Anjee Solanki, Colliers National Director of Retail Services, joins Yahoo Finance's Alexis Christoforous to discuss what to expect from retail sales this holiday season.
ALEXIS CHRISTOFOROUS: Joining us now is Anjee Solanki. She is national director of retail services at Colliers International. Anjee, good to see you. So we are just days away from Christmas. Are there indications that December is better than November was when it came to spending?
ANJEE SOLANKI: Most definitely. I think we're starting to see consumer confidence rise. You know, there's a bounce back because people are not spending when it comes to work commute or going to fitness, the gyms, the different wellnesses and services, et cetera. And so, that diversion of spend will be definitely spent as it relates to shopping for the holidays.
Right now, we're actually predicting holiday spend to grow about 4% this year, which is roughly about $317 billion in sales. And then, I think that has to do really with the omnichannel experience and the acceleration of how we're using this kind of shopping journey that we're seeing today.
ALEXIS CHRISTOFOROUS: How would that number, the 4% rise, compare to last year?
ANJEE SOLANKI: Well, last year, we actually saw roughly around 6% to 7%. So it's not that far off. And I think you have to take into account that we're looking at people purchasing more so on online and then having the flexibility or the opportunity to either pick up in store or curbside.
ALEXIS CHRISTOFOROUS: What about the storefront experience? You know, as more and more of us get comfortable doing just about everything online, when might that return to pre-pandemic levels, if at all, Anjee?
ANJEE SOLANKI: Well, you know, it is dependent on market. So in certain markets where restrictions were not as tight, we definitely saw consumers out shopping, doing normal day-to-day behaviors. And so, there hasn't been too much change. People really do want to be amongst other people, with their friends, with their families, socializing.
So although it may take some time in certain markets where such as urban markets, where you have a significant lockdown or other reasons for the-- as it relates to the shopping patterns, I do see that in more of the suburban markets and markets where there's less of a restriction, people are definitely looking forward to coming back and touching, feeling, tasting, and being around other people.
ALEXIS CHRISTOFOROUS: But do you think that some of these struggling malls will be able to hold out? Because it may be a while before people feel comfortable congregating in a large space like a mall. Are we going to see more and more of these get turned into distribution centers, something we saw Amazon do in a couple of key cities this year?
ANJEE SOLANKI: Right. You know, I think it really is dependent upon the location of the mall. So for example, you know, malls are really trying to redefine themselves, going from traditional retail to nontraditional uses. So what I mean by that, if you think about, for example, the Mall of America, they've introduced healthcare, healthcare campuses, schools, large format schools. That's not going to change.
I think we're going to continue to see the diversification of mixed use within these malls, bringing in more, you know, multifamily, as well as other, like you said, nontraditional uses. So that's going to allow a lot of these developers to kind of reallocate that risk profile, taking it from pure retail to a portion of retail, along with multifamily, potentially in the near future, hospitality, et cetera.
ALEXIS CHRISTOFOROUS: Yeah, time to definitely spread their wings and have those malls include a whole lot of things they didn't have before. What do you see as some of the trends, the buying trends, as we move closer here to Christmas? What are people buying?
ANJEE SOLANKI: It's really interesting. I think a lot of people are doing two things. They're actually-- because we are stuck at home, and they do want to have a very festive holiday season. And so, what we're seeing right now is a lot of spend in home decorations. I think I was just reading recently that, you know, for example, Christmas trees, they're running out of Christmas trees everywhere. So there's been this high demand because people are going to be home. They want to spend time with their family. They know they can't spend time with friends or family that are not nearby. So hopefully, they're going to be doing a lot of these virtual get-togethers. And so, that's one area.
Another is, we're seeing a lot of customization. So there's been a big spend in customizing gifts for family and friends, whether that's through Etsy or Shopify. But there's definitely a customization that we're seeing come about.
ALEXIS CHRISTOFOROUS: And finally, just some of the big winners that-- the big retail winners that are going to emerge this holiday season. I know we keep talking about Amazon ad nauseum, just because of all the online buying. But in addition to Amazon, who do you see as some of the big winners?
ANJEE SOLANKI: You know, I definitely see some big box retailers playing a significant role. And these are, again, outside of grocers. So Target, Best Buy, Home Depot. Home Depot, of course, because everyone's trying to renovate, remodel, et cetera. But if we look at Target, for example, they've done a phenomenal job when it comes to omnichannel. These are retailers that actually spent a significant amount of money and capital as it relates to their omnichannel integration because this is no longer a single marketplace. It's really more about taking everything in together.
So if you look at what Target has done, in terms of their non-essential sales, they actually saw 11% increase in store sales. And that had to do with, for example, during the pandemic and even as we start to come out of the shelter in place and restrictions, et cetera, people are going in. They're picking up an item that's non-essential, like a bike. Go home, and then they realize, oh my goodness, I need to actually now buy a helmet or shoes or secondary accessories related to that item. So they've seen a nice boost there.
The other tenant that I would also highlight is Best Buy. So Best Buy actually saw a 242% increase in digital transactions, but 60% of those transactions, those items were either collected in the store itself, or they were actually shipped from the store. So we're seeing this great dynamic in terms of physical storefronts and physical store spaces and how they're going to be utilized going forward.
ALEXIS CHRISTOFOROUS: All right, we'll leave it there, Anjee Solanki of Colliers International. Thank you.