We have all heard or seen the daily (hourly) refrain from the media about how “retail is dead” and how we will all live only through the Internet.
By now, you have been back from ICSC RECon (a global real estate convention) for almost two weeks, and your feet have stopped hurting, and your eyes are less red!
In addition to RECon, I have been to two seminars recently on the East and West Coasts listening to senior leaders of retailers, developers, shopping mall owners, and mall management companies. What have we been learning?
There is a lot of agreement about the shopping business in America. They are saying things like:
“Some retailers are just bad operators. They should fail”.
“One billion square feet of retail needs to go away.”
“We may not be overbuilt, we are just under demolished.”
You get the idea.
But there is also this:
“Business is really pretty good, if only the media would stop dwelling on the negative.”
“All of our centers are more than 95 percent occupied.”
“We have set aside hundreds of millions of dollars to renovate and improve our malls.”
“We need to add more mixed uses.”
“We need to think about what we are going to do with those huge parking lots in this era of Uber and Lyft, with self-driving cars right around the corner.”
So, there is also a flip side to the doom and gloom. We are in a time of change and retail is evolving. I heard an interesting comment that the media made about itself. It said, “The media bias is neither liberal or conservative, it is negative about all things!” It apparently is no “fun” to write anything positive about shopping malls or retail stores. “Let’s put a negative spin on the news about retail.”
There is clearly an intent by most people in the retail and restaurant business to “figure it out.” There is consensus that we are in a reset period. We are seeing Internet retailers beginning to build brick and mortar. Some existing retailers are dying. It’s an industry in flux.
So, if you are a mall owner, have money to spend, good occupancy, and are well located, what are you interested in doing to your facility to keep the shoppers coming in and your center vibrant? You are going to try to create a place that is unique, speaks to the shopper’s heart, is innovative, creates an experience, is local, artisanal, is a touchpoint, mixes in new uses, adds in more food and beverage, and looks clean, sparkly, and brand new! Recognize that restaurants with famous named chefs can bring steady foot traffic to your center. Discount retailers also drive shopper traffic because their inventory changes frequently and they can take up a lot of square footage. There is a demand for grocers in centers. Add some entertainment! Make the mall a fun, inviting venue that people want to visit.
For retailers, staff members need to have access to technology and be trained on how to use it to meet customer needs and requests. That means continuous training on a variety of electronic devices that can check inventory, interact with other store representatives to further answer questions, or check product availability at other locations. The staff need to be very attentive to the customer’s requests. Store and company leaders need to talk to their customers, understand that not one fashion or product answer will work for every region, recognize that there are variables (weather, custom, culture, etc.) that will significantly influence what customers want, what they will buy, and stay ahead of the trends.
So, the question then becomes, who is doing that? Where can I go, and see where this has been successfully done? Certainly, there are some malls doing this, but there are some other venues relying on “captive” audiences on a repeat basis that have made or are making many of the creative improvements. Visit the recently opened Legacy West in Plano. Take a trip to Houston and see what changes and betterments Simon Properties has made to the Galleria. Later this year, fly to Los Angeles to see the renovated Century City Mall that Westfield is due to complete. When the renovations, additions of other uses, and changes are complete at The Shoppes at Willow Bend, stop by.
The mall, in its many forms, is still the biggest gorilla in the retail cage. All the store closings, recapturing of the excess space, dying malls, and rethinking of retail, while painful, is probably the healthiest thing for the industry. Let’s get it right! Let’s do it better!
Please remember E. G. Hamilton, FAIA, who passed in early May. He and his firm were the architects for North Park Center. He was a visionary pioneer in the design of shopping malls.
Wish I. M. Pei, FAIA, (famous architect of many wonderful buildings in Dallas) a happy 100th birthday.
Wish Frank Lloyd Wright a happy 150th birthday in July.
Bruce Carlson is CEO and president of CM Architecture.
