Shopping is an activity as ancient as civilization itself. From the Greek Agora and Roman Forum to the Temples and Bazaars of the East, the marketplace has played an integral role in the social, civic and economic vibrancy of communities since the beginning of time.
A testament to American consumerism, the shopping center has shown resilience since the 1920s, with the rise of the nation’s first strip centers. Over the next two decades, living in the suburbs became popular and the regional mall was born. In the 1980s, 16,000 shopping centers were built and the World Wide Web was created, forming the catalyst for the omni-channel retail model that we now have today.
This past decade, the retail real estate industry has undergone a profound transformation. We have seen the industry rebound from the Great Recession and enter a state of stabilization and innovation. Today, with 93% of retail sales taking place at brick-and-mortar stores and a shopping center occupancy rate of 93.5% (the highest quarterly reading since 2008), it’s clear that the industry is quite healthy.
How has the industry maintained such strength? As society and technology evolve, so too has the shopping center. The industry has embraced convergence between the physical and digital worlds, with the brick-and-mortar locations remaining at the epicenter of the omni-channel experience. The rapid rise of technology and e-commerce has presented an opportunity for the retail real estate industry to deliver an integrated experience across platforms and it’s taking full advantage.
Centers have reevaluated their value proposition by placing experience and convenience at the forefront. Developers are incorporating “retail-tainment” options like artisanal food courts and upscale eateries, fitness facilities and event space, which further cement centers’ role as the social hub for their communities. Properties are enhancing their tenant mix to include not only retail, but also residential and office space and even medical facilities. Services include complimentary Wi-Fi, same-day delivery and concierge programs.
Retailers are embracing innovation as well. Gone are the days of waiting in line to pay, stock rooms running out of inventory and needing cash to buy goods. There are a variety of new touch points at retailers’ disposal, including RFID, beacons, interactive displays and big data, being used to digitize and personalize the consumer’s shopping experience.
Whether buying in-store, online, or utilizing click and collect, one thing is certain–shoppers want their merchandise as quickly and conveniently as possible. With more resources at their fingertips than ever before, consumers are savvier than ever before. Retailers are developing multiple point-of-sales (POS) checkpoints and optimizing their supply chains to deliver products from any point where consumers want to buy them. A strategic alignment between technology and real estate is allowing developers to close the gap between e-commerce and traditional distribution networks, helping solve the “last mile” equation. The end result: minimized fulfillment costs with maximized customer satisfaction.
While technology will continue to play a major role, let us not forget that as the industry progresses to meet certain consumer needs, there remains an inherently social aspect of shopping. Social interaction, immediate gratification and the ability to touch, feel and try products are just a few benefits that cannot be replicated online.
Unlike any other “place,” shopping centers are built around the needs of communities, while building value at the same time. They provide a central place to congregate with friends and are significant job creators, drivers of GDP and critical revenue sources for the communities they serve through the generation of sales taxes and the payment of property taxes that fund important municipal services. Shopping centers will continue to evolve to meet the needs of the ever-changing consumer, and they will continue to thrive for many years to come.
About ICSC
Founded in 1957, ICSC is the global trade association of the shopping center industry. Its more than 70,000 members in over 100 countries include shopping center owners, developers, managers, investors, retailers, brokers, academics, and public officials. The shopping center industry is essential to economic development and opportunity. They are a significant job creator, driver of GDP, and critical revenue source for the communities they serve through the generation of sales taxes and the payment of property taxes. These taxes fund important municipal services like firefighters, police officers, school services, and infrastructure like roadways and parks. Shopping centers aren’t only fiscal engines however; they are integral to the social fabric of their communities by providing a central place to congregate with friends and family, discuss community matters, and participate in and encourage philanthropic endeavors. For more information about ICSC visit www.icsc.org and for the latest news from ICSC and the industry go to www.thecenterofshopping.com.
