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News release

LAS VEGAS, NV

Vanishing Borders Trending in Retail Sector

JLL Retail experts list top three trends shaping the global retail landscape


LAS VEGAS, May 19, 2013 – When Tom Friedman, New York Times columnist and best-selling author, said the world is flat, he probably had the retail sector in mind. The sector is becoming increasingly borderless and success is sometimes determined on a global scale, not only local. 

Jones Lang LaSalle Retail identified three global trends shaping the retail sector:

Retail Investments Attractive Around the World
As investors look for safer havens for their dollars, the retail sector is looking increasingly attractive across the globe.  According to JLL’s Global Capital Flows, the global retail investment momentum continued garnering 25 percent of the total market share in the first quarter of 2013.  Retail’s overall contribution to commercial real estate investment volumes is likely to increase to 30 percent by 2020, with actual volumes increasing significantly as the total investment market grows from around $450 billion today to US$700 billion.  With the globalization of retail investment, investors now have diverse ‘investible’ geographies from traditional mature markets, such as the United States, Western Europe, Australia, Japan, HK and Singapore to new attractive markets, such as China, Brazil, Russia and Turkey. 

Retailers Seizing Opportunities Abroad
As retailers look to extend their brand beyond their local origins and on the web, they face new challenges with the complexities of new markets and diverse customer demands.  Markets reaping the rewards of international expansion include China, India, Brazil and Russia as well as more recently, South Africa.  However, international growth produces issues pertaining to local customs, real estate, marketing and operations.  Friedman called this trend “glocalization” – the adaptation of a product or service specifically to each locality or culture in which it is sold.  Leading retailers, such as Tommy Bahama and Ralph Lauren, have embarked on an aggressive and methodical international growth strategy.  Some retailers are nailing it – Uniqlo and Zara – and some are failing miserably.   International growth is not for the faint hearted. 

e-Commerce Changing the  Retail Landscape
In a recent Deloitte study, sales generated by brick-and-mortar stores are expected to decrease in the next five years from 91 percent to 63 percent. This means that clicks are making inroads into bricks. In the United States, retail e-commerce surpassed $50 billion during the first quarter.  PwC recently published a report indicating that Chinese consumers shop online more than anyone else.  With online sales amounting to $211 billion in 2012, China has emerged as one of the world’s most wired retail markets only behind the U.S. 

Around 40% of retail logistics in China is now related to e-tailing.  However, bricks still remain critical and show rooming is quickly becoming a trend for retailers to showcase products in shopping malls and high street.  In some markets, such as London and Australia, there is a growing number of consumers who will buy online, but pick up their purchase in the store. The result – multi channel retailing is important to a successful retail business.

Globally, Jones Lang LaSalle has a retail portfolio of more than 400 million square feet of property under management and leasing, including more than 10,000 retail locations and provides tenant representation services to more than 300 retailers on six continents. Jones Lang LaSalle is the only global real estate services firm with a team of dedicated, full-time experts who deliver comprehensive and globally integrated services with a focus on increasing our clients’ performance. The firm offers leading-edge, industry-unique technology and training to maximize the benefits for its clients. For more information on Jones Lang LaSalle Retail, visit www.jllretail.com. 

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual revenue of $3.9 billion, Jones Lang LaSalle operates in 70 countries from more than 1,000 locations worldwide. On behalf of its clients, the firm provides management and real estate outsourcing services to a property portfolio of 2.6 billion square feet. Its investment management business, LaSalle Investment Management, has $47.7 billion of real estate assets under management. For further information, visit www.jll.com.