California Centers

SEP 2017

California Centers Magazine serves retailers, developers, shopping center owners, investment sales brokers and tenant representation firms throughout the state of California.

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40 California Centers Magazine | September 2017 C C Pine Creek also partners with ten- ants to create and cross-promote cu- rated events, such as the Seafood Roadshow Raley's hosted in mid-Au- gust, or the Jammin' at Pine Creek summer concert that included a string quartet and a Jamba Juice stand that raised money for a local animal shelter. The firm also offers Wifi at some of its centers, which can capture basic consumer data and contact lists that may be beneficial to Pine Creek's tenants. Grochocinski believes this is just the beginning of the new landlord-tenant partnership — one that will be crucial to all parties involved at various stag- es within the brick and mortar game. "It may sound obvious, but the first challenge is getting landlords to acknowledge the changing retail en- vironment and see how they can ad- just their shopping centers' marketing strategies to correspond with these new digitally integrated omnichannel experiences," he says. "Shopping cen- ter landlords have not had much ex- perience with traffic-driven programs and partnerships with their retail ten- ants. That is slowly changing." Famous also believes today's suc- cessful landlords will have to accept the level of change and flexibility re- quired of retailers if they are to remain as nimble, convenient and coopera- tive to the consumer as possible. This means fostering growth in all areas of the business, including online, mobile apps, extended warehouse and distri- bution space and buy online, pick up in store models. "Owners will need to accommo- date the changes their retailers must make," he says. "This means allowing retailers to adapt to trends and chang- es in consumer tastes. These compa- nies really are pushing traditional brick-and-mortar players to focus on store experience." For landlords, this could mean shorter lease terms or tenant improve- ments that can be quickly executed at minimal costs. It could also turn some retail stores into showrooms as consumers opt to interact with items before buying online. This, in turn, could translate into less stock on hand and a more curated, visually pleasing display that can be experienced in a warm, welcoming in-store environ- ment. Changes to the physical store, point of sale and delivery method can also blur the lines regarding where the sale was made. Famous believes this may lead landlords to reconsider lease ne- gotiations based solely on a store's sales figures and traffic counts. "Many companies, including some online players, are really pushing traditional brick-and-mortar loca- tions to focus on store experience," he explains. "They can be much more focused on providing spaces to expe- rience the products rather than just a venue for purchasing them. In that sense, they devote less space to inven- tory and more to experience, with the ultimate goal of creating a seamless experience regardless of the channel." This is a term Grochocinski calls "channel-agnostic." "Landlords would be wise to study the channel-agnostic strategy that omnichannel marketing represents," he says. "They can begin by helping to promote the center and its tenants as a part of the shopping journey, but realizing that this is not the only part of the journey. The key to a successful omnichannel marketing program is re- alizing that sales channels are now a thing of the past in a consumer's eye. It makes no difference to them if they bought the product online, in-store or through any combination of multiple channels through their own research — they just see themselves as interact- ing with the brand." Those who haven't wised up to it yet, or who have yet to connect the dots between fulfillment, distribution and in-store retail, needn't panic. It's precisely these needs that have in- spired CBRE, Cushman & Wakefield and other firms to evolve their own businesses in the hopes of evolving those of the shopping center owners and tenants. "Today's consumers want perfec- tion in the form of both flawless exe- cution of online orders and memora- ble in-store environments," Famous says. "And they want it immediately. Retailers' e-commerce execution must be fast, and their in-store experiences must be fully conceived and imple- mented. To achieve this, a retailer's real estate must be perfect. The way to best serve retailers who are striving to build an interwoven, omnichannel network of real estate and services is to assemble a team capable of advising them on any need for their omnichan- nel growth. We find that retailers pre- fer to work with a single service pro- vider that can offer the broadest suite of advisory services that result in turn- key solutions during this challenging transformation." The transformation may be chal- lenging, but these firms strongly be- lieve the multi-disciplinary efforts will be worth it as we stand on the cusp of an exciting world where everything is literally at our fingertips. CC While Pine Creek shopping center in Grass Valley serves a small trade area, it still has a relatively online following.

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