As I convalesced at home with Wolfgang Puck’s free-range chicken noodle soup, I thought I'd take the time and write a few words about the Urban Land Institute (ULI) meeting I attended with Simon Hill from MapQuest. [Simon Hill was the project manager for Vibe, a product later incorporated into MapQuest local]
The meeting took place in the still-vacant space that housed Wolfgang Puck’s Denver restaurant. It was an appropriate venue as the topic of the panel discussion was ‘Reinventing Retail.’ Wolfgang’s space might be keeping potential tenants away with its outdated 80s geometric décor put in place by Puck’s ex-wife, but the rest of the Pavilions shopping center has been a success story since Gart properties invested $10M remodeling it in 2009. Previous tenants like Forever 21 have rented extra floor space and new tenants are seeing record sales: the new H&M store is the 4th in terms of sales out of more than 200 North American stores.
The ULI promotes downtown and old neighborhood redevelopment, and pushes forward new ideas about urban design, affordable housing and growth management, all from a private sector perspective. The local chapters count among their members real estate developers, architects, and local government employees.
Carol Nielsen began the panel presentations with a graph of historical retail trends, an S-shaped curve with a peak in 2004 and 2005, and a valley in 2008 and 2009. She works for Target doing research on where to locate new stores. As a result of the recession, Target couldn’t continue the pace at which it was opening large suburban locations, and instead had to focus on remodeling existing stores, and coming up with smaller urban versions like “City Target.” Walmart is pursuing a similar strategy with new “Express” versions of their stores.
I find this a very exciting trend, as the “fun-sized” version of Target or Walmart could easily take over vacant buildings or empty urban lots, helping fill in gap-toothed American downtowns.
Allen Ginsborg also highlighted the trend of shrinking big box stores and opening mini stores, and emphasized that this was a reaction to competition with streamlined e-commerce operations: the physical stores have to offer more than just retail. Ginsborg co-owns 9 million sq. ft. of retail space in CA, IL and CO, and he recently bought the Twin Peaks Mall in Longmont for a song at $8M. He’s working with the local community and with designers to come up with a more-than-retail concept.
I see this trend of ‘repositioning’ malls very promising, where developers take over a dated, failing strip mall, and in addition to retail, they create mixed-use spaces by adding residential units and bringing in atypical tenants like community colleges, doctors’ clinics and art studios.
Simon introduced MQVibe next, and he contextualized it as the online solution to getting people back to brick and mortar stores. He pointed out that Vibe is not about sending users to 5-star restaurants, but about creating a 5-star going-out experience, which is utterly different than the deracinated clutter of reviews that other sites offer. The real estate people in the audience found the local connections with merchants and the distribution of local deals attractive, while the city council people were intrigued by the possibility of connecting with neighborhood development groups. Credit goes to Simon for a very spirited introduction to Vibe and for successfully dodging questions about psychographics.
To review the trends pointed out:
-big box stores opening up small urban versions of their stores
-existing failing malls being reborn with mixed-use
-brick and mortar stores creating a unique experience to compete with online retailers
-brick and mortar store just becoming showrooms