Dynamic, mixed-use centers are a response to changes in technology and consumer attitudes.
Changing consumer buying habits have caused retailers and developers to rethink the way they market to and provide products to consumers, thus causing a shift in the types of retail shopping developments popping up throughout the country. As consumers crave convenience, value and unique experiences that extend well beyond the purchase of commodities, developers are responding by creating sophisticated developments that are quickly becoming live-work-shop-play destinations.
Unique, Immersive Experiences
The International Council of Shopping Centers (ICSC) states that the shopping center industry continues to be vibrant and vital to commerce, a testament to the shopping center’s ability to dynamically and effectively adapt to changing technologies, as well as consumer tastes and preferences. Data from a 2015 study by Opinion Research Corporation revealed the vast majority of American adults (83%) visit a shopping center at least once a week; on average, we are visiting shopping centers six to seven times a week! And with ever-expanding choices, convenience has become the biggest driver behind those visits.
Including a mix of discount retailers with higher-end stores, offering eclectic dining options, providing entertainment opportunities such as movie theaters and indoor trampoline and skydiving centers, and incorporating grocery stores into developments are making them day-long, one-stop shopping destinations for consumers. For example, Grand Prairie Developments in Peoria offers shoppers the convenience of being able to pick up last-minute groceries, run into a store to purchase a pair of shoes or clothing, or get a massage and manicure—all before grabbing dinner or a movie. Indoor and outdoor events and happenings also do a lot to attract consumers to shopping centers. Not only do all these offerings benefit the consumer, they also provide more for them to do, especially outside of normal shopping hours.
Consumers today desire richer experiences that go beyond the transaction when shopping, which raises the bar for developers. Millennials are leading that trend, with their strong sense of adventure and yearning for unique, immersive experiences. Grocery stores can successfully be part of a shopping center because they are no longer just selling commodities. Hy-Vee, Kroger and other stores provide experiences, such as cooking demonstrations, product sampling, wine tastings and freshly prepared foods, in addition to bars and restaurants within the store. They bring an element of cross-shopping to a mall that increases traffic to numerous businesses beyond the grocery store itself.
Many developers have moved toward constructing mixed-use developments that incorporate the convenience of a variety of tenant retailers, restaurants and entertainment, in addition to offices, hotels, medical centers and multi-family housing, all in one dynamic center. The recent recession—which has caused many to rent rather than own—along with millennials’ inclination to rent rather than purchase their homes, makes rental living in such mixed-use developments attractive due to their energetic and vibrant community feel.
For example, the Streets of St. Charles mixed-use development in St. Charles, Missouri not only has a lively atmosphere for those who visit or live there, it is also appealing to those who work at companies located in offices on the property. With employees working remotely and digital technology allowing close collaboration among different locations, businesses can, in turn, utilize smaller spaces above or near retail spaces in such developments. This creates a “win-win” situation for employees who don’t have to commute as far to enjoy the center’s vast amenities, and for employers who can use less expensive and more flexible space.
Bricks and Mortar
Finally, lest you think online shopping is killing the need for brick-and-mortar stores, just take a look at the current trends. Real Estate Business Online reports that only 10 percent of all consumer purchases are made online, leaving 90 percent of purchases made at physical storefronts. In fact, there is even a significant trend by online retailers to open brick-and-mortar locations. That includes Amazon, Athleta, Boston Proper, Rent the Runway and Warby Parker, just to name a few. Rather than being an “either/or” that splits online and in-store shopping, mobile and digital technologies complement the in-store experience with convenient apps and access to price-comparison shopping. Brick-and-mortar stores still give shoppers the opportunity to see and touch before purchasing.
As long as developers and retailers continue responding to the evolving ways in which people live and changing attitudes about how commodities are purchased, shopping centers will continue to thrive. Dynamic, mixed-use centers create and support millions of jobs in the U.S., adding to the quality of place in the communities in which we live, work and visit. iBi
Kathleen Brill is Vice President and Director of Leasing for Cullinan Properties, Ltd. Vic Pildes is Vice President, Leasing and Development, for Cullinan Properties, Ltd. For more information, visit cullinanproperties.com.