Debunking E-Commerce Myths
We’ve recently heard of fake news stories, hoaxes, and fabricated plots that have permeated headlines lately—and, unfortunately, the negative consequences that some have caused.
One such fictitious headline that’s running rampant is “the death of the shopping mall” and countless more tales of online sales putting brick-and-mortar stores out of business. But the reality is that the in-store vs. online struggle is not quite the battle that you probably think it is. In fact, physical stores continue to dominate retail sales.
So with the proliferation of fake news stories, here are a few facts to debunk these e-commerce myths and demonstrate the strength of the shopping center industry.
In-store retail sales accounts for $4.2 trillion or 90.7% of the market. A common perception is that online giants, such as Amazon, dwarf brick-and-mortar competition, but the reality is that Amazon is still a small percentage of the overall market. Online-only retailers represent merely about 3.5% of all U.S. retail sales.
Research also shows that 78% of consumers prefer to shop in-store, and spend significantly more per month in a physical store than online. We’re also seeing that omni-channel retailing is actually an enhancement to brick-and-mortar stores. E-commerce and other technological advances are improving the brick-and-mortar shopping experience and boosting sales at physical stores. 93.4% of all retail sales owe all or part of sales to a brick-and-mortar presence.
These are all encouraging statistics that confirm the shopping center industry is thriving, and the rise of technology and e-commerce is not going to change that. But we do need to change our thought process. Industry professionals and supporters need to advocate for our shopping centers and educate the consumer. According to one of my industry colleagues, “The consumer needs to be told that bricks and mortar is here to stay because if you keep telling the consumer it’s dead, the consumer will think it’s dead and start shopping online.”
Our friends at ICSC (International Council of Shopping Centers) have recently drafted several editorial pieces that have appeared in national news publications such as The Wall Street Journal. We are grateful for the leadership of Tom McGee and his team to help this business create our own sources of credible information, and to educate consumers on how vital the shopping center industry is, to both them and our entire country. Read the full articles “A Talk With Tom McGee” and “E-Commerce and Physical Stores Are Friends with a Common Purpose.”
-Marty
British Airways to connect London & New Orleans with nonstop flights
This morning, British Airways announced it was initiating a direct flight between New Orleans and London. This is truly a “game changer” for our region and a confirmation about the outlook for the Gulf South economy.
The effort to bring British Airways back was years long and required presenting a strong regional business support throughout Louisiana and over to Mobile.
Michael Hecht, CEO of GNO Inc. stated:
“Mobile (Ala.) was a major support for us because we talked about starting up a bus service for executives from Mobile into New Orleans, so they can fly direct into Europe instead of going into Chicago.”
President’s Message: Do Something.
Lately, there are days when it is extremely challenging for me not to get discouraged and disgusted by the barrage of tragic news continuously pouring in from around the world, our country, and most recently, our great state of Louisiana. Increasing violence, deafening angry voices, and escalating hatred are sadly becoming the new normal and all too frequent.
But then, there are days when I am reminded about the virtuous things. Days when my faith in humanity is restored and I remember what is truly important.
One of those days came last Friday at our annual Stirling Olympics, a company-wide fundraiser for local nonprofit organizations. Our incredible Stirling Team joined together to enjoy some friendly competition and good-natured rivalry. We competed in ridiculous games, crazy lip-syncing contests and clumsy relay races. But the most amazing moment was witnessing the genuine pride in our team when the funds were presented to the recipients.
This year, we set a lofty goal of raising $45,000 through Stirling Olympics and I am pleased to say that we surpassed that goal, reaching $57,000! Funds raised from the event benefited The ALD Foundation, which strives to raise awareness and supports the research of Adrenoleukodystroply, a genetically determined neurological disorder that affects young boys between the ages of four and ten, as well as the Miracle League of Greater New Orleans, which works with mentally and physically handicapped children so they can participate in everyday sports. What a perfect day!
For those of you that know me, I have an extensive collection of quotations from famous authors, celebrities and business leaders that inspire and motivate me in one way or another.
There is one on my office wall right now by basketball coaching legend, John Wooden, that is particularly meaningful to me and relevant today:
“You can’t live a perfect day without doing something for someone who will never be able to repay you.”
Yes, we can have good days when we celebrate our business successes and growth, or even personal accomplishments and material possessions. But in order to achieve living a perfect day, it must include a selfless act for the benefit of someone else.
What if we all devoted a little more time doing something to help someone else, rather than creating divisiveness, turmoil and tearing each other down? Could we accomplish more perfect days?
I am very proud of our Stirling Team for their hard work and generosity last week. They were equally proud to have made a difference in someone else’s life—especially those children from the Miracle League and the families from The ALD Foundation that joined us.
I know that we can’t change the world or solve all of life’s problems, but we can do our part, no matter how large or small. A kind gesture as simple as a smile can bring hope in those days of discouragement and disgust.
So my message today is to please go out and do something. Go out and do something—anything—kind for someone who will never be able to repay you. And let’s just see what happens.
#StirlingProud!
President’s View
Sadly, we woke up yesterday to the news of yet another tragic and heartbreaking event—something that is all too common these days.
This morning, I received Stephen Waguespack’s (President of LABI), View: The Quest for Common Ground. In it, I feel he encapsulated very clearly so many insightful thoughts. Seeking common ground these days is more important than ever, but unfortunately it seems so difficult and rare.
We are too quick to judge and too unwilling to listen.
