Every month, JLL’s regional team curates the top commercial real estate industry articles to keep you in-the-know. In this month’s edition, JLL spotlights the implications of the U.S. labor shortage, how taxes are impacting where tech companies set up shop and how customer experience influences revenue growth at brick-and-mortar retailers.
Labor Shortage Impacts Commercial Real Estate
There is a mass labor shortage in the U.S. and it impacts commercial real estate. A recent report from JLL announced that roughly 6.3 million positions remained open but unfilled as of January 2018. This is a record high number and significant problem.
So, what does this mean for CRE? Labor shortages result in higher vacancy rates, lower asking rents and greater concessions across markets.
However, there are some potential remedies:
- Improve education. Better education in technical and vocational training could produce a wider labor pool. More re-education and retraining could also help workers displaced by trade, offshoring and technical improvements.
- Encourage more women. Any measure that makes it easier for women, especially mothers, to remain or reenter the labor force would be a huge boom to the economy and labor market.
- Facilitate movement of labor. Subsidies for housing, relocation and interview costs as well as improved infrastructure that better connects outlying areas could remedy the labor shortage.
Taxes Impact Where Tech Companies Setup Shop
Seattle recently levied then repealed an annual tax of about $50 million on big companies to help solve the city’s homeless problem, and this could be an issue that arises in other areas too, according to an article from Bloomberg.
The cities levying these taxes believe large corporations play a big part in inequality and overcrowding and should be responsible for helping. Many large tech companies are responding by taking their expansions to other locations and are scouting untapped markets, and it’s working. After tech giants in the Seattle area applied pressure and started looking towards other cities, Seattle repealed the tax law.
As other tech hubs consider this policy, big tech players may be motivated to check out other markets such as Columbus and Pittsburgh. These cities are listed as future tech hubs, especially since they are hot spots for talent in the midst of a labor shortage, hosting Ohio State University and Carnegie Mellon respectively. Other cities are offering valuable incentives to capture the wandering eyes of these tech giants.
Experience Encourages Bricks-and-Mortar Store Visits
According to JLL, a good retail experience is very important to shoppers. Brands that scored higher in categories related to experience outperformed their rivals in revenue growth, with the exception of mass merchandisers and off-price retailers.
If you aim to be a leader in customer experience, here are six ways you can best cater to shopper needs:
- Intuitive layout. Make it easy for consumers to find products.
- Human touch. Train employees to deliver high-quality interactions and treat customers equally regardless of who they are and how much they spend.
- Meaningful brand connections. Align your brand with customers beliefs and ideals.
- Immersive experience. Create a distinct look and feel, including appealing scents and sounds.
- Accessible shopping. Provide a fast checkout, easy to find products and mobile payment options in stores.
- Personalized response. Deliver loyalty rewards and more customized products.