February 8, 2017
By Daniella Soloway
While every commercial real estate sector experiences changes, retail seems to continuously be in the spotlight as major department stores announce closures, and e-commerce giants like Amazon grow bigger by the minute. Connect Silicon Valley’s panel, The Evolution of Retail and Mixed-Use, brought five industry professionals to the stage to discuss how consumers’ shopping habits are evolving, and the ways in which retailers are shifting their strategies to keep up with consumer demand.
Moderated by Greensfelder Commercial Real Estate’s Managing Principal David Greensfelder, here are some answers to the big questions:
Q. Commodities are purchased differently than before. How have retail habits changed the marketplace and development of mixed-use projects?
- David Greensfelder stated, “Commodities are all about a tradeoff between price and convenience.”
- Pacific Retail Partners’ Najla Kayyem said, “Services beat goods, and convenience is an experience.” Additionally, there’s also a “see now, buy now” mentality on behalf of the millennials, with the ability to purchase through apps like Facebook and Instagram on the spot.
- Republic Urban Properties’ Michael Van Everyone thinks a key to success is “to understand your target audience.”
- Insight Realty Co.’s Dennis Randall mentioned, “Retail is a component of a MXU project, so it has to mirror what the project is trying to achieve so it is authentic.
Q. With an 86% surge in household formation, millennials are moving back to the suburbs. How’s this shift affecting retail?
- Najla believes that as millennials move into homes from smaller urban apartments, there will be an increase in home goods purchases as they have more space to fill.
- Cushman & Wakefield’s James Chung sees a shift to “move urban to the suburban landscape” with more live/work/eat/play environments taking shape in the ‘burbs.
- Dennis foresees millennials will still want “urbanesque” environments that support their healthy/living green lifestyles.
- Michael took a slightly different approach, explaining that millennials seek a localized market, and are still frequenting business in cities over suburbs. One shift could be that more mom and pop stores fill up mixed-use developments.
Q. Are malls dead?
- James explained that the profile of a mall and non-mall retailer are very different. The landscape and future for horizontal, traditional retail is still there.
- With 1,200 malls in the U.S., Najla does not think malls are dead. She argued that they are evolving, and that the demand for a sense of community is still alive and well.
- Dennis says that “retail is just an aspect of lifestyle” and “the mall segment is completely done, except for those that can reformulate themselves for more for work/lifestyle environment.”
For comments, questions or concerns, please contact Daniella Soloway