ICSC Monterey Conference Take-Aways

On March 7^th and 8^th 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
boroumand@slatt.com