What the Shopping Center of the Future Might Include

LAS VEGAS—GlobeSt.com met up with a few executives Monday at ICSC RECon to chat about all things retail. According to Amy Fingerhut, first VP at CBRE, she is seeing an increased interest in retail in urban core submarkets. For example, in downtown Atlanta, she tells GlobeSt.com that the renovation of The Hub at Peachtree Center is about halfway done, and CBRE is remerchandising this 50-year-old mixed-use destination with dining and services that “resonate with today’s office workers and hotel guests, curating our offerings for a dual central business and tourist district whose local population is increasing with new apartment developments as well. It’s an incredibly exciting place to be, and the interest from first-to-market, popular concepts has been consistent throughout this renovation process.”

For these urban projects, for CBRE, it’s all about services and places you have to experience in-person, she explains. “Apparel can be shipped to you, but you’re never going to be able to get a haircut or pedicure online. You need to be there to work your way through an escape room or grab a beer with friends. The shopping center of the future might include a few apparel retailers, ones that are reinventing themselves or really tailored to that market, but we believe the bulk of the draw will be interesting, innovative restaurants and service providers like fitness options who need a physical space.”

We also caught up with David Close, CBRE head of retail occupier services in Europe, the Middle East and Africa, to speak about cross-border retail expansion. “Over the last five years there has been a large influx of brands from North America into Europe,” he tells GlobeSt.com. “Some have been very successful and others have tried and struggled to gain a foothold in a competitive fashion market such as American Eagle and F21. The number of retailers expanding has slowed down with many retailers scaling back their international expansion plans to focus on their domestic market.  However, there is still demand from European retailers to expand in the US with a number of new F&B brands, lifestyle and sports retailers expanding their last year.”

Some retailers are exercising more caution which has led to a slowdown in expansion in some markets, he adds. “Brands are looking at their store portfolios, reviewing and consolidating their stores before focusing on international expansion. The retail sector has evolved and the way consumers shop has changed but the physical store expansion remains fundamental to retailer’s strategy and having a global store network is critical. Tried and tested global locations remain high on retailer’s agenda for expansion.”

Close also tells GlobeSt.com that retailers want the best and most international locations. “This is the same way for both US and EMEA retailers. There is definitely a shift to target capital or major cities rather than regional coverage in a country. Retailers are also looking at their retail formats to see how they need to evolve and change in the current retail landscape.”

Switching gears a bit, we caught up with Todd Caruso, CBRE senior managing director of retail advisory and transaction services on mass mobile data, which entails analyzing mobile-phone data to outline customer traffic patterns, define trade areas and discover new customer segments—key topics here at the ICSC RECon event.

“Mass mobile data has really taken the guess work out of customer-location analysis. It allows retailers to analyze and understand the shopping patterns of their customers as well as the markets they’re serving,” he tells GlobeSt.com.

“With mass mobile data, you have the ability to gauge frequency of trips, the distance customers travel and more. When you analyze that, you can see new customers and potential customers that you might not previously have realized were there. The technology is embraced both by retailers and owners and service providers.”

Finally, we caught up with Neill Kelly, SVP leading the CBRE occupier restructuring and disposition practice, who said that the repurposing of dark boxes is a major theme of the shopping center business today and will be over the next few years. Kelly notes that some people will talk about it as a bad thing, while others will talk about it as an opportunity with a lot of upside.

“There’s no single all-encompassing solution that we’ve yet seen for vacant department stores, no magic bullet. No one solution is that scalable to work across the country. But the power-center boxes might be a slightly different story; Toys ‘R’ Us will be a good barometer as to whether or not there is a large-scale solution to vacancies of this type,” says Kelly. “The filling of vacant, large-format retail space in the US is a microprocess that takes place at a very local level. But the increased supply being driven into the market likely will hasten the appearance of a bunch of new concepts. I think people are going to develop business plans looking to capitalize on the availability of all of this space.”

Keep checking back with GlobeSt.com for more from experts in the next few days and weeks as we fully cover the RECon 2018 event, with thoughts not only from attendees and panelists, but coverage of sessions, parties and more (even after it is all over). Also, be sure to check out some related stories below.

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