![\"Horton](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/HortonPlazaPark_CJ-C3-e1495452874409.jpg\")
Horton Plaza Park is a public space project adjacent to Horton Plaza Shopping Center in San Diego that restored the historic park location and fountain to its mid-1900s glory. The space now serves as a gathering area for the community and an attraction that lures shoppers.The Plaza Park features an event venue, food and beverage stands, theater and attractions ticket sales booths, and complimentary WiFi. Image courtesy of Carrier Johnson + Culture<\/p><\/div>\n
Amazon founder Jeff Bezos has said that he named his company after the great river, the largest in the world, hoping to emulate its power. Now ranked by Forbes as the world\u2019s eighth-largest retailer, Amazon.com is living up to its name.<\/p>\n
While the popularity of online shopping might be seen as a bad omen for the future of brick-and-mortar retail, the Forbes list of the world\u2019s largest retailers also includes typically in-store-focused companies like CVS, Walgreens, Home Depot, Target and Costco. According to Marcus & Millichap\u2019s 2017 U.S. Retail Investment Forecast, retail properties are set to achieve the lowest national vacancy rate in 16 years. In fact, the forecast reports this year\u2019s scheduled store openings will create 81 million square feet of net absorption, taking the vacancy rate to 5.1 percent.<\/p>\n
Whether the decision to shop in-store rather than online might simply be a matter of necessity or swayed by the experiential draw of food samples or hands-on demos a la Costco or Apple, it\u2019s clear that even in today\u2019s increasingly technology-driven society, the right brick-and-mortar retail will remain competitive. And that applies across a variety of subsectors.<\/p>\n
The local open-air shopping center<\/h2>\n![\"Horton](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/HortonPlazaPark_CJ-C2.jpg\")
Horton Plaza Park, Image courtesy of Carrier Johnson + Culture<\/p><\/div>\n
The small, local shopping center has not traditionally been touted as a must-see retail destination, but today\u2019s owners and operators have found clever ways to transform what once was a collection of stores in the same place to a lifestyle-enhancing convenience. By anchoring centers with a grocery store, a gym or a pharmacy, owners can cater to time-crunched customers with necessity-based options.<\/p>\n
\u201cThe successful open-air shopping centers moving forward are going to combine necessity-based retailing with entertainment retailing and with services retailing,\u201d said Bill Rose, first vice president & national director of Marcus & Millichap\u2019s National Retail Group.<\/p>\n
As the modern consumer evolves, so must retail tenants if they want to keep up. While yesterday\u2019s suburban open-air shopping centers were a destination in and of themselves, they must now be a convenient stop on the way to work or home in order to gain foot traffic in the face of growing walkability and urbanization trends.<\/p>\n
\u201cTraditional shopping centers were often suburban and expected the consumers to step out of their everyday routine and come to them,\u201d said Brent Ziegler, principal, president & director of design at Dyer Brown Architects in Boston. \u201cThe continuing trend toward urbanization is encouraging developers and center owners to factor population density into considerations for location, so that consumers are more likely to make their visits a weekly, or even daily, part of their routine.\u201d<\/p>\n
![\"Jeff](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/Jeff-Green-headshot.jpg\")
Jeff Green<\/p><\/div>\n
Instead of segregating grocery centers in one category, health facilities in another and the local barber elsewhere, tomorrow\u2019s neighborhood shopping centers will bring in a variety of tenants for a one-stop-shop environment. \u201cRetailers are realizing that instead of competition, joining together in the right environment increases everyone\u2019s opportunity to drive sales,\u201d said Brian Koshley, global director of interiors and culture for Carrier Johnson + CULTURE, an architectural, interior design and branding firm based out of San Diego.<\/p>\n
While the current retail climate isn\u2019t very well suited to new construction, Jeff Green, real estate consultant at his eponymous Jeff Green Partners, predicts that redevelopment of existing shopping centers will be the most cost-effective way to capitalize on retail assets and draw in consumers. Ultimately, he told CPE, the shopping centers that \u201ccommunicate their value to the customer (will) succeed.\u201d<\/p>\n
Reviving regional malls<\/h2>\n![\"The](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/The-Shoppes-at-Carlsbad-Aerial-.jpg\")
The Shoppes at Carlsbad is undergoing extensive renovations to better fit within its hip beachside community.<\/p><\/div>\n
Malls enjoyed their heyday in the late 1980s through the \u201990s, impacting not only suburban families\u2019 spending habits but teenage and young-adult culture. The concept of big-budget movies, popular fast food and the latest clothing trends in one location was uncommon before the late 20th century.<\/p>\n
While the mall popularity boom was much about having a place to go with friends and load up on fast food for its mostly teen customers, shopping itself was also a special activity. Today, though, people shop easily, whenever and wherever they want, on mobile devices, and going into a physical store can feel like an errand or a chore.\u00a0 As Rose put it, \u201cI can easily buy a pair of shoes on the Internet from Zappos. But what\u2019s really fun is going out, having a fun dinner, maybe a movie and then shopping for some (shoes) because we\u2019re out there.\u201d<\/p>\n
