LOS ANGELES — The four F’s may need to move over: there’s a new consonant in town.
While fun, food, fitness and fashion are still category staples in shopping centers, retailers at ICSC’s Western Conference & Deal Making event, held Sept. 16 to 18 at the Los Angeles Convention Center, are now interested in courting the two L’s: laptops and lattes.
“We do really well with the laptops and lattes crowd,” said Felicia Alexander, a Health & Wellness panelist and co-founder and co-owner of BoxUnion boxing studio. “We look at daytime population, but residential density is also really important to us.”
Alexander’s sentiments were reiterated throughout the three-day conference as retailers began to prioritize what the customer is lacking above what they’re selling.
“Shopping center owners and retailers alike are forced to acknowledge that time has become consumers’ most
Dan Villalpando, partner, Cox, Castle & Nicholson
important commodity, even perhaps more so than money,” said Dan Villalpando, attendee and partner at Cox, Castle & Nicholson. “Getting the consumer to part with their time has become paramount to the success of a shopping center.”
Putting Time On Your Side
For BoxUnion, prioritizing a member’s time means keeping the workout to 45 minutes, publishing extremely detailed instructions on parking on its website, and seeking out locations where consumers have already established their presence.
The company’s Robertson Boulevard location in Los Angeles is near Starbucks, the Ivy, Lemonade and the Beverly Center. BoxUnion Santa Monica is surrounded by hotels with large, pleasant public spaces like Loews, JW Marriott and the Viceroy, in addition to Cora’s Coffee Shoppe, a Tesla charging station and an additional electric vehicle charging station.
Villalpando believes these sorts of amenities — whether offered by the tenants themselves or within the surrounding area — will be of utmost importance in the new retail environment. Consumers have more options than ever when it comes to how, where and when they spend their time and money.
“Can the customer find parking quickly?” he posed. “Can they access the internet while onsite to comparison shop? Can they navigate the shopping center quickly and efficiently? Can they charge their electric vehicles while shopping? Can they pay for parking and exit the shopping center without much delay? Is there a concierge available to answer questions and direct the customer? All of these are questions that the developer and retailer must answer to address the time crunch shoppers face.”
Speakers on the Experiential Retail panel included, from left, moderator Kyle Kavanaugh, president, Main + Main Inc.; Allison Samek, CEO, Fred Segal; Tony Sekora, director of real estate development, Nordstrom Local.
Tony Sekora, an Experiential Retail panelist and director of real estate development at Nordstrom Local, took this time task to heart when the department store decided to create an urban, merchandise-free concept. Nordstrom Local specializes in services, including online pickups and returns, express alterations and stylists who can curate a wardrobe.
“The idea is it’s quick, it’s convenient,” Sekora said. “The stores are very simple, very clean and intimate. The transaction is fast. If it’s going to be successful, it’s going to be because it’s convenient.”
Sekora noted the inspiration for Nordstrom Local came from meeting the consumer where they are. Today, they are busy moms, working professionals and telecommuters who like the option to buy online, but realize there will be some trial and error with their orders as they try to determine the right size, color and style for each item.
That’s where the ecommerce platform can go awry, Sekora said. The time it takes to repackage, print a label and get to a postal stop is time these consumers just don’t have — or aren’t willing to spend. The full-size Nordstrom stores also accept online returns, but that trip still has to be worked into their monthly schedule.
For residents in dense, urban and traffic-jammed areas like Los Angeles and New York, this return process is the opposite of experiential. It isn’t a walk in the park for Nordstrom, either.
“It is critical for us to get the merchandise that is sitting in a closet, waiting for the consumer to be in that neighborhood with a Nordstrom to return it,” Sekora continued. “With Nordstrom Local, we get returns in Los Angeles an average of eight days faster than we do in areas that don’t have a Local. This is about taking the friction out of the transaction.”
Nordstrom Local currently has three stores in Los Angeles and two in New York. Like BoxUnion, these outposts are integrated into Main Street retail districts with multiple restaurants, coffee shops and surrounding residential.
“Now, Nordstrom Local is next to your coffee shop, your yoga studio,” Sekora said. “It’s quick, it’s seamless and, because it’s not a hassle, it becomes part of their traffic pattern.”
When You Have to Let Them Linger
Part of attracting today’s consumers involves getting them in and out of an establishment as fast as possible so they can move on with their day. Then, there’s the exact opposite approach.
