The ICSC Blog

July 25, 2014

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Q&A with Retail Prophet’s Doug Stephens

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Interview conducted by Michael Lagazo  

Doug Stephens is one of the world’s foremost retail industry futurists. His intellectual work and thinking have influenced many of North America’s best-known retailers, agencies and brands including Walmart, Home Depot, Disney, Microsoft, WestJet, Citibank, Razorfish, Intel and WestJet. In 2013 Doug was voted one of retail’s top global influencers by Vend.com.

Prior to founding Retail Prophet, Doug spent over 20 years in the retail industry, holding senior international roles including the leadership of one of New York City’s most historic retail chains.  Doug is the author of the groundbreaking book, The Retail Revival: Re-Imagining Business for the New Age of Consumerism. He is also the consumer technology contributor on the acclaimed international television series App Central, as well as the retail contributor for CBC Radio. Doug also co-hosts the popular web series, The Future In Store and sits on the advisory board of the Dx3 Digital Conference.

His unique perspectives on retailing, business and consumer behavior have been featured in many of the world’s leading publications and media outlets including The New York Times, Bloomberg Business News, TechCrunch, The Financial Times, The Wall Street Journal and Fast Company.

“In the new age of consumerism, the world is your store.” –Doug Stephens

Q: What inspired you to start Retail Prophet?
A: Having spent over 20 years in retail in both Canada and the U.S. two things occurred to me; the first was that retail (as an industry) tended to be terribly short sighted in its outlook – often not looking out much farther than the next quarter. Secondly, I felt that we were entering a period of unprecedented change across economics, demographics, technology and media and that unless retailers began embracing a more forward looking attitude, many would be at risk. That was almost 6 years ago and I think we’re now seeing the fall out among industry players that failed to assess market changes and adapt.

Q: How is business this year?
A: Our business in North America continues to grow year on year and we’re now also increasingly working in Latin America, the Middle East, Asia Pacific, Europe and Scandinavia. The world is indeed becoming a smaller place all the time.

Q: What percentage of your work is in Canada and how much is in the U.S.?
I do about 30 percent of my work in Canada and about 40 to 50 percent in the U.S.

Q: In your book, The Retail Revival, you talk about ‘transporting buying opportunities to consumers where they may be…’ How does a physical store maintain relevance when a path to purchase is progressively bypassing the store?
A: The value of physical retail stores isn’t disappearing but it’s definitely transforming. 25 years ago, in many cases, the only way to get certain products was by visiting a store. Stores were distribution vehicles first and foremost. But today, in a world where we can order anything we want and have it delivered in as little as an hour, we increasingly won’t rely solely on stores for distribution. Therefore, stores need to move from simply distributing products to distributing remarkable branded experiences. They need to focus primarily on creating such a powerful and galvanizing shopping experience that it creates a permanent emotional and cognitive bond with the customer. Then, regardless of which shopping medium the customer chooses, the hope is that the imprint extraordinary experience will prompt them to buy from your brand instead of someone else’s.

Q: Mainstream shopping center rhetoric says malls are dead. Would you like to offer a counterpoint?
A: Virtually every form of retail that has ever existed exists today. The only thing that changes are the forms that happen to be dominant at the time. For many years the downtown department store ruled, then the suburban mall, which gave ground to the the big box power center model, which is now succumbing to ecommerce. Ultimately though, the strongest in each format survive. Malls will be no different. We will see (and area already seeing) some malls completely reinvent themselves into really outstanding food, entertainment, lifestyle and shopping centers. But successfully navigating this transition will also involve adopting a new perspective on how malls are planned, built, infused with technology, tenanted, operated and measured. Most won’t make the necessary shift. So, I doubt we’ll have nearly as many malls as we do today but the ones that remain will likely be quite extraordinary.

There is also an important transition taking place between major cities and their suburbs. Many major North American cities now experiencing greater levels of growth, wealth, income and even safety than their neighboring suburbs. This is a sharp reversal of a long-running trend and one that will likely result in more “malls” being woven into the landscape of urban centers.