Anchoring the shopping center or outlet with an activity gives consumers more of an incentive to visit the mall with friends\u2014and the activities have ramped up. Sean Selby, architect at Arrowstreet in Boston, is working on mall development projects that feature activities like rock-climbing, mini-golf and even indoor sky-diving. Koshley sees this aspect of the evolution of retail development as more of a cohesive rebranding strategy for the category as a whole. \u201cRetail centers are becoming hospitality and entertainment destinations rather than simply an amalgamation of disjointed brands,\u201d he explained. \u201cA customer may journey to a retail center simply for the experience rather than for a specific purchase.<\/p>\n
As a result, the \u2018impulse buy\u2019 becomes a stronger component. You make a purchase while on a stroll through a pleasing environment, rather than darting in and darting out of the mall as quick as you can.\u201d<\/p>\n
Another approach is incorporating necessity. As grocery-anchored local centers have gained popularity across the country, the strategy of using popular grocery destinations like Whole Foods, Trader Joe\u2019s and Costco as a draw has expanded to malls, as well. \u201cThere\u2019s already a lot of traffic coming to the mall; why wouldn\u2019t the supermarket owner want to be there? For the mall owner, it brings more people in because the average supermarket shopper comes (an estimated) 2.2 times a week, while the mall shopper comes (some) 1.1 times per week,\u201d said Green.<\/p>\n
The popularity of both specialty foods and bulk discount stores draws in a family-centered and health-conscious consumer base that may not necessarily be the target of a traditional mall. \u201cThe standard, typically fashion-focused shopping center approach with a chain-based food court does not always address the interests of the entire family,\u201d Ziegler said.<\/p>\n
The lifestyle center experience<\/h2>\n![\"Rouse](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/NewPark0213.jpg\")
Rouse Properties\u2019 Newpark shopping center features a dining pavilion that fuses the indoors and out.<\/p><\/div>\n
Just as the mall revolutionized retail in the \u201980s and \u201990s, the lifestyle center is paving the way for a new kind of retail experience. While today\u2019s luxury lifestyle centers like the mall offer entertainment, shopping and dining, these concepts are presented in a 21st century way. What can\u2019t be shopped for or experienced online is what is making the lifestyle centers of today as popular as the super malls of yesterday. According to Rose, the new lifestyle center concept is an indoor\/outdoor property with mixed-use components like offices, gyms, hotels and even apartments.<\/p>\n
The concept of a lifestyle live-work-play destination has promise. \u201cThe only area that has shown meaningful growth in the 2 to 3 percent range is a lifestyle project or an outlet project,\u201d he said. While outlets have been around for years, they are still popular in metropolitan tourism markets, where shoppers can score luxury goods for less while strolling outside.\u00a0<\/p>\n
Indoor-outdoor living, which has seen a popularity boost in the residential market, is desirable in commercial spaces, as well. \u201cThere needs to be a compelling reason to draw customers to a center beyond the desire to make a purchase,\u201d said Koshley. \u201cWe are seeing centers raze anchor stores and replace them with outdoor hospitality-oriented lounges and dining experiences.\u201d The concept of outdoor dining combines the draw of a relaxing outdoor setting with the increasing consumer focus on healthy, unique or local food that makes dining out more of an experience than grabbing something from a food court featuring the same chain restaurants as every mall across the country.<\/p>\n
\u201cThe future of retail demands that a developer provide that third place in life\u2014we work and we live, but we have to have an entertainment or dine-type place,\u201d explained Rose.<\/p>\n
While it may take a while for the average consumer to embrace sky diving or rock climbing at their local shopping center, movie theaters are an almost universal mall staple that are being redeveloped, as well. According to Rose, the new iteration of the movie theater experience includes high-end food and drinks as well as table service, almost like the pre-film era of dinner-and-a-show.<\/p>\n
\u201cThe consumer is happy to pay a premium price to have premium seating, to have services delivered while at the theater, and of course, the most important aspect is being able to reserve your seat online in advance,\u201d he said. \u201cIf you combine that with a mall that is offering other dining choices and other interesting shopping experiences, that\u2019s really the formula for success moving forward.\u201d<\/p>\n
Future proofing<\/h2>\n![\"The](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2017\/05\/UCSD_VillageTorreyPines_TheStrand_market-bistro1.jpg\")
The Strand, a combination marketplace and bistro, caters to students at the University of California San Diego.<\/p><\/div>\n
