Posted on January 12, 2010 by Scott Kadish
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Recently, David Birdsall, Chief Development Officer for Phillips Edison, spoke to a group of real estate industry executives about the state of the retail industry and its impact on retail real estate. Dave believes we are at the dawn of a new/old retail era. Dave showed how the internet is changing how consumers shop and will continue to evolve to present easier and perhaps more desirable shopping experiences for consumers. We have already seen retailers changing their strategy to have one or two stores in a market at the top locations with the internet covering the rest, instead of trying to "store" the entire market. Dave says successful retail will instead be "experience" driven. Shoppers will come to a retailer or a shopping center for the experience. Thus, restaurants may become the new anchor. Authentic, local, family owned retailers may have a new special appeal. Retailers will not be looking at mass openings but will concentrate on improving existing operations. New developments will be scarce. Existing "distressed" centers may need to be redeveloped for other uses. And successful retailers and landlords will be those who are really good operators - not just good financiers.
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Interesting thoughts. That certainly would be a sea change from the way retail has developed over the last decade. I like the idea of more local retailers, but I think these changes will be mitigated by the "experience" factor that you mention.