One of the major themes I heard time and again at this year's ICSC Spring Convention was the idea of “lifestyle.”
The term is not a new one in the shopping center industry, of course. A few years ago, everyone at ICSC was marketing open-air properties called “lifestyle centers.” This year, lifestyle is not about a specific format, but about an approach to merchandising and retail real estate development that is aimed at capturing the psychographics of the consumer. That can be expressed in many ways, from the layout of mixed-use projects to the décor of individual stores.
Developers and retailers at the show invoked the term over and over when pitching new projects or concepts. Mixed-use projects promise “live/work/play” environments. Simon Property Group and Urban Retail Properties also use the term when describing their new in-mall and in-store television networks as carrying “lifestyle” programming.
New retailer concepts, too, are no longer couched in terms of product offerings, but are rather based on the type of lifestyle benefits consumers can obtain from goods that have been fine-tuned for ever smaller slices of age groups and demographics. Children who are too sophisticated for Build-a-Bear, but not yet ready to strap on the iPod, can build customized dolls at spinoff Friends2Bmade! Women's apparel retailers are fine-tuning concepts for post-college, late 20s, early 30s, and boomers (see Conceptual Art, p. 28).
Lifestyle is really about micro-marketing — tweaking the tenant mix to bring in better restaurants for empty nesters, say, or loading up on entertainment tenants to woo Echo Boomers.
Even the great mass-merchandisers, Target and Wal-Mart, are paying more attention to lifestyle, fine-tuning the merchandise mix for different regions. So while the names remain the same, what's inside the store does not.
This parsing of demographics and psychographics makes a lot of sense. It's appealing to the consumer and gives developers a better chance to differentiate — to really break the old mass-market formulas.
But there are good reasons why you won't see true regionalism or eclecticism in retail development. Chief among these is the soaring power of the top credit tenants, which are viewed as essential anchors for most new developments. They have the muscle to negotiate terms (see Chain Gang, p. 22), including demanding exclusivity in various merchandise categories.
At the same time, national chains that take in-line space are negotiating elaborate cotenancy clauses. So, if you want Coldwater Creek, you're going to have to bring in Chico's or Pottery Barn and a whole host of others. It is not uncommon for a prospective tenant to submit a list of 5, 10 or 12 names as cotenants.
That leaves little room for local color.
Retail Traffic Magazine