While property experts have identified strategies to draw consumers into retail centers, the retailers likewise must themselves find means to compete against the growing popularity of online shopping. \u201cWith so much actual purchasing moving to online, many types of retailers must begin to think of their stores as showrooms at the most and billboards at the least, and structure their deals in those terms,\u201d Ziegler advised. \u201cGetting into the best location with the right demographic is going to give consumers a chance to touch and feel the product but it is also going to boost your brand.\u201d<\/p>\n
Green offered Best Buy as an example of a retailer that is successfully adapting its in-store presence to not only create a showroom for its products but give customers a hands-on experience with the products. The retailer is now subleasing booths in its stores to the brands it carries, allowing those interested in, for example, a Google phone, to ask a brand representative questions and try out the device before purchasing.<\/p>\n
However, not every type of retailer is suited to the showroom tactic, and some may still be able to continue with their in-store sales model. Selby recently asked both a children\u2019s retailer and a menswear store owner if they were afraid of the concept of someone trying out a product in their local store and then buying an equivalent online. The menswear seller said that people still want to feel fabrics and try things on, as well as take advantage of in-house tailoring, where they can consult an expert about fit. \u201cIt\u2019s a level of service that you can\u2019t get online,\u201d said Selby. As for the children\u2019s retailer, the response was that most people who are either new parents or buying for someone else like to consult store staff on sizing, age-appropriateness and comparisons between different products.<\/p>\n
Koshley sees the local or specialty store experience as irreplaceable for some shoppers. \u201cThe person intent on experiencing the feel of a piece of fabric or the heft of a carving knife seeks a sensory experience that can only be realized in destination retail. Retail properties can never be as convenient as ordering online while lying in bed in your pajamas with a cup of coffee by your side. But for the consumer wanting to enjoy an experience that creates a lasting memory, there is still no online substitute for destination retail.\u201d<\/p>\n
While it\u2019s evident that brick-and-mortar is here to stay, it\u2019s also imperative that it evolve with the changing habits of consumers and the technology that accompanies this. Retail property owners should stay vigilant and monitor performance of fundamentals, since the retail climate can be fickle and depends on a variety of influencing factors, Rose advised.<\/p>\n
\u201cGiven the strength of the economy and the strength of our retailers, it is expected that (the high value of retail) should (continue) for a while,\u201d he said. \u201cWe need to be mindful: We need to watch job growth, we need to watch inflation and interest rates, because those will have some heavy impact on values of real estate.\u201d<\/p>\n
Horton Plaza Park, Image courtesy of Carrier Johnson + Culture<\/p><\/div>\n
The small, local shopping center has not traditionally been touted as a must-see retail destination, but today\u2019s owners and operators have found clever ways to transform what once was a collection of stores in the same place to a lifestyle-enhancing convenience. By anchoring centers with a grocery store, a gym or a pharmacy, owners can cater to time-crunched customers with necessity-based options.<\/p>\n
\u201cThe successful open-air shopping centers moving forward are going to combine necessity-based retailing with entertainment retailing and with services retailing,\u201d said Bill Rose, first vice president & national director of Marcus & Millichap\u2019s National Retail Group.<\/p>\n
As the modern consumer evolves, so must retail tenants if they want to keep up. While yesterday\u2019s suburban open-air shopping centers were a destination in and of themselves, they must now be a convenient stop on the way to work or home in order to gain foot traffic in the face of growing walkability and urbanization trends.<\/p>\n
\u201cTraditional shopping centers were often suburban and expected the consumers to step out of their everyday routine and come to them,\u201d said Brent Ziegler, principal, president & director of design at Dyer Brown Architects in Boston. \u201cThe continuing trend toward urbanization is encouraging developers and center owners to factor population density into considerations for location, so that consumers are more likely to make their visits a weekly, or even daily, part of their routine.\u201d<\/p>\n
Jeff Green<\/p><\/div>\n
Instead of segregating grocery centers in one category, health facilities in another and the local barber elsewhere, tomorrow\u2019s neighborhood shopping centers will bring in a variety of tenants for a one-stop-shop environment. \u201cRetailers are realizing that instead of competition, joining together in the right environment increases everyone\u2019s opportunity to drive sales,\u201d said Brian Koshley, global director of interiors and culture for Carrier Johnson + CULTURE, an architectural, interior design and branding firm based out of San Diego.<\/p>\n
While the current retail climate isn\u2019t very well suited to new construction, Jeff Green, real estate consultant at his eponymous Jeff Green Partners, predicts that redevelopment of existing shopping centers will be the most cost-effective way to capitalize on retail assets and draw in consumers. Ultimately, he told CPE, the shopping centers that \u201ccommunicate their value to the customer (will) succeed.\u201d<\/p>\n
