Trends in Urban Retail

Trends in
Urban Retail
Philadelphia
April 22, 2015
Big Trends
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Consolidation
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Paring the Field
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Penny’s
Sears
Target
Gone: Linens &
Things, Circuit City…
Multi-Format
 All
sizes and all
shapes
 From 15,000 sq.ft. 250,00 sq. ft.
Mixed-Use
Walmart
 In cities
 Below residential
 Without surface
parking
Serving New Markets
OMNI-CHANNEL SHOPPING
TODAY’S RETAIL REQUIREMENT
COMBINATION
CATALOG
IN STORE
ON LINE
ON SMART
PHONE
The Shopping Journey
Research
Test & Trial
Purchase
Fulfillment
Return
90% of shoppers engage the physical store
somewhere along the shopping journey
Source: AT Kearney report: “ On Solid Ground”
The Competition……
Amazon
Zappo’s
Malls are changing too
 1000-1200
malls in the US

“A” Malls: strong, regional leaders: 25%

“B” Malls: less strong but stable

“C” & “D” malls, getting weaker and
generally will be demolished or converted
to other uses
Overbuilt or Under-demolished?
Demographic Barbells
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Gen Y and the Boomers are the large age
cohorts in America
Gen Y LOVES to shop in all formats, but:
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Has limited disposable income
Less car ownership
Spends more on entertainment, food than
goods
Boomers are down-sizing, de-accessioning,
more car oriented, retirement worried
New Realities in Retail
 “Clicks”
 On-line
and “bricks” have integrated fully
retailers opening in- place stores
Competing on ?
 Price?
 Service?
 Convenience?
 Inventory?
 Experience?
What does it mean for retail
real estate?
 Little
total retail sales growth over past 10
years
 On-line retail will continue to grow
 Retailers will close stores and diminish the
total number of outlets they have,
choosing only the “best” locations
 Retail moving to districts, mixed-use
(horizontal and vertical) and away from
stand-alone projects
UPPING YOUR GAME
Before
East Liberty, Pittsburgh
East Liberty, Pittsburgh
Companies Move Back Downtown
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Amazon
Sara Lee
Blue Cross, Blue Shield
Pinnacle Airlines
Quicken Loans
Zurich Financial Services
Gensler
Zappos
Twitter
Living Social
Devon Energy
Facebook
Companies Seek
• New Work Force
• Amenity Rich Locations
• Access/Connectivity
• Result: New neighborhoods
• Shuffling the A
List/Location
Walkability…Amenities…PLACE
Target – Minneapolis, MN
Amazon is moving 7000 employees into
downtown Seattle
They will move into 9 new buildings and 2 historic renovations,
all in a mixed use neighborhood fully accessible
Developer’s Role
 Visioning
 Partnering
 Risk
sharing
 Re-imagining
Food, food, food
Downtown Boise or ???
 All
the ingredients
 Great
building
stock
 Great, diverse
restaurants and
food offerings
 Increasing housing
In the MIX
 Housing
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City as living room
Amenities
Common spaces
Storage
Pets
Diversity of renters
In the MIX: Retail
 Mixed
everything
 Change
 Compete on
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Service
Price
Selection
Experience
Convenience
Rooftops FOLLOWING retail
ULI Resources
Retail in Underserved
Communities
Stay Tuned
 New
Gen Y Housing Report: What We
Want and Where We Want It
 America
 Creative
in 2015 survey
Finance in Small and Medium
Sized Communities