Q: Brick-and-mortar stores give shoppers a sense of place as well as brand immersion while mobile and ecommerce engage a hyper-connected consumer at their moment of need. What does the intersection of these two retail environments look like?
A: I firmly believe that over the next five to ten years we’ll see digital commerce become much more immersive and tactile while in-store shopping will become more digitally integrated. The intersection is what I call “Phygital” retailing – an entirely new form of retail. For example, look at the potential for wearable computing like Google Glass combined with augmented reality to create a digital overlay in the retail environment that can be completely personalized and unique to a given shopper. Coupons, offers and recommendations are tailored to my preferences. In addition, while we’re shopping in a store we may be able to see the not only products that are physically on the shelf, but also virtual products sitting next to them that can be seamlessly ordered for delivery while standing at the shelf.

Likewise, I envision technologies akin to the recently acquired Oculus Rift, virtual reality headgear, eventually giving us the ability to shop in any store in the world without leaving our home – to actually walk the aisles of stores along the Champs-Élysées, for example, and even interact with store staff.

Are these online, mobile or physical experiences? Who knows? And more importantly, does it really matter?

Q: You wrote about redesigning stores to deliver high octane experiences in your blog post, “The Future of Retail: Experiences Per Square Foot.” How should retailers measure store productivity and how do these metrics affect the square footage required?
A: I find it somewhat curious that we measure the productivity of a retail store today much the way we did at the turn of the 20th Century. Sales and profit per square foot, per hour, per associate etc. But when online is taking a bigger and bigger chunk of sales each year, this can only result in a viscous spiral of downsizing, which I think we’re seeing. Some brands are simply allowing their stores to downsize to the extent that there’s no remaining opportunity to create a store experience.

Meanwhile we’ve got a new arsenal of analytic tools that enable us to measure the physical environment much more the way we glean great analytics from web sites. Bounce rates (how many people enter and leave immediately), time on site, path of navigation, cart abandonment, demographics etc. are all measurable now in-store!

So, if we agree that the store needs to deliver an experience and that shoppers are shopping across multiple channels, then we simply can’t measure stores the way we did 200 years ago. We have to use a new set of analytics to measure the execution and value of the store experience.
In other words, don’t simply downsize the store and hope for better results. Right-size the experience and measure the results.

Q: In your web series with Amber Mac, ‘The Future in Store’, you talked about solutions, like NOMi, which track customer movements in the store.
Some people think this level of personal data capture is creepy. A creepy experience leads to a creepy brand. How can retailers deliver intensely personal, contextualized digital experiences to customers without creeping them out?
A: If you’d told my great grandfather that a satellite could track his physical whereabouts within a few feet and guide him wherever he wanted to go or that people could be beamed into his living room inside an electrified box, he probably would have been pretty creeped out by that too. History shows that we’re often initially uncomfortable with new technology until, that is, the obvious benefits of the technology outweigh that discomfort. We’re in the very early stages with many of these technologies, like location-based services for example, where the benefits simply haven’t yet been fully realized. Right now, all the privacy infractions, mobile tracking, push notifications and ad retargeting haven’t really delivered much real, tangible benefit to us as consumers. If and when it does, we’ll be far more likely to embrace it.

Q: If you could learn one thing about shoppers, what would it be?
A: What they all want so I could sell it to them! Seriously though… I can’t wait until neuroscience is better able to map the chemical responses in the human brain when we’re having a great shopping experience and what sorts of specific external inputs actually cause those responses. I guess you could call it the biology of being remarkable!

Q: Where would you like to see Retail Prophet in the next five years?
A: I have never been more fascinated, fueled and delighted with my work than I am right now. I have the privilege of meeting and working with tremendously bright, adventurous and talented organizations and people from all over the world. I really couldn’t ask for more than that!