Reviving regional malls<\/h2>\nThe Shoppes at Carlsbad is undergoing extensive renovations to better fit within its hip beachside community.<\/p><\/div>\n
Malls enjoyed their heyday in the late 1980s through the \u201990s, impacting not only suburban families\u2019 spending habits but teenage and young-adult culture. The concept of big-budget movies, popular fast food and the latest clothing trends in one location was uncommon before the late 20th century.<\/p>\n
While the mall popularity boom was much about having a place to go with friends and load up on fast food for its mostly teen customers, shopping itself was also a special activity. Today, though, people shop easily, whenever and wherever they want, on mobile devices, and going into a physical store can feel like an errand or a chore.\u00a0 As Rose put it, \u201cI can easily buy a pair of shoes on the Internet from Zappos. But what\u2019s really fun is going out, having a fun dinner, maybe a movie and then shopping for some (shoes) because we\u2019re out there.\u201d<\/p>\n
Anchoring the shopping center or outlet with an activity gives consumers more of an incentive to visit the mall with friends\u2014and the activities have ramped up. Sean Selby, architect at Arrowstreet in Boston, is working on mall development projects that feature activities like rock-climbing, mini-golf and even indoor sky-diving. Koshley sees this aspect of the evolution of retail development as more of a cohesive rebranding strategy for the category as a whole. \u201cRetail centers are becoming hospitality and entertainment destinations rather than simply an amalgamation of disjointed brands,\u201d he explained. \u201cA customer may journey to a retail center simply for the experience rather than for a specific purchase.<\/p>\n
As a result, the \u2018impulse buy\u2019 becomes a stronger component. You make a purchase while on a stroll through a pleasing environment, rather than darting in and darting out of the mall as quick as you can.\u201d<\/p>\n
Another approach is incorporating necessity. As grocery-anchored local centers have gained popularity across the country, the strategy of using popular grocery destinations like Whole Foods, Trader Joe\u2019s and Costco as a draw has expanded to malls, as well. \u201cThere\u2019s already a lot of traffic coming to the mall; why wouldn\u2019t the supermarket owner want to be there? For the mall owner, it brings more people in because the average supermarket shopper comes (an estimated) 2.2 times a week, while the mall shopper comes (some) 1.1 times per week,\u201d said Green.<\/p>\n
The popularity of both specialty foods and bulk discount stores draws in a family-centered and health-conscious consumer base that may not necessarily be the target of a traditional mall. \u201cThe standard, typically fashion-focused shopping center approach with a chain-based food court does not always address the interests of the entire family,\u201d Ziegler said.<\/p>\n
The lifestyle center experience<\/h2>\nRouse Properties\u2019 Newpark shopping center features a dining pavilion that fuses the indoors and out.<\/p><\/div>\n
Just as the mall revolutionized retail in the \u201980s and \u201990s, the lifestyle center is paving the way for a new kind of retail experience. While today\u2019s luxury lifestyle centers like the mall offer entertainment, shopping and dining, these concepts are presented in a 21st century way. What can\u2019t be shopped for or experienced online is what is making the lifestyle centers of today as popular as the super malls of yesterday. According to Rose, the new lifestyle center concept is an indoor\/outdoor property with mixed-use components like offices, gyms, hotels and even apartments.<\/p>\n
The concept of a lifestyle live-work-play destination has promise. \u201cThe only area that has shown meaningful growth in the 2 to 3 percent range is a lifestyle project or an outlet project,\u201d he said. While outlets have been around for years, they are still popular in metropolitan tourism markets, where shoppers can score luxury goods for less while strolling outside.\u00a0<\/p>\n
Indoor-outdoor living, which has seen a popularity boost in the residential market, is desirable in commercial spaces, as well. \u201cThere needs to be a compelling reason to draw customers to a center beyond the desire to make a purchase,\u201d said Koshley. \u201cWe are seeing centers raze anchor stores and replace them with outdoor hospitality-oriented lounges and dining experiences.\u201d The concept of outdoor dining combines the draw of a relaxing outdoor setting with the increasing consumer focus on healthy, unique or local food that makes dining out more of an experience than grabbing something from a food court featuring the same chain restaurants as every mall across the country.<\/p>\n
\u201cThe future of retail demands that a developer provide that third place in life\u2014we work and we live, but we have to have an entertainment or dine-type place,\u201d explained Rose.<\/p>\n
While it may take a while for the average consumer to embrace sky diving or rock climbing at their local shopping center, movie theaters are an almost universal mall staple that are being redeveloped, as well. According to Rose, the new iteration of the movie theater experience includes high-end food and drinks as well as table service, almost like the pre-film era of dinner-and-a-show.<\/p>\n
