We caught the latest industry news and trends at this year’s International Council of Shopping Center’s (ICSC) recent Southern California Idea Exchange, held Jan. 27 at the Los Angeles Convention Center.
While the conference focused on Southern California, the retail trends that were discussed are relevant nationwide. The panels convened top brokers, owners, developers and retailers to weigh in—and they all agreed on three things.
1. Experience-based retail can help counter online shopping.
Shopping centers must do what they can to adapt to the continued rise in online shopping. Owners and developers are tackling this issue by placing a higher premium on tenants that provide a service or customer experience that’s difficult to replicate online.
Savvy retail brokers who seek continued success with today’s shopping center landlords will want to keep an especially close eye on service-based tenants, such as:
- Fitness centers
- Retail medical clinics
- Dry cleaners
- Nail salons
- Entertainment (think movie theaters, trampoline parks and bowling alleys)
Entertainment tenants in particular are gaining popularity because they create an experience that links a consumer with a specific shopping center. Once that loyalty is built, a consumer is likely to return to the property, spending more time and more money there. It’s the same experience-oriented strategy that has made restaurant tenants the darlings of retail landlords.
2. Food and beverage category can be a draw in itself.
Trendy bars and restaurants are gaining so much clout that certain projects in Southern California, such as The Point in the Los Angeles submarket of El Segundo, have shirked big-name anchor tenants in favor of a collection of small, hip eateries.
It’s a surprising but important truth to keep in mind: Department stores, big-box retailers and even supermarkets are not necessarily needed anymore to anchor an existing property or under-construction project.
3. Diversity of expertise needed as mixed-use projects increase.
While mixed-use developments have previously been confined to populated urban cores, some markets are seeing them explode in other areas. Panelists at the conference discussed their recent successes with adding a retail component to office, hotel or apartment projects—strengthening the traffic count, time spent on site and revenue for both uses.
Though you may think of yourself solely as a retail broker or an office broker, now may be the time to broaden your horizons as the lines between each product type blur. Soon enough, an office broker may have to sell a potential office tenant on the diverse mix of casual and fine dining restaurants just steps outside his lobby’s door. Conversely, a retail specialist may be peppered with questions from a fine dining restaurant about the latest tech tenant to take up shop next door, including how many employees they have, what kind of space they opted for, general employee demographics and how often they’re likely to host clients in and around the office.