I attended an interesting retail panel at the ULI Fall Meeting. It explored how entertainment, experiences, landscaping andcan make a big difference in the current economic environment. Panelists talked about how consumers want more than just places to go and shop. They want community. They want to be entertained. They want to be amused. They want to be in pleasant settings where they can linger.
The panel was moderated by Alan McKeon, president and CEO of Alexander Babbage Inc., and featured Julie Brinkerhoff-Jacobs, president and CFO of Lifescapes International Inc., Blake Cordish, vice president of Cordish Co., NormaLynn Cutler, president of Cutler Enterprises and Anselm Fusco, senior vice president, investments of Madison Marquette. It looked at projects including Caruso Co.'s The Grove in Los Angeles, Cordish's Power & Light District in Kansas City and Madison Marquette's Asbury Park in New Jersey, among others.
All the speakers emphasized how providing unique experiences can make projects magnets of activity, which then creates more sales opportunities. For example, Asbury Park--which is a redevelopment of a classic boardwalk that fell out of favor--once again buzzes with activity. Creating a community spot means embracing some unconventional activities. Fusco talked about how a weekly drum circle now comes to the site. That's the kind of thing that would never fly in a mall. But it's the kind of organic community activity that has helped turn Asbury Park into a success. After an uphill battle, the site is now fully leased and generating same-store sales increases at a 20 percent to 30 percent clip.
Cordish, meanwhile, admitted that the downturn had tested his firm's faith in building entertainment-themed projects. But they opted to not only remain committed, but to up the ante and increase the number of events at properties throughout its portfolio. That too is paying dividends for the firm. And it's provided a lesson as well. The answer is not necessarily doing the same thing on every site. Connecting with local communities means tapping into local interests. It's not about replicating tenant mixes or adding the same kinds of entertainment options at every project. As he put it, "Ambiance is the anchor, not concepts."
Brinkerhoff-Jacobs added that projects didn't necessarily need to be large scale in order to apply these kinds of lessons. Her firm has worked on projects both big and small. But in all cases what her landscapefirm has tried to bring to the table is a focus on creating "delightful landscapes environments." This can be as simple as providing ample shaded seating in an outdoor common area. Or it can be more ambitious--performance spaces, fountains. Regardless, the idea is to build spaces that people want to spend time in. That, in turn, will translate into repeat visits and more sales for retailers at the center.
Food for thought. Consumers have less to spend and more options for how to shop. Online and mobile shopping will continue to alter behaviors. The best bet is to get on board with ways to use those technologies to drive and enhance in-mall shopping experiences. Just delivering goods is not going to cut it. Going forward, the retail real estate industry needs to be about creating experiences.