LAS VEGAS—Some 35,000 gathered in Las Vegas for the ICSC RECON. Among the panels was Envision 2020 Town Hall: Redefining Our Industry. The retail and shopping sector is experiencing one of the most profound transformations in its 60-year history. Envision 2020 is a new board of trustees level transformational change initiative, which defines eight major trends impacting the shopping center industry over the next five years.
The first trend discussed by moderator Stephen D. Lebovitz, ICSC chairman and CEO of CBL & Associates Properties, Inc., was the unification of brick and mortar with online shopping. “We used to say that e-commerce would put retail out of business, that is not so anymore,” he said.
“People want to feel stuff, come together and communicate with other people,” said Steven P Kirn, executive director, Miller Retail Center, University of Florida. “They still want to come together, there is a social aspect to the mall and I don't see that changing. The question is: How does she want to shop? Women shop as an engaging social experience. Everything is in flux, but there is a great future in brick and mortar with food and apparel integrated in the nexus of omnichannel marketing.”
“How do shopping centers address changing demographics?” asked Lebovitz.
Mark Stapp, executive director, masters of Real Estate Development, Arizona State University, replied, “If you don't understand the nuances, it's difficult to make strategic decisions. Information by itself is useless. It's how you use it that counts.”
Another point discussed was how technology is personalizing the relationship with the customer. Lebovitz said, “Europe is ahead of the world in the use of technology and retailers are struggling with that.”
Other key points on the initiative will be:
-Landlord/tenant relationships: retailers collaborating with landlords to optimize the shopping experience
-Flexible center formats: incorporating distribution sites
-The role of shopping centers in communities: the conversion of shopping centers into communities
-The emergence of a new blended rental model
-The arrival of retail friendly investment outlook: new kinds of financial partners
“More women are becoming educated and that means in 20 years, women will be running things,” said Richard K. Green, director and chair, USC Lusk Center for Real Estate. “This means that women will have less time to shop. Men don't want to shop. The will also be a greater income disparity in the coming years making it difficult to see the future of B, C, and D centers. Different uses for shopping centers will be key for success.”
“What do you do with an outdated mall?” asked Jim Spaeth, executive director for Leonard W. Wood Center for Real Estate Studies. “Convert it to services: fitness, theater, kid's museum, upscale restaurant. Physical space is important, but it has to be authentic.
Stapp said, “More and more, design is becoming critically important to create an engaging experience. Converting a clunky mall requires a great design team. What does the community need? You have to sometimes change uses totally and that's easier said than done. The community and local government have to sometimes be the champion and offer incentives.”
“The amount of capital coming into real estate is not something people are prepared for. Eighty percent of global real estate capital comes to the US. The tsunami of capital chasing retail will hit retail,” said David L. Funk, director, Baker Program in Real Estate, Cornell University.
“Retailing is becoming hospitality,” added Stapp. “It's got to be a great story; you've got to get people to understand these assets.”
“Macys and Saks are doing off-price brands to segment themselves and target different populations. Broad appeal is not the winning formula anymore,” said Kirn.
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