As RECon 2013 draws to a close in the Las Vegas heat, CBRE head of consultancy Jonathan De Mello gives us his final recollections on an eventful few days.
"Tuesday at RECON - what a day!! The conference area was extremely busy as Tuesday was essentially the last day before everyone heads back home on the Wednesday. I was even busier than Monday with a host of meetings both planned and impromptu - really frantic but highly productive networking with lots of great new contacts and some interesting new brands that are keen on entering the UK and wider European market.
Now Americans aren't exactly known for being environmentally friendly, with BIG Oil, BIG cars and the ability to super-size pretty much anything, but the key theme I picked up from RECON this year - from a number of different US retailers - was their desire to build retail 'ecosystems.'
This generally but not exclusively applies to retailers that also have wholesale and concession 'doors' in addition to free-standing stores and an omni-channel platform, but essentially relates to a desire to make money from a market overall through 'balancing' the ecosystem of all possible outlets, in addition to building brand equity.
In the digital age this approach is becoming increasingly relevant, as retailers compete to trade in the best locations with high footfall in order to build up the brand which in turn fuels growth for their online business - which generally yields stronger profit margins for them. The ecosystem concept extends this further to incorporate wholesale and concession retail too, which again can in certain markets outperform free-standing stores from a profit margin perspective.
Channel choice is therefore key, but free-standing stores are essential to this in terms of building up brand equity to drive sales through the other channels, as well as providing an outlet for click and collect services, which generate the highest margin of all given the delivery costs associated with pure online retail. Given the continued importance of free-standing stores - which in themselves will not typically generate stellar margins in very high footfall areas given these locations often have very high rents to match, as an industry I have often thought we should move towards trying to measure the positive impact of a free-standing store on brand equity.
One way that this could be done is through applying metrics PR firms typically use - such as 'advertising equivalent' to footfall numbers going past a store. This would better aid retailers - and landlords - to understand and quantify the true benefit of having a store beyond just turnover and profit.
Wasn't planning on writing an essay for this blog but it has sort of turned into one - so moving on - it is impossible to write a blog on Vegas and not talk about the evening networking that goes on outside the convention centre. Tuesday night was particularly fruitful for me from that perspective with the NY Developers pool party at the Bellagio, a great dinner at the Mandarin Oriental with some current and new clients, and finally 1 Oak club at the Mirage, where a number of brokers were to be found engaging in a final bout of networking over drinks to wrap up their ICSC in style. It was a fitting end to a great trip to Vegas, and I for one will definitely be back for more next year!"