Panelsts on the Health and Wellness Panel at ICSC Western Conference & Deal Making were, from left, moderator Jennifer Wight, director, leasing, Irvine Company Retail Properties; Felicia Alexander, co-founder and co-owner, BoxUnion; Brittany Driscoll, co-founder and CEO, Squeeze; Greg Gish, president and CFO, FaceHaus.
Some shopping centers and retailers don’t want tenants to close their laptops or finish their lattes before meandering over to their locations. They prefer them to sip, type and do whatever else fills their days right from their premises.
“We’re trying to make our restaurants a place where people want to bring their laptops,” said Zach Pagel, Retailer Runway presenter and the national real estate representative for the Pacific Southwest region of McDonald’s. “We want you to use our Wifi, have a cup of coffee. We’re integrating a lot of tech and updating our stores with a sleek, modern design to deliver something we call the experience of the future.”
The experience of the future may, in fact, involve being many things to many people. Allison Samek, Experiential Retail panelist and CEO of clothing store Fred Segal, can attest to this.
“Experiential retail today is about creating an environment where you actually forget you’re completing a transaction,” she said. “We want to extend the day. A [visit to] Fred Segal could be three hours. Have coffee, shop, have lunch, dinner, attend a panel, stay for a concert. We wanted shoppers to have the option for their stay to go into the evening.”
With this in mind, Fred Segal’s 21,000-square-foot flagship store on Sunset Boulevard in Los Angeles offers concierge services, live music, designer trunk shows and other events, in addition to the adjacent Fred Segal Café and Tesse Restaurant.
Andrew Van Tuyle, conference attendee and senior managing director of investments at BH Properties, thinks all-encompassing strategies like this play to a consumer’s inherent desire to stay put.
Andrew Van Tuyle, senior managing director of investments, BH Properties
“People’s tendencies are to stick around,” he said. “You almost have to build these mini cities. Incorporating more than one use is certainly a bigger part of the conversation today than it was five years ago. When you can do that and make it experiential, that’s a very important part of the customer journey.”
Co-working spaces have also become an integral part of many shopping centers as landlords look to further the live-work-play connection with consumers. The number of co-working outposts is estimated to grow by 42 percent by 2022, according to Emergent Research. The number of co-working spaces in retail centers is expected to grow by 25 percent through 2023, totaling 3.4 million square feet of space.
The trend has gotten so popular, in fact, that niche co-working spaces have begun popping up. This includes everything from all-female spaces to those that target professionals in the technology, creative, health and wellness, construction, cannabis and eco-friendly sectors.
Leslie Fox, senior vice president of membership and strategy at ICSC, moderated the Coworking Craze panel with two women who run female- and parent-focused co-working enterprises. Dori Howard, co-CEO of the Jane Club, confirmed what both she and other working moms face as they try to achieve a balanced life.
“We’re trying to create more space in our lives,” she said. “We’re trying to build a community where you can sit down, answer emails, pay bills or run a multi-million-dollar company. Our core value is to honor all work. You don’t want to abandon home life while your career is flourishing.”
Speakers on the Coworking Craze panel included, from left, moderator Leslie Fox, senior vice president of membership and strategy, ICSC; Dori Howard, co-CEO, The Jane Club; Danielle Hill, chief operating officer, The Riveter.
For that reason, Howard integrated the Nest, an on-site childcare space, in addition to complimentary amenities like meditations, mentorships, social events, a concierge, and access to a private space for meetings and phone calls. The Jane Club also brings in vendors that offer blowouts, manicures, pedicures, car washes and enrichment classes, including Spanish and wine courses, for an extra fee.
Though Howard said she preferred locations near drugstores and fitness studios, she admitted co-tenants didn’t turn out to be as big of a factor as one might expect.
“We’re walking distance from a Flywheel [spin studio] and a Rite Aid, but everyone here uses Postmates,” she said. “Our members don’t leave. We’re mindful of our co-tenants in terms of foot traffic but, in reality, they’re not leaving.”
Whether a retailer’s goal is to get the customer to leave as soon as possible, or to have them stay until closing, retailers have very little choice in today’s tech-driven world. The consumer will evaluate his or her options, including their time and monetary budgets, before determining if they will frequent an establishment and for how long. Clearly, the industry is preparing for that.
— Nellie Day