July 24, 2014

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Bricks Beat Clicks for Back-to-School Shopping

2014 BTS
By Jesse Tron

Shopping in brick-and-mortar stores will be the overwhelmingly preferred method for consumers as they go about their back-to-school shopping this year. Discount stores are still expected to be the overall winners, grabbing a nearly 24 percent share of where consumers will shop. However, many retailers typically found in malls and open-air shopping centers such as office supply stores, department stores, electronic stores and apparel specialty stores will see increased activity as well. Apparel specialty stores were the biggest mover in terms of share, going from 8.4 percent in 2013 to 10 percent this year. Apparel in general is still the second most purchased item during the BTS shopping period – behind school or office supplies – but its popularity is growing this season; most likely a consequence of the rising impact of a “change in fashion trends” as a driver of BTS sales. The amount of consumers that listed this as a reason to increase their spending doubled from last year to 20% in 2014. While consumers typically view BTS merchandise as an essential expenditure, this indicates a strong move towards more discretionary purchases by consumers – a good omen for retail as we progress through the BTS season and into the holidays.

Additionally, consumers may be tiring of online shopping. The share of online as a BTS shopping venue will be 8.1% this year – a drop from last year’s 8.6%. Catalogues will comprise a 3% share. This means that brick-and-mortar retail in total will comprise almost a 90% share of BTS shopping. But showing the importance of omni-channel retailing, “webrooming” will be quite significant during the BTS season as 73% of consumers indicated that they will do research online, and then make their purchase in a physical store.

For more information, read ICSC’s Research Report on Back-to-School Shopping

July 24, 2014

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Q&A with MOCIAL Speaker Chad Rodriguez

ChadTell us about yourself….
I grew up in Florida taking my first real job there that brought me all over the world. Got a real taste for travel and eventually ended up in Sydney Australia where my focus in the retail world began. I’ve been living in NYC for the past 4 years working some incredible fashion brands and agencies. I’ve been raising my two children with my wife and I love it.

What is your favorite apps to use?
hmmmm – this is hard. I’m the guy that’ll try any app once. My goto is always Twitter, I love that platform. For productivity I’m a huge fan of Sunrise calendar, and for keeping my life organized I use Evernote for pretty much everything.

With society’s increasing dependence on technology, what changes in marketing strategies has it made in last few years?
I think it’s made marketing have to focus. The majority of marketing has always been about being as loud as possible to reach as broad range of people as possible. The new face of marketing is very specific about who it talks to. The best brands/retailers will realize how valuable tools like social and emerging technologies are at connecting with their customers. The age of being “loud” is over.

What have been the benefits of incorporating digital marketing and mobile apps into your corporation?
Well we’ve always been a mobile platform. We believe strongly that retailers/brands are wanting to own their space more and more. Our tech specifically really empowers the retailer/brand to understand what’s going on inside their space at a much more finite level, while being able to engage the customer with things they are genuinely interested in. It’s an exciting time to be a retailer.

In what ways has the digital age revitalized your industry?
I think it’s made things more personal. It doesn’t feel like spam anymore because as technology evolves it helps to make better decisions. The customer can only benefit from this. What it means is that more and more we won’t have to see things that are of little interest to us.

How important is consumer engagement? How do you bring attention to your brand through you social media channels/mobile apps?
Consumer engagement is everything. Just like culture, that if you aren’t building it then your employees or customers are going to fill the gap on their own. That can be a dangerous thing. It baffles me how few brands still don’t see the value in monologue. I think in most cases it’s fear that keeps most retailers from engaging, “what if I say the wrong thing?”. I think you have to just be okay knowing that in any relationship you’re going to sometimes say things that not everyone loves, but if you have a relationship the consumer won’t go anywhere. They’re more forgiving than we think, especially when they know we are having an open dialogue with them.

What do you hope participants will gain by attending your MOCIAL session?
That the time to act is now. That not knowing what to do, is a bad excuse. Technology has made it so easy to begin to interact with customers, and at some point you just have to start, even if you don’t fully understand it. My hope is that people will have their fears lifted a bit, and see that you don’t have to be some technology expert to use technology effectively to interact with customers.

Is the increasing number of online shoppers a concern to you?
Not at all – I think ecomm needs to be more careful of cannibalizing itself. It’s so easy to get into the ecomm space now. Anyone can throw up a site with some product. Amazon will continue to cannibalize anyone who is interesting (see zappos). I think we just need to accept that there are days where I want to shop from my couch and days where I feel like being in a store. Both are opportunities to connect with me as a consumer and to neglect either is a dangerous thing.

