ICSC Monterey - Shopping_Center_Loan

ICSC Monterey Conference Take-Aways

March 15, 2018

On March 7th and 8th over 1,000 attendees from the western US converged in Monterey, California, for the International Council of Shopping Center’s Monterey Conference (ICSC). Below are some key take-aways from this tech-focused conference.

  • Physical footprint, available last mile inventory and data all provide a “defendable economic moat” for traditional retailers and give them a competitive advantage over e-commerce only retailers.
  • Physical retail space will thrive in the future by integrating technological advances. This includes physical retail’s use of e-commerce along with the use of technologies that collect data and improve the in-store shopping experience.
  • Physical retail’s “last mile” advantage allows them to compete given that 2 out of 3 online shoppers use delivery speed to make their purchasing decision.
  • A poignant example of the value of physical presence was the fact that Amazon spent 3 times their 2014-2016 net operating income on the purchase of Whole Foods.
  • Retailers are beginning to use technology like augmented reality to enhance the shopping experience, allowing consumers to virtually try items (clothing, make-up, furniture) before buying.
  • We are starting to see the growth of technology like geo-fencing; satellite-based GPS mapping of shopper data. These technologies will allow retailers, property owners, and lenders to gain valuable insight into the activity within a specifically designated area. This passive data, obtained from mobile phones’ GPS, will include shopping location, home location and other activity metrics within a predefined “geo-fence”.
  • Retailers will expand their use of geo-tracking to provide enhanced in-store web experiences. Since many shoppers research online while in a store, retailers are using “in-store modes” that allow them to render a different web-based experience in their store. This improves their web messaging and offers to better suit the in-store shopper.
  • More and more offline purchases will be influenced by online research and messaging. ICSC estimates that by 2020 $1.6 trillion in offline expenditures will be influenced online.

Notable holiday shopping metrics identified at the conference included:

  • Total sales were ~$680B, 85% were by retailers with a physical presence
  • 90% of shoppers made purchases from retailers with a physical presence
  • Shoppers spent an average of $842 on gifts and holiday-related items, an 18% increase over 2016
  • 90% of click-and-collect shoppers made an additional in-store purchase
  • 42% of shoppers dined and 27% watched a movie while visiting shopping centers over the weekend

Behzad Boroumand
Vice President