\u201cThe consumer is happy to pay a premium price to have premium seating, to have services delivered while at the theater, and of course, the most important aspect is being able to reserve your seat online in advance,\u201d he said. \u201cIf you combine that with a mall that is offering other dining choices and other interesting shopping experiences, that\u2019s really the formula for success moving forward.\u201d<\/p>\n
Future proofing<\/h2>\nThe Strand, a combination marketplace and bistro, caters to students at the University of California San Diego.<\/p><\/div>\n
While property experts have identified strategies to draw consumers into retail centers, the retailers likewise must themselves find means to compete against the growing popularity of online shopping. \u201cWith so much actual purchasing moving to online, many types of retailers must begin to think of their stores as showrooms at the most and billboards at the least, and structure their deals in those terms,\u201d Ziegler advised. \u201cGetting into the best location with the right demographic is going to give consumers a chance to touch and feel the product but it is also going to boost your brand.\u201d<\/p>\n
Green offered Best Buy as an example of a retailer that is successfully adapting its in-store presence to not only create a showroom for its products but give customers a hands-on experience with the products. The retailer is now subleasing booths in its stores to the brands it carries, allowing those interested in, for example, a Google phone, to ask a brand representative questions and try out the device before purchasing.<\/p>\n
However, not every type of retailer is suited to the showroom tactic, and some may still be able to continue with their in-store sales model. Selby recently asked both a children\u2019s retailer and a menswear store owner if they were afraid of the concept of someone trying out a product in their local store and then buying an equivalent online. The menswear seller said that people still want to feel fabrics and try things on, as well as take advantage of in-house tailoring, where they can consult an expert about fit. \u201cIt\u2019s a level of service that you can\u2019t get online,\u201d said Selby. As for the children\u2019s retailer, the response was that most people who are either new parents or buying for someone else like to consult store staff on sizing, age-appropriateness and comparisons between different products.<\/p>\n
Koshley sees the local or specialty store experience as irreplaceable for some shoppers. \u201cThe person intent on experiencing the feel of a piece of fabric or the heft of a carving knife seeks a sensory experience that can only be realized in destination retail. Retail properties can never be as convenient as ordering online while lying in bed in your pajamas with a cup of coffee by your side. But for the consumer wanting to enjoy an experience that creates a lasting memory, there is still no online substitute for destination retail.\u201d<\/p>\n
While it\u2019s evident that brick-and-mortar is here to stay, it\u2019s also imperative that it evolve with the changing habits of consumers and the technology that accompanies this. Retail property owners should stay vigilant and monitor performance of fundamentals, since the retail climate can be fickle and depends on a variety of influencing factors, Rose advised.<\/p>\n
\u201cGiven the strength of the economy and the strength of our retailers, it is expected that (the high value of retail) should (continue) for a while,\u201d he said. \u201cWe need to be mindful: We need to watch job growth, we need to watch inflation and interest rates, because those will have some heavy impact on values of real estate.\u201d<\/p>\n
The Shoppes at Carlsbad is undergoing extensive renovations to better fit within its hip beachside community.<\/p><\/div>\n
Malls enjoyed their heyday in the late 1980s through the \u201990s, impacting not only suburban families\u2019 spending habits but teenage and young-adult culture. The concept of big-budget movies, popular fast food and the latest clothing trends in one location was uncommon before the late 20th century.<\/p>\n
While the mall popularity boom was much about having a place to go with friends and load up on fast food for its mostly teen customers, shopping itself was also a special activity. Today, though, people shop easily, whenever and wherever they want, on mobile devices, and going into a physical store can feel like an errand or a chore.\u00a0 As Rose put it, \u201cI can easily buy a pair of shoes on the Internet from Zappos. But what\u2019s really fun is going out, having a fun dinner, maybe a movie and then shopping for some (shoes) because we\u2019re out there.\u201d<\/p>\n
Anchoring the shopping center or outlet with an activity gives consumers more of an incentive to visit the mall with friends\u2014and the activities have ramped up. Sean Selby, architect at Arrowstreet in Boston, is working on mall development projects that feature activities like rock-climbing, mini-golf and even indoor sky-diving. Koshley sees this aspect of the evolution of retail development as more of a cohesive rebranding strategy for the category as a whole. \u201cRetail centers are becoming hospitality and entertainment destinations rather than simply an amalgamation of disjointed brands,\u201d he explained. \u201cA customer may journey to a retail center simply for the experience rather than for a specific purchase.<\/p>\n
As a result, the \u2018impulse buy\u2019 becomes a stronger component. You make a purchase while on a stroll through a pleasing environment, rather than darting in and darting out of the mall as quick as you can.\u201d<\/p>\n
