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‘EMBRACE CHANGE,’ SAYS PANEL ON RETAIL’S FUTURE

BY STEVE McLINDEN

If retailers lament that to indulge today’s ever-fickle consumer they must turn on a dime, tomorrow’s market will have them spinning like a roulette wheel.

This was one of the conclusions drawn by a panel of retailers and other experts at ICSC’s “What is the Future?” workshop. These specialists gathered to ponder how best to continue to satisfy the public’s insatiable thirst for value, fun and service.

Retail refinements over the next five years will probably include a more intricate blend of in-store stock and catalog offerings, including electronic kiosks, panelists said.

The trend of short-term tenant leases will continue to dominate too, promoting a regular turnover of tenants and concepts, they noted. “The 30-year lease is a thing of the past,” said David P. Lindsey, vice president of store planning for Seattle-based Nordstrom. “The rates of change and distribution channels are changing so quickly, whatever you’re doing today you won’t be doing tomorrow.”

Population shifts in individual markets will make things interesting too. “Retailers are coming to the realization that one size does not fit all and that a tenant mix in a new center is not necessarily going to be right for the neighborhood a few years later,” said retail consultant Margaret A. Gilliam, president of the New York City–based Gilliam & Co. retail consulting firm. “Mall operators are much better at adjusting to improving income levels than they are the reverse.” Gilliam said the growing numbers of lifestyle centers and “their specialties are suited mainly to pockets of affluence,” and may not effectively support changes in population composition.

Panel moderator Robert Tindall, president of Callison Architecture, Seattle, noted some national demographic shifts that all major retailers are facing. As a percentage of the population, he said, “the West is growing, the South is growing, but the East and Midwest are shrinking. And nearly half of all households in the U.S. are headed by people who aren’t married.” In addition, Hispanic growth in several areas, continues to be very strong.

Developers must remain flexible at all points in a center’s life, even during construction, said William J. Garvey, former executive vice president of Simon Property Group. Simon’s new Coconut Point, for instance, a 1.2 million-square-foot open-air center in Bonita Springs, Fla., was originally designed to be fully upscale. It ended up signing a diverse mix of mainstream and fashion shops. “It wasn’t what we set out to build,” Garvey said.

Retailers shouldn’t be afraid to deviate from their prototypes in eclectic markets, said Gilliam. Bloomingdale’s new store in New York City’s SoHo includes numerous quirky, high-end items and fashions from up-and-coming designers.

Teen-agers, once shunned by retailers as a nuisance, “are a huge influence” and will continue to be so, said Tindall.

“They have an incredible amount of disposable income,” Lindsey added. “They’re wearing Tiffany necklaces and earrings. ‘Sevens’ brand jeans, which are $126 a pair, are [giving way] to another line they’re paying $150 to $175 a pair for.”