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POP-UP Shop Innen” by Lisa Ampelfrau is licensed under CC BY 2.0.

The ever-changing world of technology is transforming the holiday shopping season and real estate trends.  This year, pop-up shops and e-commerce returns have become important elements.

Pop-up shops are becoming an increasingly popular way for landlords to fill vacancies during the holiday season.  A “pop-up shop” is a store set in a location for a very brief period-usually between a few days and several months.  These temporary stores are beneficial for retailers who want to test the waters and experiment (for instance, a strictly online retailer setting up shop).

Head of CBRE’s retail division Melina Cordero describes the appeal: “Given customers are increasingly bored with the copy-paste mall model, [pop-ups] can be a pretty effective traffic driver.”  Some malls have even designated space specifically for a rotating group of pop-ups.  While these short-lived tenants may seem risky to landlords, pop-up shops can potentially become long-term tenants. [1]

Another pertinent topic this year is the business that retail returns generate. Brick-and-mortar store returns total around 8 percent of total retail sales.  But, e-commerce returns dwarf those figures, making up about 15 to 30 percent of total sales. This holiday season’s e-commerce returns are expected to top $32 billion-a $4 billion increase from last year’s figures.

A number of Lehigh Valley warehouses will process these seasonal returns in a method coined “reverse logistics.”   Retail companies hire third-party warehouses and logistic centers to handle the influx of holiday returns.  This allows the retailer to continue “business as usual.”  David Egan, CBRE Global Head of Industrial and Logistics Research describes the method: “This intricate process requires many components, including a precise network of warehouses for handling returns, robust inventory management systems and extensive customer analysis on the front end to limit the probability of returns.”  As the outlook for this year’s holiday sales looks promising (consumer confidence is the highest it has been since 2000), the Valley’s warehouses can look forward to a busy January.[2]

 

 

                [1] Lauren Thomas, “Pop-up Shops Still Popular with Retailers for the Holidays,”  CSNBC, November 2017, accessed December 21, 2017, https://www.cnbc.com/2017/11/10/pop-up-shops-still-popular-with-retailers-for-the-holidays.html; Diana Bell, “Pop-Up Stores Seize the Opportunity in New York City,” CoStar, December 2017, accessed December 19, 2017, http://www.costar.com/News/Article/Pop-Up-Stores-Seize-the-Opportunity-in-New-York-City/196336.
                [2] Brian Pedersen, “There’s Big Money in E-Commerce Returns – as in possibly $32B,” Lehigh Valley Business, December 2017, accessed December 20, 2017, http://www.lvb.com/article/20171218/LVB01/171219892/theres-big-money-in-ecommerce-returns–as-in-possibly-32b; “Reverse Logistics Key to Retailers’ Holiday Success as Online Sales Surge,” Connect Commercial Real Estate, December 2017, accessed December 20, 2017, https://www.connect.media/reverse-logistics-key-retailers-holiday-success-online-sales-surge/; James Doubek,” Retailers Hope for Strong Holiday Season as November Sales Beat Expectations,” NPR, December 2017, accessed December 18, 2017, https://www.npr.org/sections/thetwo-way/2017/12/15/571030299/retailers-hope-for-strong-holiday-season-as-november-sales-beat-expectations.