Another approach is incorporating necessity. As grocery-anchored local centers have gained popularity across the country, the strategy of using popular grocery destinations like Whole Foods, Trader Joe\u2019s and Costco as a draw has expanded to malls, as well. \u201cThere\u2019s already a lot of traffic coming to the mall; why wouldn\u2019t the supermarket owner want to be there? For the mall owner, it brings more people in because the average supermarket shopper comes (an estimated) 2.2 times a week, while the mall shopper comes (some) 1.1 times per week,\u201d said Green.<\/p>\n
The popularity of both specialty foods and bulk discount stores draws in a family-centered and health-conscious consumer base that may not necessarily be the target of a traditional mall. \u201cThe standard, typically fashion-focused shopping center approach with a chain-based food court does not always address the interests of the entire family,\u201d Ziegler said.<\/p>\n
The lifestyle center experience<\/h2>\nRouse Properties\u2019 Newpark shopping center features a dining pavilion that fuses the indoors and out.<\/p><\/div>\n
Just as the mall revolutionized retail in the \u201980s and \u201990s, the lifestyle center is paving the way for a new kind of retail experience. While today\u2019s luxury lifestyle centers like the mall offer entertainment, shopping and dining, these concepts are presented in a 21st century way. What can\u2019t be shopped for or experienced online is what is making the lifestyle centers of today as popular as the super malls of yesterday. According to Rose, the new lifestyle center concept is an indoor\/outdoor property with mixed-use components like offices, gyms, hotels and even apartments.<\/p>\n
The concept of a lifestyle live-work-play destination has promise. \u201cThe only area that has shown meaningful growth in the 2 to 3 percent range is a lifestyle project or an outlet project,\u201d he said. While outlets have been around for years, they are still popular in metropolitan tourism markets, where shoppers can score luxury goods for less while strolling outside.\u00a0<\/p>\n
Indoor-outdoor living, which has seen a popularity boost in the residential market, is desirable in commercial spaces, as well. \u201cThere needs to be a compelling reason to draw customers to a center beyond the desire to make a purchase,\u201d said Koshley. \u201cWe are seeing centers raze anchor stores and replace them with outdoor hospitality-oriented lounges and dining experiences.\u201d The concept of outdoor dining combines the draw of a relaxing outdoor setting with the increasing consumer focus on healthy, unique or local food that makes dining out more of an experience than grabbing something from a food court featuring the same chain restaurants as every mall across the country.<\/p>\n
\u201cThe future of retail demands that a developer provide that third place in life\u2014we work and we live, but we have to have an entertainment or dine-type place,\u201d explained Rose.<\/p>\n
While it may take a while for the average consumer to embrace sky diving or rock climbing at their local shopping center, movie theaters are an almost universal mall staple that are being redeveloped, as well. According to Rose, the new iteration of the movie theater experience includes high-end food and drinks as well as table service, almost like the pre-film era of dinner-and-a-show.<\/p>\n
\u201cThe consumer is happy to pay a premium price to have premium seating, to have services delivered while at the theater, and of course, the most important aspect is being able to reserve your seat online in advance,\u201d he said. \u201cIf you combine that with a mall that is offering other dining choices and other interesting shopping experiences, that\u2019s really the formula for success moving forward.\u201d<\/p>\n
Future proofing<\/h2>\nThe Strand, a combination marketplace and bistro, caters to students at the University of California San Diego.<\/p><\/div>\n
While property experts have identified strategies to draw consumers into retail centers, the retailers likewise must themselves find means to compete against the growing popularity of online shopping. \u201cWith so much actual purchasing moving to online, many types of retailers must begin to think of their stores as showrooms at the most and billboards at the least, and structure their deals in those terms,\u201d Ziegler advised. \u201cGetting into the best location with the right demographic is going to give consumers a chance to touch and feel the product but it is also going to boost your brand.\u201d<\/p>\n
Green offered Best Buy as an example of a retailer that is successfully adapting its in-store presence to not only create a showroom for its products but give customers a hands-on experience with the products. The retailer is now subleasing booths in its stores to the brands it carries, allowing those interested in, for example, a Google phone, to ask a brand representative questions and try out the device before purchasing.<\/p>\n
However, not every type of retailer is suited to the showroom tactic, and some may still be able to continue with their in-store sales model. Selby recently asked both a children\u2019s retailer and a menswear store owner if they were afraid of the concept of someone trying out a product in their local store and then buying an equivalent online. The menswear seller said that people still want to feel fabrics and try things on, as well as take advantage of in-house tailoring, where they can consult an expert about fit. \u201cIt\u2019s a level of service that you can\u2019t get online,\u201d said Selby. As for the children\u2019s retailer, the response was that most people who are either new parents or buying for someone else like to consult store staff on sizing, age-appropriateness and comparisons between different products.<\/p>\n
