If you are a retailer and want success in this era of
technology, then look beyond the multi channel concept and embrace
the omni-channel model. At least, the success stories from
retailers around the world give us the impression that this red-hot
model is the new trump card in the retail world.
But what exactly is this omni-channel method?
To put it simply, it is the method of selling products
simultaneously through all available shopping channels such as
brick-and-mortar stores, the Internet, mobile phones, television,
radio, direct mail, catalog and so on.
This cross-border mechanism essentially foresees a customer showing
interest in one channel, progressing and shifting to other channels
and finally ending the transaction in another channel. So retailers
need to effectively and efficiently operate both physical stores
and online channels in tandem, and update information on a
real-time basis across all these modes.
Not only is this unified customer experience redefining the
marketing strategies of retailers, it is also removing the
difference between a store and the Internet. Moreover, the once
less attractive real estate - the logistic properties - are back in
the limelight and the strict boundary between retail and logistic
assets is becoming faint.
This is because retailers, in addition to growing their online
presence, are focusing on developing their physical stores and
using store network as an efficient distribution source.
REITs Leveraging on Omni-channel Concept
There's a whirlwind of change noticed in the retail REIT sector
lately. Its new dynamics and transformation are drawing both
customer focus and investor attention. Accepting the challenge that
the e-commerce boom threw in its face, the REITs are now battling
out lesser footfall in the brick and mortar shops by invading
online retail sales. REITs are giving their malls a facelift to
lure customers, transforming them from a boring shopping hub to
swanky entertainment zones and distribution hubs.
As REITs strive to bring their mojo back, we handpick 3 stocks to
add the Midas touch to your portfolio. These companies not only
boast strong fundamentals but also remain abreast with the latest
trends and continuously revamp their malls to pull crowds to their
properties, enhance occupancy, keep their stores open and charge
Simon Property Group Inc.
This week, Simon Property disclosed its brand re-launch and
marketing program. Last month, the company also collaborated with a
NRG Energy, Inc.
) to install Electric Vehicle (EV) charging stations at its
properties. It is embracing technologies to facilitate shopping and
gifting as well as same-day delivery solutions and increasing the
business mix to make their properties both retail and entertainment
This company enjoys a two-billion traffic and retail sales of over
$70 billion annually at its properties, but is aiming to increase
the figure by funding about $1 billion annually for redevelopment
of its assets.
Currently having a Zacks Rank #3 (Hold), the stock came up with
positive earnings surprise of 6.25% in the first quarter on
increased revenues and occupancy rate, hiked its quarterly dividend
payout and raised its 2014 funds from operations (FFO) per share
guidance. It also has a long-term expected growth rate of 7.1%.
Taubman Centers, Inc.
Also, this week, Taubman has announced the offering of a Business
Class Internet access free of charge to its retailers (it is quite
different from the other digital services, including free consumer
Claiming to be the first in the regional shopping center industry
to offer such a service to retailers, Taubman is essentially
offering this service to woo the best retailers to its malls that
pursue the omni-channel customer engagement strategies. This Zacks
Rank #3 stock also has a long-term expected growth rate of 8.0%.
General Growth Properties, Inc.
In April, General Growth Properties collaborated with
) for availing digital coupon facilities across its properties.
Also, last year, the company teamed up with Deliv to offer same-day
With a long-term growth rate of 9.40% and solid estimate revision
trend, this Zacks Rank #2 (Buy) stock can prove to be a good choice
in the years ahead, given the improving retail market fundamentals.
The ultimate aim for retail REITs is to see higher demand for their
space, by fulfilling the customer need of a one-stop shopping,
dining and entertainment experience and finally have their
purchases delivered to their homes on the same day.
We foresee this omni-channel transformation as ruling the retail
REIT space in the years ahead. Companies wishing to make the most
of this concept will have to leverage the growing opportunities of
technology applications in the retail sector.
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GENL GRWTH PPTY (GGP): Free Stock Analysis
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