Recently Michael Braun, President of Grit Development attended the annual ICSC RECon in Las Vegas. It is the global convention for the shopping center industry and provides networking, deal making and educational opportunities for retail real estate professionals from around the world. This year there were over 37,000 attendees and 1,200 exhibitors it is the largest industry convention. 

We thought you would like to hear his thoughts and read some of his notes surrounding the event. 

Today, destination trends are beamed into every home via apps like Instagram or countless travel television shows.  Travel, fashion, and food blogs broadcast up-to-the-minute information on trends, and a legion of apps—from Travel and Leisure to countless others—have put powerful mobile tools in every visitors pocket.

  • We are moving away from buying stuff
  • We are becoming an Experience Economy, a Participating Economy
  • Retail spaces will be living spaces -Social Hubs
  • Grocery & Dinner Restaurants key components
  • Retailers must become primary educational and social hubs to remain relevant
  • Experience or Click
  • Apple is a social experience and everyone is following
  • Amazon is ahead regarding logistics cutting out the middle man
  • Do not even try to compete with Amazon – you will lose
  • If it does not work on your phone – forget it
  • Retailers and Landlords together must create experiences & services combined – mixture of offerings – otherwise your Product and Center will be “Amazoned” becoming obsolete.

Key Take Aways – Various Meetings

  • Never before have CEO’s focused on presidential policies as this year, Trump could be very disruptive for the consumer and the retail environment.
  • Things are still good, the environment is stable.
  • Palm Springs is hip and “cool” becoming the playground for brand ambassadors driven largely by its ever thriving tourist industry.
  • Luxury and Value (discount) are in demand and winning. As the middle class tier retailers are struggling to find its identity and to compete with the Internet.
  • The growing wealth of the nations 1% keeps driving the LVMN, Hermes and other luxury retailers
  • The middle class is shrinking and so are the mid tier retailer and mom and pop shops
  • The anchor store is dying, malls are reinventing themselves
  • Data is key for everyone
  • The next 3 years 25% of existing retailers will be in financial distress and be replaced, a big challenge for landlords
  • We will continue to see more conventional stores closing, however we will simultaneously see unconventional stores opening.
  • Marketing budgets are being redistributed toward brand ambassadors posting on Instagram, Facebook and TripAdvisor.
  • CAPEX Investment in Technology vs Store Expansion
  • Today’s consumer want to hear the TRUTH from their peers, they are no longer interested in the marketing pitch
  • The Future for Brick and Motar looks bright: Do not compete with the Internet & Amazon; embrace it to your advantage
  • The impulse buyer is no longer driving the retail industry
  • Retail Experience is driving consumer behavior
  • Amazonation of Retail has begun
  • Shopping centers are becoming Destinations, Places to socialize and experience
  • Brick and Mortar needs to focus on items the Internet can not provide
  • In 2017/18 more than 50% of shopping center destinations visitors will come to eat, not to shop
  • Food uses that bring people in and give them multiple reasons to shop are KEY
  • Big Box is dead, landlords must build appealing buildings consumer want to enter to create premium experiences.
  • Tenants will have to invest more money in their showrooms and they ask landlords contribute
  • The face of Retail will change in the next 5 years in more ways than in the past 50 years
  • Internet
  • Value driven Consumer
  • Experience driven Consumer (Millenniums) / Baby Boomers
  • Destinations Experiences
  • Hospitality – interestingly a lot ofpeople call for the “death” of the limited service Hotel expansions, unless it’s Motel 6 or Holiday Express, most Brands will disappear as only the low end value driven segment and or the Luxery high End Segment will thrive and it is no different in the retail or restaurant business. Value or Experience.