July 23, 2014

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Fendi Pops Up in Soho

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Luxury brand Fendi is stirring up interest in Soho, where it has opened a new pop-up shop on Greene Street. Although the Fendi flagship store is located in the city on Fifth Avenue, the pop-up is a fun way to attract customers in the bustling downtown area teeming with curious tourists and shoppers. The store will be open for the next six months, and each month will be revamped with a different theme and limited edition items.

This month’s theme is mini, with smaller handbag styles like the Petite 2jours and the Mini Peekaboo serving as the focal point of the displays. In addition to the mini handbags, the store is lined with electric blue carpeting, chic mannequins, fur and gold accents, vending machine displays, and light decorations highlighting the store’s social media hashtagged buzzwords like #fendisoho and #exclusive. The hashtags remind customers that Instagram and Twitter pictures of the store are welcome, and all are encouraged to photograph the pop-up and spread the word about the shop to their followers.

Next month’s theme will be personalization, allowing customers to focus on adding a unique twist to their bags, such as a monogram on the signature tag attached to the handle. It will be interesting to see how the store will change with the new themes over the next few months. For the latest information on the shop, check out Fendi’s Facebook and Twitter accounts.

July 22, 2014

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Win Free Registration for NY National Deal Making!

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Strap on your thinking cap, because it’s time for some trivia. Every Tuesday through the end of November, we will be posting a new question on Twitter about the city that never sleeps. To enter just respond to our tweet with the correct answer using the hashtag #NYConf and tagging @ICSC. The more questions you answer correctly the better chance you have!

We will be choosing one winner each month in August, September, October and November. Each correct answer gets you an entry, so the more questions you answer each month, the higher your chances of winning. Responses without the hashtag #NYConf will not be considered. The first question will be posted on our Twitter today. Start thinking, and check our Twitter page every week for the next question!

July 18, 2014

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Q&A with MOCIAL Speaker Jeff Gibb

Jeff GibbWhat are your favorite apps to use?
My apps fall into two categories – Ones that make my life easy/efficient (Google Maps, TripIt, Fitbit, Kindle), or Apps that entertain (Instagram, Hootsuite, Spotify, Swarm).

With society’s increasing dependence on technology, what changes in marketing strategies has it made in last few years?
You can talk about different channels, funnels or customer journeys, but the biggest advancement I’ve seen in marketing in the past few years is marketing in the moment. Technology is so pervasive these days, you need to reach customers when they are read to engage. That can be done through a mobile app, in social or even with a well timed email.

What have been the benefits of incorporating digital marketing and mobile apps into your corporation?
Speaking for our (Simply Measured) customers, deeper integration between digital marketing and mobile has made for a smoother experience for the customer. Many times, social can be the bridge between mobile and digital. A tweet can drive people to a mobile optimized site while a Facebook Ad can drive people to install a native App. Consumers have a choice in how they consume the offering.

In what ways has the digital age revitalized your industry?
(not sure this will be relevant as Simply Measured is a tech company providing social media analytics to brands, but I’m happy to provide an answer if it would be helpful)

How important is consumer engagement? How do you bring attention to your brand through you social media channels/mobile apps?
If I had to choose only one metric to measure success in social it would be engagement. Others like audience size, reach and impressions are important, but Engagement is the ultimate consumer action within social media.

What do you hope participants will gain by attending your MOCIAL session?
I hope that people walk away with a list of ways to improve social channels they are currently on, a list of new ones to try and confidence that data and measurement will guide their strategy moving forward.

Is the increasing number of online shoppers a concern to you?
I don’t think it’s a concern. I think it’s very interesting that Web Only ecommerce sites like Warby Parker and Bonobos have opened brick and mortar stores. Physical retail is still essential to the success of a brand.

July 17, 2014

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ICSC Research Summer Meeting

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ICSC’s research department hosted a summer meeting on Friday, July 11, with its North American Research Task Force (NARTF). The NARTF meets with the department twice a year and is involved in planning ICSC’s annual Research Conference. The conference will be held this year on September 28-30 in Denver, Colo.

