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— Retail Properties Quarterly — August 2016
R
etail is the most dynamic of
all the asset classes and con-
stantly is reinventing itself.
Ben Franklin’s words, “When
you’re finished changing,
you’re finished,” have never been
truer.
On the heels of the Sports Author-
ity bankruptcy, it
seems appropriate
to pause and take a
look at where retail
is and where it may
be going.
In looking back
at Sports Author-
ity, where was
the experience?
Sports Authority
appealed to the
novice shopper
at a novice price
point, which put it
at a severe disad-
vantage compared
with Amazon
and other online retailers that lack
the overhead costs associated with
bricks and sticks and that seem-
ingly always can win on price. It also
operated like a traditional retailer
focused on merchandising and run-
ning the occasional sale to drive traf-
fic. Outside of trying to compete with
price, what was its differentiator?
Where was its experience?
Compare that to REI, which is the
same retail sector at a higher price
point, and commands higher demo-
graphics. It offers a far greater expe-
rience. Go in for a GPS watch and
you likely are met by an expert in
his field who is experienced, knowl-
edgeable and ready to deliver real
value to you by advising, guiding and
informing you on how to make the
best decision that fits you and in a
faster manner than the internet cur-
rently can provide. Not to mention
– once the experiential retail pur-
chase is complete – you find yourself
inspired by your new purchase, the
brand and the experience the store
delivers. You then are compelled to
book an excursion through REI to put
your new purchase to use and create
a lifetime experience of your own.
This, to me, is the current dichot-
omy in retail today: purchasing vs.
experiencing.
Reflecting on the retail bankrupt-
cies since January 2015, there is
a distinct trend of where retail is
going. In addition to Sports Author-
ity, there have been a dozen bank-
ruptcy filings since January 2015
with seven uses being apparel, two
soft goods, two sporting goods and
one electronics. They include:
• Body Central (apparel)
• Cache Inc. (apparel)
• RadioShack (electronics)
• Fredrick’s of Hollywood (apparel
... sort of)
• Anna’s Linens (soft goods)
• Quicksilver (apparel)
• American (apparel)
• WetSeal (apparel)
• Hancock Fabrics (soft goods)
• Sports Authority (sporting goods)
• Pacific Sunwear (apparel)
• Vestis Retail Group (sporting
goods)
• Aeropostale (apparel)
How many of these would you say
offered an experience?
Strategies
Here are some strategies to look for
– not only in your projects, but also
in your retailers – to ensure you are
delivering a long-standing product to
your customers.
1. Experience.
When was the last
time you had an experience buying
toilet paper – wait, don’t answer that.
Either you offer an experience or
you don’t. Commodity purchasing
like office supplies, dog food and
everyday toiletries are the most vul-
nerable.
Amazon has increased its sales
from $1 billion to $100 billion in only
15 years! Its technology makes it way
too easy to make simple purchases,
but concepts that bring an experi-
ence that cannot be duplicated by
the internet are setting themselves
apart. Just look at the active retailers
in today’s market: food, fitness and
services are dominating the market.
Ask yourself: Is my business internet
proof?
2. Authenticity.
While there is no
silver bullet to create an experi-
ence, to do it well you have to know
your audience and personalize it for
them. Lower Downtown is not Auro-
ra and River North is not Longmont.
Spend the time up front to know
who your audience is and what it
wants. RiNo is a great example. The
renaissance of this once-overlooked
industrial area now is one of the hot-
test markets in Denver because it is
delivering high-quality experiences
while still paying tribute to its roots.
3. Technology integration.
Many of
our properties are using technology
to bring people in, but once we have
them, we must engage with them.
We can have a conversation and
encourage them to make memories
on our sites, which they then can
post about. We want to get a pulse
from our retailer’s shoppers and
keep them engaged. Strong retail-
ers are all starting to embrace the
omnichannel advantages technol-
ogy offers and the experience it can
create. If your merchants are in the
dark ages, your space may be going
dark.
4. Make a difference.
Incorporating
nonprofits and community organi-
zations, such as the music and arts,
answers a need in the community
and ensure that your project does
well by doing good. In a single week-
end, the Village at the Peaks project
raised over $60,000 for the Long-
mont Humane Society and Relay for
the Cure.
Shopping centers are no longer
just for shopping, find an authentic
cause-related need in your com-
munity. By doing so, your shopping
center becomes something more
to the community and, thus, so do
your retailers.
5. Think differently.
Retail from
the past 10 years is not how retail
will be for the next 10 years.
The absence of traditional junior
anchors is making developers incor-
porate different uses to fill the acre-
age these boxes used to.
Smaller pop-up stores and bazaar-
like concepts are opening. These
projects create adaptable uses to
suit community needs and drive
a constantly changing experience.
Common area space is no longer
just used for parking and landscape
islands, but rather to engage the
senses and activate an area.
For instance, at Village at the
Peaks, we incorporate a lawn area
designed to host concerts, commu-
nity events and even the occasional
football game. We installed a mam-
moth water feature to mimic what
you find in a national park to create
a fresh feel, soothing sounds and
relaxing atmosphere. These items
would not have shown up 10 years
ago, but we need to be ready for the
next 10 years and consumers are
demanding more in order to com-
pete for their attention and their
dollars.
Change is what makes retail fun
and, while I may not have a crys-
tal ball, I feel we have some pretty
clear signs as to where we may be
going. I am given hope by a Charles
Darwin quote, “It is not the stron-
gest or the most intelligent who
will survive, but those who can best
manage change.”
s
Luke
McFetridge,
CRX, CSM
Regional property
manager,
NewMark Merrill
Mountain States,
Longmont
Retail Trends
Timothy Siebert
Common area space is no longer just used for parking and landscaped islands, but rather to engage the senses and activate the area.
Timothy Siebert
Village at the Peaks installed a large water feature to mimic what consumers would find
in a national park to create a fresh feel, soothing sounds and relaxing atmosphere.
