GlobeSt.com is providing wall-to-wall coverage of ICSC's RECon show in Las Vegas May 18-20. Retail Ticket will provide coverage of the event through the end of May, featuring pre-event articles, live video interviews on site and post-conference analysis.

NEW YORK CITY-It's back! RECon, the International Council of Shopping Centers' sprawling annual get-together. As more than 35,000 attendees prepare to descend on the Las Vegas Convention Center for this year's edition, ICSC president and CEO Michael Kercheval sat down recently with GlobeSt.com to paint a picture of the retail landscape. There are major game-changing shifts taking place, in both the social and legislative aspects of the industry, he says, and these will be reflected at the conference. But the major takeaway, he believes, will be one of surprise.

GlobeSt.com: What will be the headline, the major takeaway, when the dust settles after this year's RECon?

MICHAEL KERCHEVAL: The strength of the industry. During the recession, people were still buying groceries and they were still eating, of course. But they became far more economical and shifted down to more value areas, and the Costcos and Dollar Stores started doing very well. On the high end, frankly, a new concept emerged...inconspicuous consumption. People were still shopping at Tiffany's but they were asking for brown paper bags.

GlobeSt.com: And today?

KERCHEVAL: Conspicuous consumption isn't totally back but there's less anxiety or guilt about that little blue Tiffany's bag. We're still coming out of the recession in terms of finding a footing for the industry. You still see the Dollar Stores and the like doing quite well. There have been a lot of questions about the strategies of retailers such as JCPenney and Sears.  At the same time, there have been a lot of positive discussions about Macy's, which seems to be on track. Maybe the department stores are starting to find their footing.

GlobeSt.com: In the midst of all the economic changes, there's also been a huge shift at the hands of the Internet.

KERCHEVAL: This past holiday season, Internet sales grew faster than store sales, but both showed growth. We saw a shift from shopping online to shopping in the brick-and-mortar store and making purchases online. Showrooming has gone mainstream, and we discovered it's not a four-letter word.

GlobeSt.com: But is it a sustainable model?

KERCHEVAL: Most of our brick-and-mortar retailers will say it's not only sustainable, it's the future. So-called omni-channel retailing is the key to success. Certainly we've seen brick-and-mortar stores create an online presence, but we've also seen online stores rushing to open a brick-and-mortar presence.

And landlords are looking at it differently also. As brick-and-mortar centers serve more as retail and distribution outlets, shopping centers are looking at what that means in terms of access, trucks, the type of shopper and even how to figure what rents should be in the future.  The shopping center role is transcending what it was 20 or 30 years ago.

GlobeSt.com: Let's stay on the Internet for a second.  What's the status of the Marketplace Fairness Act?

KERCHEVAL: Its passage should be a no-brainer. It was passed by the US Senate a year ago and now it's sitting in the House. It requires out-of-state retailers to collect sales tax in that customer's state. Right now if I live in New York, and I buy something online from someone who doesn't have a store there, I'm supposed to figure out the sales tax and pay it when I pay my state sales-and-use tax. Most people don't do that, which means the state is losing billions of dollars and it gives online retailers an apparent advantage over brick-and-mortar retailers. This legislation legalizes the enforcement mechanism, and we've mounted a major campaign among our members to support its passage.

Pop-Up Shops and the State of the Mall

GlobeSt.com: So as the market continues to recover, what will attendance look like this year? You hit a peak of 50,000 at one point before the recession. You were anticipating 35,000 last year. How's it look?

KERCHEVAL: Over 35,000. We've been running 10% or so ahead on pre-registrations. We're now above what I'd call a normalized state. There'll be fewer people because the efficiencies of the industry have improved so you don't need to send 150 people from your leasing team. You only need to send 100.

GlobeSt.com: It's not a disappointment if you don't hit the 50,000?

KERCHEVAL: People will be pleased if we don't have so many people there. RECon is all about efficiencies and business, not about whooping it up in Las Vegas. It will still be a crowded event, but you'll get through the aisles. No one will be disappointed, and we're in our sweet spot.

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GlobeSt.com: And what about exhibitors?

KERCHEVAL: We have more exhibitors than last year. Retailers are looking for new space and they can't find it. So they're coming to RECon to look for places to expand. Related to that, there's a ton of renovation, modernization and rebranding taking place, and people are trying to showcase these centers to those retailers. There's a supply-and-demand dynamic driving companies to put together business deals.

GlobeSt.com: We were talking about recessionary trends. Was the pop-up store a freak of the downturn?

KERCHEVAL: It was a product of the downturn that has legs. Retailers found it's very expensive to do market research and open a store and hope it's successful.  A pop-up allows them to test a market and do affordable, real-time research. Now we're seeing extensions of pop-ups, like the stores constructed from shipping containers in Times Square and other markets. Other retailers, such as Red Bull, are using the concept as a brand-promotion venue in malls.

It's even spilled over into automobiles. The Related Cos. reports that the Tesla stores have the second highest sales per square foot, right behind Apple Stores.

GlobeSt.com: I'm glad you mentioned malls. Are the reports of their death premature?  

KERCHEVAL: That will be another takeaway from RECon that will be a surprise. Especially for the consumer press. Not GlobeSt.com because you guys are fair and balanced. We combat that myth of the mall every day. The mall and shopping center industry is very strong and reinventing itself.

GlobeSt.com: How?  

KERCHEVAL: In two ways. First there's the convergence of technology that we mentioned before. It will have a major presence at the event. Coca Cola will present what it calls a Happiness Lounge, but it's actually a technology-convergence center featuring how social media, technology, consumer branding and retail will converge. Biz Stone, co-founder of Twitter, will speak on that issue, as will Mike Duke of Walmart.

Also, many malls are also redefining themselves by moving beyond just fashion. Unlike the 1980s, today malls are emphasizing the social experience and you'll see more services, more salons and gyms and spas and white-tablecloth restaurants.

We can't say that every shopping mall is becoming a village square. There are those that have become a convenient place for good prices. That's their highest and best use. Other malls are very successful and de-malling and making it that very comfortable town square experience. The mall today is not the mall of the 1980s. As I said, there are going to be surprises at this year's RECon.