This holiday season, Coresight Research is expecting retail sales to increase 4% year over year, slower than last year’s 5.3% growth, but still strong. On Small Business Saturday, day three of the Thanksgiving weekend holiday shopping spree, Coresight Research visited Westfield Garden State Plaza Shopping Center. According to the National Retail Federation’s (NRF) and Prosper Insights & Analytics annual Thanksgiving weekend shopping survey, 67 million people were expected to go shopping on Small Business Saturday. With more than 2 million square feet of leasable retail space, Westfield Garden State Plaza is the largest mall in New Jersey and among the top three in the New York metropolitan area.  Westfield Garden State Plaza is part of Unibail-Rodamco-Westfield; its 2017 sales per square foot were estimated at $950. In the most recent 3Q report, trailing twelve-month sales through September 30, 2018 at the Westfield portfolio of US specialty stores at 22 shopping centers rose 5.5%. Despite a mostly packed parking lot at 3pm, our conversations with sales associates at Lord & Taylor, Nordstrom, Neiman Marcus, American Eagle Outfitters and others revealed that store traffic wasn’t as strong as last year. Upon entering Neiman Marcus we were handed $50-off coupons for purchases of new items of $200 or more and throughout the store there was a designer sale up to 50% off, and for some brands, an additional 20% at checkout.  Traffic throughout the store was sparse. Some posit that luxury (wealthy) shoppers don’t shop Thanksgiving weekend/Black Friday sales.However, Neiman’s soft traffic reflects its lack of resonance with younger shoppers as well as the shopping behavior of luxury shoppers. The store ambience is more pristine museum than engaged discovery. Lord & Taylor had Black Friday deals in effect, with a rainbow assortment of men’s and women’s cashmere sweaters at $49, originally $160. It was highly promotional throughout the two levels with healthy traffic and helpful store associates. Ann Taylor extended Black Friday to Saturday with 50% off the store, no exclusions. New floor sets of metallic laced suiting, colorful cashmeres and plenty of tables of gifting merchandise: fashion jewelry, cold weather accessories, sweaters and loungewear attracted groups of shoppers checking out the merchandise; lots of consideration, not many purchases while we visited Ann Taylor. Lou & Grey, Ann Taylor’s sister concept was a door away, with an assortment of casual comfortable knits in soft color tones. Very little promotional signage, but a look at the website offers 25% off purchases of $150.

Lou & Grey Source: Coresight Research

Most specialty apparel retailers had 30%-50% off, 40% at American Eagle and Hollister, 50% at Abercrombie & Fitch, Express, J Crew and Gap, deeper still at Aeropostale, where Black Friday’s 60%-70% was off the entire store, and buy one get one free at Victoria Secret. We didn’t see too many queues in the stores, with Macy’s a noticeable exception. In home, we watched a line grow from 5 people to 10 people in 15 minutes. The bedding department was disheveled, a look of unmade beds, dust bunnies on the floor and packages half opened rummaged through to determine size and feel. Down comforters were a traffic driver with the recent cold and with Macy’s Hotel Collection heavyweight down at $373 from $1,070, it was worth the wait. Truly a paucity of sales help; it really was self-help shopping.

New Retail Destinations

Garden State Plaza is a laboratory for new digital-first brands. We visited the Wayfair pop-up shop which will be there through January 2, 2019. It was staffed with at least four employees introducing shoppers passing by to the online retailer and educating them as to Wayfair’s offerings, which include onsite complementary design advice. Wayfair is conducting weekly $250 prizes available to shoppers that provide their email, which we did. Within minutes we received an email thanking us for visiting the pop-up shop and providing a 10% off coupon on first purchase. The cost of online customer acquisition grows as a business scales, and can deleverage a business model, thus many rapidly growing digitally native brands (many that said they would never enter physical retail) are using pop-ups and physical retail to connect with and meet new consumers. Garden State Plaza has been used as a testing ground for emerging retail concepts, digitally native brands and global brands entering the US. Westfield includes Amazon Books, Fabletics, Microsoft, Bonobos, Athleta and Warby Parker as new sources of growth and Westfield Garden State Plaza has an Amazon Books, Fabletics, Microsoft and Warby Parker.

Wayfair Pop-up Source: Coresight Research

Some new global brands we visited were German women’s apparel brand Marc Cain, Italian women’s intimate brand Intimissimi and UK based Italian chocolatier The Amazing Chocolate Workshop. (Yes the tools below are made of 64% cocoa, 37% for milk chocolate tools.)

The Amazing Chocolate Workshop Source Coresight Research