“Study the past, if you would divine the future,” Confucius once said. The New York Urban Land Institute’s Women’s Leadership Initiative (WLI) panel on retail certainly journeyed through the past to make insights on how retail can successfully evolve and create more future-proof commercial real estate investments.
Moderated by Mark A. Cohen, Director of Retail Studies and Adjunct Professor of Marketing of Columbia Business School, the panel featured women professionals at the top of their field in various disciplines from design, to development and construction, to investment management. Joining Cohen were Lauren Adams, Director of Strategy and Brand Design Principal at Gensler; Judith Knop, Senior VP of Development and Construction at Urban Edge; and Onay Payne, Managing Director of Clarion Partners. A diverse group of students, young professionals, and WLI members gathered to hear from these luminaries and ask probing questions, often inciting laughter and coy responses from the retail experts.
To kick off, Cohen gave perspective on how regional malls and strip retail became so popular and prevalent through subsidized highway development in the Eisenhower era. The plethora of malls developed in the 1960s-1980s hollowed out downtown shopping districts, which are just now becoming revitalized as consumers once again embrace city living. While he emphasized that current trends show the retail industry as a whole will be healthy in terms of dollars spent, the pace of retail bankruptcies is increasing, showing that many retailers are not suitably adjusting to manage e-commerce profitably.
Solutions for addressing the current retail context were a key focal point of the panelists. Urban Edge, which has a portfolio comprised of mostly strip centers, is being more thoughtful and selective about turning over tenants. Gensler is pioneering an “experience index” to help brands understand how consumers currently are using and want to use space; consumers are increasingly expecting a “mashup of uses” of space such as taking classes in stores or doing work in hotel lobbies. Clarion Partners is adapting its malls to have more community spaces and is closely monitoring trends in ways consumers allocate their wallet share to food and beverage. New data is emerging that shows how certain retailers such as Wegman’s create a more frequent visitation and shopping pattern than other traditional mall anchors.
Inevitably, the discussions of brands and retailers drew inquisitive audience questions, in which audience members teased out the experts’ opinions of which retailers were “hot or not.” The panelists also emphasized themes such as a store’s editorial energy, productivity of square footage, and how traditional retail formats are being challenged by capsule or micro-targeted formats. Panelists opined that developers and owners should have programs which focus on adapting to local contexts, such as bringing in local tenancy or creating spaces which feel flexible but not too generic. At its conclusion, the panel undeniably left an impression of retail as an exciting real estate asset type with infinite potential and new business models to test out.