Koshley sees the local or specialty store experience as irreplaceable for some shoppers. \u201cThe person intent on experiencing the feel of a piece of fabric or the heft of a carving knife seeks a sensory experience that can only be realized in destination retail. Retail properties can never be as convenient as ordering online while lying in bed in your pajamas with a cup of coffee by your side. But for the consumer wanting to enjoy an experience that creates a lasting memory, there is still no online substitute for destination retail.\u201d<\/p>\n
While it\u2019s evident that brick-and-mortar is here to stay, it\u2019s also imperative that it evolve with the changing habits of consumers and the technology that accompanies this. Retail property owners should stay vigilant and monitor performance of fundamentals, since the retail climate can be fickle and depends on a variety of influencing factors, Rose advised.<\/p>\n
\u201cGiven the strength of the economy and the strength of our retailers, it is expected that (the high value of retail) should (continue) for a while,\u201d he said. \u201cWe need to be mindful: We need to watch job growth, we need to watch inflation and interest rates, because those will have some heavy impact on values of real estate.\u201d<\/p>\n
Rouse Properties\u2019 Newpark shopping center features a dining pavilion that fuses the indoors and out.<\/p><\/div>\n
Just as the mall revolutionized retail in the \u201980s and \u201990s, the lifestyle center is paving the way for a new kind of retail experience. While today\u2019s luxury lifestyle centers like the mall offer entertainment, shopping and dining, these concepts are presented in a 21st century way. What can\u2019t be shopped for or experienced online is what is making the lifestyle centers of today as popular as the super malls of yesterday. According to Rose, the new lifestyle center concept is an indoor\/outdoor property with mixed-use components like offices, gyms, hotels and even apartments.<\/p>\n
The concept of a lifestyle live-work-play destination has promise. \u201cThe only area that has shown meaningful growth in the 2 to 3 percent range is a lifestyle project or an outlet project,\u201d he said. While outlets have been around for years, they are still popular in metropolitan tourism markets, where shoppers can score luxury goods for less while strolling outside.\u00a0<\/p>\n
Indoor-outdoor living, which has seen a popularity boost in the residential market, is desirable in commercial spaces, as well. \u201cThere needs to be a compelling reason to draw customers to a center beyond the desire to make a purchase,\u201d said Koshley. \u201cWe are seeing centers raze anchor stores and replace them with outdoor hospitality-oriented lounges and dining experiences.\u201d The concept of outdoor dining combines the draw of a relaxing outdoor setting with the increasing consumer focus on healthy, unique or local food that makes dining out more of an experience than grabbing something from a food court featuring the same chain restaurants as every mall across the country.<\/p>\n
\u201cThe future of retail demands that a developer provide that third place in life\u2014we work and we live, but we have to have an entertainment or dine-type place,\u201d explained Rose.<\/p>\n
While it may take a while for the average consumer to embrace sky diving or rock climbing at their local shopping center, movie theaters are an almost universal mall staple that are being redeveloped, as well. According to Rose, the new iteration of the movie theater experience includes high-end food and drinks as well as table service, almost like the pre-film era of dinner-and-a-show.<\/p>\n
\u201cThe consumer is happy to pay a premium price to have premium seating, to have services delivered while at the theater, and of course, the most important aspect is being able to reserve your seat online in advance,\u201d he said. \u201cIf you combine that with a mall that is offering other dining choices and other interesting shopping experiences, that\u2019s really the formula for success moving forward.\u201d<\/p>\n
Future proofing<\/h2>\nThe Strand, a combination marketplace and bistro, caters to students at the University of California San Diego.<\/p><\/div>\n
While property experts have identified strategies to draw consumers into retail centers, the retailers likewise must themselves find means to compete against the growing popularity of online shopping. \u201cWith so much actual purchasing moving to online, many types of retailers must begin to think of their stores as showrooms at the most and billboards at the least, and structure their deals in those terms,\u201d Ziegler advised. \u201cGetting into the best location with the right demographic is going to give consumers a chance to touch and feel the product but it is also going to boost your brand.\u201d<\/p>\n
Green offered Best Buy as an example of a retailer that is successfully adapting its in-store presence to not only create a showroom for its products but give customers a hands-on experience with the products. The retailer is now subleasing booths in its stores to the brands it carries, allowing those interested in, for example, a Google phone, to ask a brand representative questions and try out the device before purchasing.<\/p>\n
