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The Urgency of Now for Department Stores

Despite some experts’ lagging real estate worries, the future for shopping centers is bright. For the past fifteen years the department store anchor has been all but pushed aside. That, amidst the great debate about new and varying types of tenants that should be recruited to struggling shopping centers, the time is now for department stores to be, again, the icons of the retail centers shopping experience.

But look closer: department stores have become some of the most innovative retailers in the mix and are setting new standards for the industry at large. With improved sales in the double digits from the previous several years these big boxes are proving to be real estate jewels. Using a successful blend of in-store technology, mobile apps, social media, and localized promotions, department stores are becoming more relevant to younger generations. Value-driven product lines, exclusive store brands, and youthful fashion-forward consumer trends are driving department stores to be hip again. Regional malls, lifestyle centers and power centers need to bring back these anchors that complement their smaller specialty retail tenants, respond to the needs of the value-conscious consumer, and create a diverse offering of national and local stores, restaurants and entertainment.

This may well be the future model of success for retail shopping center developments. Some of the biggest trends and opportunities that are guiding this return to growth and vitality include:

  1. Urbanization: department stores are developing smaller, denser footprints that fit within urban retail developments and connect with the community core.
  2. Regionalization: department stores are creating promotional platforms and design elements that respond to regional characteristics and local consumer needs.
  3. Repositioning: department stores are updating their brands through their buildings – for example, re-skinning big box facades to create a greater sense of place.
  4. Hybridization: retail centers are combining interior and exterior-facing retail with department store anchors and detached big box retail. Together, these provide an indoor shopping experience linked with an outdoor “place” that has amenities such as pathways and seating, restaurants, entertainment and open public space. Together these components create a sense of community that prevails along with commerce.

Gensler has been working with major department stores to take advantage of this new trajectory. My colleague Jill Wheeler and I hosted a roundtable discussion on this topic at this week’s ICSC ReCon in Las Vegas. Join the conversation. This is where the urgency of now meets the innovation of tomorrow.

Kyle is a retail design director in Gensler’s Dallas office. He has been engaged in retail design for 20 years and is still fascinated by the dynamic energy and speed that the retail industry possesses. Kyle believes that the power of design in retail environments is the most accessible, influential and impactful in today’s culture. When he isn’t working on the next big consumer experience, he spends time with his wife and six children trying to figure out “what’s for dinner?” Contact him at kyle_jeffery@gensler.com.

Reader Comments (1)

I really enjoyed this post. You describe this topic very well. I really enjoy reading your blog and I will definitely bookmark it! Keep up the interesting posts!

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