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The Winners and Losers of Christmas Retailing 2015

(By Dale King) – HOUSTON — – During the 2015 holiday shopping season, a majority of bargain hunters braved crowds, parking woes, traffic jams and potentially foul weather to bring home the glistening gifts and much-wanted toys that delighted their kids and family members on Christmas morning.

At the same time, many stayed home to tap-tap and click their orders into electronic devices like computers, smartphones and iPads. Still, tinseled and glittering store aisles lured the lion’s share of buyers with their traditional holiday magic.

Eric Lestin

Eric Lestin

Even before the store decorations came down and holiday items were relegated to the 50 percent-off shelves, experts were tallying the take. “General information is that online shopping accounted for 10 percent of holiday sales in 2015,” said Eric Lestin, senior vice president at CBRE, a Houston-based commercial real estate brokerage firm. “This was an increase over 2014, but there is clearly a significant portion of shopping left for brick-and-mortar stores.”

Cyber-shopping did score big, said CBRE Research. Online traffic increased by 20 percent during 2015, and when the holidays rolled around, the impact was visible on the Internet, in stores and, particularly, among delivery services. UPS, FedEx and other carriers added trucks to meet nationwide demand. Vans trucked some 1.5 billion packages – an average of five for every man, woman and child in the U.S. – during the holidays.

Black Friday, the day after Thanksgiving, still packed malls, strip plazas and free-standing retailers. But three days later, on Cyber Monday, Internet shoppers hit their keyboards with vigor. CBRE said online buyers purchased $3.07 billion worth of goods that day, a 16 percent jump over the previous year’s cyber buying marathon.

Robert Kramp

Robert Kramp

Another ubiquitous device – the smartphone — is giving shoppers hand-held clout. Using so-called “m-commerce” – for mobile commerce – buyers can make purchases on their phones. “Future expectations pin m-commerce at 45 percent of total e-commerce by 2020, which will equate to $284 billion in sales,” said Robert Kramp, CBRE director of research and analysis.

While cyber-shopping grew, not all was jolly on in-store tally sheets during December 2015. RetailNext said store purchases through the weekend before Christmas declined by 6.7 percent compared to last year, with a corresponding 10.4 percent drop in traffic.

“Online will likely continue to increase,” said Lestin, “and can offer many of the perks that brick-and-mortar stores cannot, such as free shipping, free gift wrapping and free returns.”

But it’s not all gloom and doom. “Many brick-and-mortar stores are already adapting these strategies to get more people physically through the door,” Kramp noted. “Many stores have stepped up sales growth strategies by enhancing the customer experience and offering attractive in-store discounts.”

“A number of major retailers and restaurants now allow shoppers to browse and place their orders online with a quick in-store pick-up option,” he added.

Looking to the future, Kramp said: “No real forecast exists about online sales surpassing traditional brick-and-mortar stores.” Demand for retail properties in Houston and its environs bears out this prediction.

“Prices for retail properties and land suitable for shopping center development rose significantly in Houston over the last 12 months as retailers sought to cash in on the city’s high-growth cycle,” said Deal Sikes & Associates, a leading Texas-based valuation firm.

Even though Houston has been one of the nation’s population growth leaders, the pace of shopping center construction “has been very modest in recent years,” the firm said. Because home construction has been growing steadily, “many areas [have] a shortage of retail, restaurants and services.”

“The Houston retail sector continues to be strong as both inner loop and suburban sites are being acquired for retail developments to meet the demand created by new residential developments,” said CBRE’s Kramp.
‘“Since this demand is focused on retail developments that will ultimately cater to the underserved residential communities for needs such as food and business/consumer services,” he added, “it is unlikely the growth in online commerce will hinder this activity.”

Realty News Report contributor Dale King is a veteran reporter and newspaper editor.

Jan. 13, 2016

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