In his article, Stephen quotes Winston Churchill:
“Courage is what it takes to stand up and speak;
Courage is also what it takes to sit down and listen.”
Perhaps, we all should try to understand when to speak and when to listen.
“I do not like that man. I need to get to know him better.”
Abraham Lincoln is credited with this quote that simply reinforces something we were all taught as a kid but too often forget as an adult – the value in looking beyond our differences and instead striving to find common ground where possible. His advice is especially relevant today considering the national effort to recover and learn from recent events related to crime prevention and justice in American cities, including our own capital, Baton Rouge.
Understanding the perspective of others is easier said than done. Everywhere we turn, we are constantly reminded about the differences between us rather than the opportunities for cooperation and alignment.
Click here to read Stephen Waguespack’s President’s View: The Quest for Common Ground.
GNO, Inc. awarded the Mac Conway Award for Excellence in Economic Development by Site Selection Magazine
Site Selection Magazine awarded Greater New Orleans, Inc. (GNO, Inc.) the Mac Conway Award for Excellence in Economic Development. The Mac Conway Award for Excellence in Economic Development recognizes the top economic development agencies of the previous year in both metropolitan and micropolitan areas. The criteria used to select the recipients includes the total number of jobs created and the total amount invested as well as per capita investment and jobs created in the region. Site Selection also looks at unique ways economic development organizations are addressing critical issues in their communities.
A few of GNO, Inc. and the Greater New Orleans area successes:
- $4 billion in capital investments in 2015
- 1,988 new jobs created in 2015
- Knowledge industry jobs grew 37% in 2015
Congratulations to GNO Inc. for this prestigious and well- deserved honor! This award is yet another testament to the level of economic development, job creation and investment occurring in our 10-parish region.
GNO, Inc. was recognized along with 10 other groups in the nation. To see all the EDOs recognized, please read Site Selection’s article.
President’s Message: Disrupt or be disrupted.
Recently, I attended a seminar at New Orleans Entrepreneur Week titled CEO Disrupt Breakfast featuring Steve Case, founder of AOL and one of America’s best-known and most accomplished entrepreneurs, and (New Orleans native) Walter Isaacson, president & CEO of the Aspen Institute and national writer and journalist.
The rudimentary theme was that companies must disrupt themselves from time to time, or they will be disrupted by external forces, and eventually decline or fail. I considered how this applies to Stirling Properties and the commercial real estate industry as a whole.
Business disruption is a reality that companies face on a regular basis. The largest cause of disruption is the rapid progression of technology and globalization, which allows new business models to be introduced at an ever-increasing rate. Companies must disrupt or be disrupted—we must shake up the status quo—and deviate from the normal way of doing things.
But business disruption is nothing new. We see multitudes of instances throughout history. For example, plastic disrupted the production of metal and wood, typewriters were disrupted by word processing software, electric cars disrupted the automobile industry, Wikipedia displaced traditional encyclopedias, iTunes disrupted the music industry, Uber disrupted the transportation industry, Airbnb is disrupting hoteliers, and the list goes on and on. Companies like Apple, Google, Amazon, and Starbucks are constantly finding new ways of disrupting themselves to stay relevant and remain a crucial part of our daily lives.
So how do we survive in a world of disruption, continually improve our position, and seize opportunities? We must be proactive and adaptive. Disruption is necessary to create opportunity. Many leaders agree, “If you are not growing, you are dying.” Change is inevitable, and businesses must be willing to adapt in order to prosper.
According to Disrupt author, Luke Williams, “In a business world of nonstop change, there’s only one way to win the game: transform it entirely. This requires a revolution in thinking—a steady stream of disruptive strategies and unexpected solutions.”
There are many factors that threaten to disrupt us locally. The economy and state budget shortfalls, the oil & gas industry, and even politics, all have the ability to considerably change our environment.
Additionally, the commercial real estate industry is evolving at lightning speed. E-commerce and Internet shopping have already significantly disrupted the retail industry! Many companies are quickly adapting to new trends, such as embracing technology, incorporating omnichannel marketing strategies, integrating mixed-use developments, and engaging millennials. In order to get ahead, we have to move away from traditional real estate models. We have to transform the market landscape.
I am proud to say that Stirling Properties has done this throughout its history, most notably over the last five years. Our leadership recognized that in order to thrive in this market, we had to identify new and unique opportunities to grow and diversify.
We expanded our business model and strategically focused our attention toward property acquisition and creating opportunities for investors to put capital into real, tangible property across the Gulf South. Earlier this year, we purchased Turtle Creek Crossing shopping center in Hattiesburg, Mississippi, marking the largest retail acquisition in our 40-year history! Since 2010, we have acquired over $200 million in property, totaling 2.1 million square feet—including the Pan American Life Center, which has become the hub of our New Orleans commerce.
We are continuing to invest in multi-family housing. We’re increasing our company reach and footprint by expanding into new geographical areas throughout the Gulf South, as well as new industries, such as healthcare. These are all examples of projects and strategies that differ from our normal. Consider the results of this since 2010:
- Total gross revenue has increased by 140%
- Management fees are up 67%
- Square footage under management has grown by 50%
- Development fees have increased by 145%
- Watch our complete Stirling Properties highlight video
We can be certain there’s going to be more change in the next five, ten and twenty years. But the potential for improvement is all around us, and it’s a truly exciting time for Stirling Properties, our community, and our industry.
Stirling Properties will continue to explore new ways to disrupt ourselves, and we look forward to reaping the opportunities that are produced!
