To start most years, Commerce + Communities Today rounds up predictions from experts for the year ahead. Nowadays, however, it seems impossible to predict outward a month, let alone a year. So this year, C+CT instead opted to examine what worked to help the marketplaces industry navigate 2021 and thus what practices position companies best for 2022. Here’s Part 3:

MORE OF WHAT WORKED IN 2021:
Tech in Retailers’ Real Estate Decisions
Reimagining Existing Spaces
Sustainability in Development
Selling Fresh Food at Economy of Scale
Reinventing and Reinvesting
Customer Relationship Management
Focusing on the Customer Experience

Portfolio Optimization

After toughing out the initial wave of the pandemic, many retailers needed guidance on the logical next step: cutting occupancy costs and otherwise bolstering the performance of their real estate. “Portfolio optimization was definitely something that worked well in 2021 for the retailers we assisted in Canada,” said John Crombie, executive managing director of Cushman & Wakefield’s Canadian retail services division.

Some of those chains had emerged from protection under the Companies’ Creditors Arrangement Act, Canada’s version of bankruptcy. They were looking for an objective take on which markets to consolidate, where to close or rightsize stores and how to take advantage of major shifts in consumer behavior, Crombie said. “It is hard to change your wheels when you are driving your car. Having made it through some difficult challenges, this was an opportunity for retailers to stop the car, reflect and try a new direction.”

As part of those portfolio reviews, Crombie’s team analyzed how retailers’ consumer demographics, psychographics and foot traffic had changed. “Those are all important considerations when it comes to portfolio optimization,” he said. “You need to know how those patterns have changed so that you can sell into them at the store level.” Due to the work-from-home trend, for example, many Canadian consumers now spend less time shopping and dining in central business districts. “We certainly saw a boom in suburban retail in 2021,” Crombie said. “Generally, performance has been better at neighborhood and community centers than at downtown urban malls.”

Formerly intent on rapidly growing their store counts, many retailers now are hyperfocused on real estate quality, he added. They also continue to shrink their store footprints and seek new ways to juice sales conversion rates. “They want to better understand how to bring people into the store and also train their salespeople to be better at what they do,” Crombie said.