking to enter the market along with current retailers who are looking to expand within our market.”

• Deals that were put on hold because of the pandemic were pushed over the finish line once retailers were confident in reopening, Heffington said.

Retail Brew spoke with retailers in the Austin area to discuss the market’s strengths and how their stores have performed during the pandemic. 

Hello, neighbor

Department store Neighborhood Goods opened its new Austin location days before lockdowns were put into place last March. CEO Matt Alexander said since reopening in June 2020, Austin has been one of the retailer’s best performing stores. 

• During the pandemic, the company debuted a marketplace concept in its Austin store, featuring DTC brands like Fly By Jing and Parlor Coffee. 
• “One of the things that’s shifted is we’re just seeing a lot of the brands, founders, and partners that we would typically associate with being in New York or LA spending a lot of time in Austin,” Alexander said. 

Crown jewel: Jewelry brand Kendra Scott has been based in Austin since it was founded in 2002. The company’s three Austin stores (plus 21 other shops in Texas) reopened earlier than its other US locations, close to Mother’s Day 2020. The company hasn’t looked back since. 

• CEO Tom Nolan told Retail Brew the Austin market was very receptive to new initiatives Kendra Scott introduced as a result of the pandemic, including curbside pickup.  
• “We’re seeing traffic levels in our retail stores even exceeding levels of 2019 and [the same in] a lot of regional areas right now,” Nolan said. 

Looking ahead: Austin was an emerging market before the pandemic, Anjee Solanki, national director of retail service at Colliers, told us. Should demand continue to increase, rent prices will rise while labor costs will fall.

But the question now is how the broader Texas market will fare after passing its new anti-abortion bill; some workers are already planning to relocate and companies worry it will impact recruitment.—KM

POLICY

Calling the shots

President Joe Biden’s administration took a drastic step last week to combat the Delta variant: Large employers—companies with 100 or more workers—are required to mandate vaccines or provide weekly testing. 

The federal directive was met with mixed reactions from the retail industry. 

• The American Apparel & Footwear Association wholly endorsed the measure, saying the “only way to address the economic fallout from” the virus is widespread inoculation. 
• The National Retail Federation offered a more tepid response, saying it appreciates “the administration’s commitment to ensuring workplaces are safe despite the ongoing challenges of the pandemic.” 
• Brian Dodge, president of Retail Industry Leaders Association, was more skeptical, noting that “requiring large employers to mandate vaccination” would be a major undertaking. 

Zoom out: The retail industry boasts the country’s No. 1 and No. 2 largest employers: Walmart and Amazon. And while the NRF’s statement acknowledged that many major retailers have taken it upon themselves to require vaccination (those include CVS, Kraft Heinz, TJX, and others), the measures have mostly stuck to corporate workers. 

• Boosting vaccination rates among frontline workers have mostly relied on incentives.—KM

SPONSORED BY PAYCOM

People Really Like Getting Paid

Ya know, that’s just something we’ve noticed about people. And that’s why for an employer, the pressure to get payroll right couldn’t be higher. 

Unfortunately, getting payroll right can also be full of challenges—82 million employees nationwide are affected by payroll errors. But with Paycom’s Beti, you can smooth out those roadblocks and pay your people on time. 

Beti is an industry-first, employee-driven experience that improves data accuracy, reduces employer liability, lowers direct deposit reversals, and more. 

Another thing we’ve noticed about people? They don’t like being left hanging. That won’t happen with Beti, because employees can see the paycheck details and identify errors prior to payout. 

One final observation about human beings: They like to do their work, not get bogged down in redundant tasks. Beti can free up your time—especially if you’re in HR—to focus on priorities other than payroll.  

Learn more about Beti from Paycom here. 

DATA

Small biz, big tech

We talked about large employers above. Now, we’re talking small biz. 

Salesforce surveyed 2,500+ global SMBs about how the pandemic impacted their strategies and values. Here are the top takeaways.

Logging on: Covid lockdowns forced companies to shift online: 75% of the SMBs polled said their customers now expect them to offer digital transactions; 72% have an e-comm operation, and 35% of them implemented it just within the past year.

•  71% said their business survived because of digitization.

Tech helped SMBs survive in more ways than one. What kind of tech, you ask? We’re talking about customer-service software (currently, 53% of SMBs use it) and protection against cyberattacks (95% of SMBs made moves to secure company data and protect customer info).

• We’re also talking about contactless services (91% of retail SMBs will use these permanently).

“​When we look at the top reasons that SMBs have moved operations online over the past year, two of the top five are around safety,” Laura Norman, director of marketing at Salesforce for SMB, told Retail Brew—43% of surveyed businesses said they’re implementing tech and e-comm for customer safety, while 32% said they want to provide safer working conditions.

Getting together: Community was also crucial in buoying the retail and consumer goods sectors. Over three-quarters of SMBs in the industries said government and community support helped them survive the pandemic, per Salesforce data.—JG 

WHAT ELSE IS BREWING…

• Walmart said news of a partnership with litecoin, a cryptocurrency, isn’t true. 
• Drunk Elephant is coming to Ulta Beauty after years as a Sephora exclusive.
• Paper supply is running low with the rise of the Delta variant.
• Amazon could face a probe over the treatment of its pregnant warehouse workers at the urging of six senators.
• ABC Carpet & Home filed for Chapter 11 bankruptcy. 

FROM THE CREW

Five lessons from Allbirds’ journey to IPO. Allbirds, the sustainable lifestyle brand, just filed for an IPO. Listen in to our cofounder and executive chairman, Alex Lieberman, discuss their growth journey on his podcast, Founder’s Journal. Listen to it here.

SWAPPING SKUS

Today’s top retail reads. 

Shipwrecked: “Half the options we get offer no ship space for weeks, and there is a race to get space on the other half.” (the Wall Street Journal)

Page-turner: A year and a half later, is Bookshop.org still a boon for independent bookstores? (TechCrunch)

Step by step: What we can learn from the pedestrian malls of years past. (Bloomberg)

EVENTS

Products are not made by mistake. There is a whole team of seemingly disparate divisions inside a company that brings an idea into our world, and then ultimately, our homes. 

On Tuesday, September 28, at 12pm EST, PepsiCo’s Vice President of Innovation and Capabilities, Emily Silver, will join us in conversation to give us a bird’s-eye view of how CPG products are created, made, and then delivered to store shelves.

Ready to RSVP? We know you are. Click here to register and share your questions. Can’t wait to see you!

*This event is brought to you by Amazon Advertising.

HOT TOPIC

At the mall, it’s where band tees are the only tees. In Retail Brew, it’s where we invite readers to weigh in on a trending retail topic.

Nearly a decade after we were introduced to Google Glass (and we all know how that turned out), Facebook last week debuted its first line of smart glasses, Ray-Ban Stories. 

• FB’s head of hardware Andrew Bosworth predicted, on his podcast, that in a decade, all glasses will include a photo-taking function.

We see you: Are consumers finally ready for wearable tech? Or is it still a Silicon Valley pipe dream? Cast your vote here.

Flashback: Last week, we asked if you thought retailers would buy into Walmart’s B2B offerings, like its GoLocal delivery service. A good chunk (43.2%) answered yes, 38.6% said nope, and 18.2% screamed, “IDK!”

ICYMI

Catch up on the Retail Brew stories you may have missed.

• The cannabis beverage market is bubbling with brands
• A look inside Jokr, the rapid grocery delivery company
• Covid scams have cost consumers $500+ million, with e-comm seeing the most complaints