- May 01, 2015
People are shopping again, and the retail real estate sector is reaping the rewards. While every retail segment isn’t expanding—and some are shrinking due to mergers or store closures—the improving economy and job market are generally boosting demand for square footage. What’s more, absorption is smarter than it was in the last upcycle, with retailers tending to favor smaller footprints and add fewer stores.
Will that make a difference? There is reason to hope so. The retail industry has historically been very data driven, carefully tracking demographic trends, competitors’ locations, traffic patterns and other metrics, the better to locate stores and attract consumers. Yet it also has a history of overexpansion, and when too many stores open too quickly, consolidation is almost inevitably the result.
History has a habit of repeating itself, but this time around, retailers and landlords are facing new challenges with creative solutions that promise some protection against familiar pitfalls. Shopping center owners are backfilling space and changing up the tenant mix as they capitalize on interest from new quarters, such as healthcare providers, secondary schools and universities, and pop-up retailers. And retailers are not only expanding more cautiously but adjusting their existing sites to strike a better balance between in-store and e-commerce business. In doing so, they are devising better ways to serve customers faster and more easily. Such experimentation suggests an openness to creative thinking and is likely to breed a continuing stream of fresh ideas.
In the realm of demographic shifts, retailers have been at the forefront of efforts to win business by catering to both generational and cultural preferences. As the nation becomes ever more ethnically diverse, retailers and their landlords would do well to adjust their strategies accordingly. This year’s CPE-Nielsen Special Report offers county-level detail on the nation’s changing multicultural landscape, locations that offer the greatest opportunity for targeted retail efforts, and insights from investors who have harvested the fruits of their best practices. You’ll find further new ideas, plus valuable data and analysis, throughout the issue’s Retail Special Section, designed to jumpstart your thinking as you prepare for RECon, the International Council of Shopping Centers’ annual spring event in Las Vegas.
Creativity isn’t just for the retail-minded, of course; a willingness to take smart risks and think creatively benefits any company—and the industry at large. With that in mind, we’ve selected 13 executives who have advanced their companies and introduced industry-benefiting strategies, highlighting their accomplishments in the special report Most Innovative Real Estate Executives.