The mall is dead. Long live the mall. That is the main message of The Future of Shopping Centers, a study released this week by A.T. Kearney that identifies key trends in retail real estate and how customer demographics and attitudes are changing 21st-century commerce. The study analyzes the global impact of e-commerce on physical retail, and suggests several ways forward for retail real estate operators. The research behind The Future of Shopping Centers points to a shift from traditional shopping centers and malls to re-envisioned, multifaceted consumer engagement centers, or CESs.
“In the future, retail-based real estate will be environments where people gather to engage with friends, connect with like-minded shoppers, seek out unique experiences, reaffirm values, and interactively relate to brands on a personal level,” says Michael Brown, A.T. Kearney partner and author of the study. “Innovative retailers, center operators, and technologists are already redefining the ‘art of the possible’ on a daily basis around the world.”
Diverging from the tales of a “retail apocalypse” filling business journals, The Future of Shopping Centers envisions a renaissance of physical retail in America, as shopping centers transform in response to consumer shifts and technology. The study offers an outline and commentary on several different models of how this may happen, from destination and value-based centers to innovation centers and “retaildential” space.
“It’s important to remember that while the pace has slowed a bit, retailers are still opening new stores every year,” Brown notes. “The future of retail real estate is as robust as the industry’s imagination. That said, for operators of these new centers, future success depends to a large degree on being able to “unlearn” the lessons of the past. Tomorrow’s success will belong to those operators and tenants willing to break from yesterday’s patterns and practices and fully embrace a consumer-driven future.”
Against a research backdrop of the history of shopping centers and consumer demographics, the study points out that, globally, these new consumer engagement centers (CESs) have begun to emerge in countries where limits are placed on the ratio of retail space to people, and where private vehicular travel is far less common than in the US.
“The industry’s future potential rests on the ability of operators and retailers to reinvent the rules of an ever-changing game. Where 20th-century malls and shopping centers grew through ‘push,’ these new engagement centers will be organized around consumer ‘pull,'” Brown adds, “and leading retail real estate operators and brands will benefit from the research and analysis of this phenomenon, as well as from the lessons learned from e-commerce.”