Innovation in Retail Required
Sep 05, 2011
In the last couple of weeks I stopped and visited two shopping centers: Stonestown in San Francisco and the Mall of America in Minnesota. I had not been in a mall in well over a year. I was on vacation when visiting the Mall of America and I was drawn to Stonestown because of people that were scattered at every major intersection promoting the closing of the Borders Bookstore. Call it my age, the lack of need or the ho hum feeling I have when visiting shopping malls but I simply don't go to malls. In fact, I don't visit many retail stores at all with the exception of food outlets and the occasional hardware store. Why is this significant? Because I am not alone in my retail habits.
My smart phone is partly to blame. Today's smart phone has taken over a number of functions that previously would have required me to shop in-store. Watches, books, movies and compasses to software all can be found on my phone: all of which would have been items found in stores in the not too distant past. Changing styles in clothing are also partly to blame. Suits, dress shirts and shoe stores are no longer needed as much. Baby Boomers already having what they need are also to blame. At my age I have a closet full of clothes and I have my toys.
Retailers and retail shopping center owners will have a real challenge in keeping their customer's support. Larger spaces such as Border's in quality shopping centers are going to have to figure out what the next concept is that will work in spaces that large. Answers will have be found through innovation as well as a willingness by retail property owners and the community at large taking chances on new retail concepts. Lucky Strikes is a prime example of a concept that is leasing more Borders type stores and will require support. Lucky Strikes is a combination of bowling, pool, restaurant and bar facilities. However it will remain to be seen if this type of concept can be successfully incorporated into a mall setting that will allow it to be successful while also creating support for other retailers around it. As more of a nighttime concept, it will be interesting to see if a Lucky Strikes will do anything to draw shoppers to a mall during normal daytime hours. Another new store concept is Big Boxes shrinking to mobile type stores. Best Buy and Wal-Mart are now opening up smaller stores that supply only basic items.
The key for success is for shopping centers to do a better job of thinking out of the box. Cookie cutter shopping centers may no longer be the answer for successful retailing.
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Written by: Hans Hansson
Hans Hansson is President of Starboard TCN Worldwide Real Estate Services as well as a member of the Board of Directors for TCN Worldwide Real Estate. Hans has been an active broker for over 26 years in the San Francisco Bay Area and specializes in office leasing and investments. If you have any questions or comments please email firstname.lastname@example.org or call him at (415) 765-6897. You may also check out his website, http://www.commercialspacefinder.com/.