The “brain trust” of the chain store research industry gathered again for the annual ICSC Research Conference in Chicago Sept. 30-Oct. 2. Among the 235 attendees, there were many new brains and some notable absences (you know who you are). I have to say that this was a well-run event with excellent sessions and the usual stimulating dialog (hats off to the organizers and the attendees who shelled out big airfares and hotel rates). My only real complaint was the quick removal of coffee at the breaks.
I was able to personally connect with about a third of the attendees and it’s clear from those conversations that the shakeout of the past few years has created winners and losers. Most of the large players are on the sidelines for expansion, but busy dealing with closings, relocations, and remodels. Retailers and restaurants with strong concepts and balance sheets continue to feed on the soft real estate markets, though many report firming prices for better locations.
Lo and behold, some companies are having trouble finding analysts to support their growing levels of activity! One theory is that the layoffs and malaise of the last few years has dried up the labor supply, especially for people with 3-5 years of experience (think about which 3-5 years those would be: 2007-2009).
There seems to be an increased appetite for predictive analytics and technology to support the market planning and site selection process. There were more vendors exhibiting this year and the traffic around their booths was steady throughout the conference. Maybe the tools will reduce the need for entry level analysts and mitigate the labor supply problem. However, this will only work if field real estate reps are diligent in collecting and loading validated location data (competition and site characteristics) so that maps, reports, and models will portray an accurate picture of the deals they are evaluating. It remains to be seen whether the “dealmakers” will actively and reliably play this role.
I also heard stories from people in larger companies about the consolidation of real estate research activities under the finance groups. As much as we appreciate the importance of the viewpoint provided by finance people (highlighted in the session on integrating finance with research), there is a lot more to market planning and site selection than numbers. This will become even more evident as the “omnichannel” customer experience evolves and collaboration between marketing, assortment planning, and store development muddies the water further for analysts. Some of the recent staff reductions have left companies without much “institutional memory” of the existing stores and what makes them tick, which could impair the vision of executive teams as they prioritize their investments in remodels and new development. Navigating with the rearview mirror is only going to get harder as new distribution paradigms emerge, and finance will be the last to know what’s going on.
One more observation: I think that those who have attended this conference for many years need to work harder at welcoming the newer attendees and building relationships with them. I remember the first few conferences I attended in the 1990’s and how difficult it was to meet new people because everyone seemed to be catching up with their old pals and hanging out. A few kind souls went to the trouble to seek me out and introduce me to their friends so that over time I have gotten to know many people. It’s very easy to focus on the people you know and ignore the new folks, so this requires a conscious effort on the part of all the veterans to make it work.
Feel free to post your comments about the conference on this blog and share your insights.
Nice recap and your observations are consistent with what I’ve been seeing in the banking industry, which is where I’m focusing my efforts. We’re targeting banks that are unable to cost justify a full time real estate research & site planning staff. We’re finding that this includes not only the community banks but some of the regional and larger banks, as well. As you described in your review, we are focusing on building products that stress the importance of clean, validated data and using consistent methodologies to guide site planning decisions. Activity is still light by traditional standards, but growing. I’m also hearing that there is growing demand for experienced RE researchers at some of the stronger retailers. Please continue sharing your observations and insights.