So, you have surely heard the rumors, or read the statistics that ‘brick and mortar’ retail is on the decline, and on-line shopping is on the rise. While this is not new data, real estate professionals are trying brand new strategies to change the trajectory of retail centers, all over the country — Think ‘people, social gathering and community’.
Shopping districts, malls and centers are places where people meet to hang out, socialize, people watch and connect. This is not a new concept, it’s the original mall concept.
Duc Kim from Stantec (Chicago) was recently featured on a CREW (Commercial Real Estate Women) panel and described a new kind of social phenomena that may be on the rise. His idea was to reposition the mall to address community and social impact by creating spaces that people could use for entertainment, meetings, education, workspaces, and just gathering for fun.
Buildings with less emphasis on large anchor tenants and more focus on new, smaller modern brands, and spaces that offer things to do and experience.
Landlords are focusing less on the ‘anchor tenant’ model, where big box retail tenants act as book ends, and are seeking out more curated experiences for the shopper that include place making concepts, game rooms, meeting areas, services, and recreational space, all in one center. Retail leasing professionals will have to be clever, creative, and stretch their thinking on how they market, seek tenants, and brand a property. Research shows that people are more and more likely to visit shopping centers for non-retail reasons such as restaurants, gyms, and for medical treatments (human and pets). These tenants are more service orientated and offer shoppers something that cannot be purchased on-line. Consider backfilling vacant spaces by leasing to non-retail tenants.
Landlords will have to transform their thinking on ways to be creative and flexible with leasing terms as the world and properties change frequently throughout the future. All of us will need to adapt to a faster paced social environment.
Matthew Mason, Managing Director with Conway MacKenzie in Detroit, says, “The expansion of curbside pick-up at many retail stores and centers is a convenience that customers have embraced and will continue to expect long after the effects of the pandemic have receded.” Curbside pickup provides an opportunity for landlords to increase customers’ reliance on, and visits to, its retail centers. There is a potential downside, however, that an overreliance on curbside pickup diminishes cross-shopping and renders retail centers little more than neighborhood distribution centers. As such, thoughtful tenant-mixes and modern shopping center designs are more important to a retail center’s success than ever.
As the world comes out of a year of being holed up at home, so many of us are ready to meet, eat, and shop – in person, with other people. Shopping symbolizes a return to normalization, both socially and economically and people are ready to invest!