However, not every type of retailer is suited to the showroom tactic, and some may still be able to continue with their in-store sales model. Selby recently asked both a children\u2019s retailer and a menswear store owner if they were afraid of the concept of someone trying out a product in their local store and then buying an equivalent online. The menswear seller said that people still want to feel fabrics and try things on, as well as take advantage of in-house tailoring, where they can consult an expert about fit. \u201cIt\u2019s a level of service that you can\u2019t get online,\u201d said Selby. As for the children\u2019s retailer, the response was that most people who are either new parents or buying for someone else like to consult store staff on sizing, age-appropriateness and comparisons between different products.<\/p>\n
Koshley sees the local or specialty store experience as irreplaceable for some shoppers. \u201cThe person intent on experiencing the feel of a piece of fabric or the heft of a carving knife seeks a sensory experience that can only be realized in destination retail. Retail properties can never be as convenient as ordering online while lying in bed in your pajamas with a cup of coffee by your side. But for the consumer wanting to enjoy an experience that creates a lasting memory, there is still no online substitute for destination retail.\u201d<\/p>\n
While it\u2019s evident that brick-and-mortar is here to stay, it\u2019s also imperative that it evolve with the changing habits of consumers and the technology that accompanies this. Retail property owners should stay vigilant and monitor performance of fundamentals, since the retail climate can be fickle and depends on a variety of influencing factors, Rose advised.<\/p>\n
\u201cGiven the strength of the economy and the strength of our retailers, it is expected that (the high value of retail) should (continue) for a while,\u201d he said. \u201cWe need to be mindful: We need to watch job growth, we need to watch inflation and interest rates, because those will have some heavy impact on values of real estate.\u201d<\/p>\n
The Strand, a combination marketplace and bistro, caters to students at the University of California San Diego.<\/p><\/div>\n
While property experts have identified strategies to draw consumers into retail centers, the retailers likewise must themselves find means to compete against the growing popularity of online shopping. \u201cWith so much actual purchasing moving to online, many types of retailers must begin to think of their stores as showrooms at the most and billboards at the least, and structure their deals in those terms,\u201d Ziegler advised. \u201cGetting into the best location with the right demographic is going to give consumers a chance to touch and feel the product but it is also going to boost your brand.\u201d<\/p>\n
Green offered Best Buy as an example of a retailer that is successfully adapting its in-store presence to not only create a showroom for its products but give customers a hands-on experience with the products. The retailer is now subleasing booths in its stores to the brands it carries, allowing those interested in, for example, a Google phone, to ask a brand representative questions and try out the device before purchasing.<\/p>\n
However, not every type of retailer is suited to the showroom tactic, and some may still be able to continue with their in-store sales model. Selby recently asked both a children\u2019s retailer and a menswear store owner if they were afraid of the concept of someone trying out a product in their local store and then buying an equivalent online. The menswear seller said that people still want to feel fabrics and try things on, as well as take advantage of in-house tailoring, where they can consult an expert about fit. \u201cIt\u2019s a level of service that you can\u2019t get online,\u201d said Selby. As for the children\u2019s retailer, the response was that most people who are either new parents or buying for someone else like to consult store staff on sizing, age-appropriateness and comparisons between different products.<\/p>\n
Koshley sees the local or specialty store experience as irreplaceable for some shoppers. \u201cThe person intent on experiencing the feel of a piece of fabric or the heft of a carving knife seeks a sensory experience that can only be realized in destination retail. Retail properties can never be as convenient as ordering online while lying in bed in your pajamas with a cup of coffee by your side. But for the consumer wanting to enjoy an experience that creates a lasting memory, there is still no online substitute for destination retail.\u201d<\/p>\n
While it\u2019s evident that brick-and-mortar is here to stay, it\u2019s also imperative that it evolve with the changing habits of consumers and the technology that accompanies this. Retail property owners should stay vigilant and monitor performance of fundamentals, since the retail climate can be fickle and depends on a variety of influencing factors, Rose advised.<\/p>\n
\u201cGiven the strength of the economy and the strength of our retailers, it is expected that (the high value of retail) should (continue) for a while,\u201d he said. \u201cWe need to be mindful: We need to watch job growth, we need to watch inflation and interest rates, because those will have some heavy impact on values of real estate.\u201d<\/p>\n