In addition to discussing future directions for the department, meeting attendees also heard from Eric Hertz, senior staff vice president for education, ICSC, who discussed how industry researchers can benefit from ICSC’s extensive education programs. Later, they listened to presentations by David Green, vice chairman, brokerage, at Cushman & Wakefield, on New York City’s evolving urban retail landscape (especially on Fifth Avenue and Lower Manhattan), and by Dennis Cantalupo, chief operating officer of Creditntell, who analyzed store activity and company health for upscale retail.

Cantalupo described the reasoning behind the credit ratings he assigned to retailers, listed which companies fell along the rating spectrum, and discussed how well executives’ strategies were likely to improve their bottom lines in the future.

Green analyzed the factors underlying retail store development in the following areas, among others:

  • Lower Manhattan: As a result of massive capital infusion and a post-9/11 rebuilding effort, approximately 970,000 square feet of new, renovated and repurposed retail space is currently being marketed in this section of the city, with particularly noteworthy retail projects such as One World Trade Center, Brookfield Place (formerly known as the World Financial Center), the redevelopment of South Street Seaport as Pier 17, and the Fulton Transit Hub (which will include an estimated 65,000 square feet of new retail space). Retailers and developers are targeting an exploding residential population, office workers and tourists;
  • Fifth Avenue: Shoppers will see an influx of fast-fashion retailers, several of which are part of an influx of foreign companies who are establishing flagship stores as part of their effort to enter the U.S. market; and
  • Soho: Throughout much of the city, but especially in this area and the Meatpacking District, companies opening new stores face the challenge of adapting to retail use buildings that are protected by historical-landmark legislation.

The next North American Task Force meeting is scheduled for February 10-11, 2015, in El Paso, Texas.

For more information about how to join the North American Task Force, please contact Chris Gerlach, director of public policy research, ICSC, at cgerlach@icsc.org.

Other research task forces include:

European Research Group

Canadian Research Group

Mexican Research Group

Asia-Pacific Research Council

 

 

 

 

 

 

 

July 16, 2014

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Check Out Retailer of the Week, Reviver


When it comes to eating healthy, people always seem to be looking for the next big thing. Crazes like the paleo diet and cutting out gluten appeal to some dedicated dieters, but what about those who want normal food, just healthier? The solution lies in the concept adopted by Reviver, a new fast casual restaurant on 8thAvenue at 55th.

Focused on food that is both delicious enough to crave every day and healthy enough to eat every day, co-founders Todd Horowitz and Scott Leibfried are changing the healthy food restaurant game with a premise so simple it is almost outside the box. Everything on the menu is based on the principles that food should be balanced, nutritious, clean, and pure. This focus ensures that everything is fresh, unprocessed, and non-GMO. While most menu items contain meat, there are multiple vegetarian and vegan options, as well as dairy free and gluten free foods.

Reviver is planning to open further locations in New York City, with the possibility of further expansion in the future. For more information, check out Reviver’s official website.

July 15, 2014

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Michael A. Carroll, CEO, Brixmor Property Group Offers Advice to the Next Generation of Industry Leaders

Carroll_Michael-0010High-res.jpgBy: Veronica Polanco

As Millennials just getting started on our careers, we are the talk of the town. We are analyzed by research teams, targeted by advertisers and ultimately, expected to start careers and eventually make up the majority of the workforce. As we begin our jobs, the spotlight is on us. We’re nervous, enthusiastic, and unsure about what the future brings. As a result, we look for role models to inspire and guide us, or at best, rub off on us. We listen intently and crave advice, hoping that someone will give us the exact formula for success. By following the footsteps of a positive role model, we hope to grow professionally and one day become the mentors of the generation after us.

For the next generation of retail real estate professionals, Michael A. Carroll is an excellent example of a role model. With over twenty years of experience in the shopping industry he is a well-established retail real estate veteran.

Carroll received his undergraduate degree in business administration at Bowling Green State University (BGSU) in 1992 and his MBA from the University of Toledo. His first job was a leasing position at New Plan Excel Realty Trust, Inc. Carroll quickly showed leadership capabilities. In 2007, he became COO of the company, which had been acquired by Centro Properties Group US, and in 2009, he became CEO of Centro, which was rebranded as Brixmor Property Group in 2011. Brixmor Property Group owns 522 shopping centers, located in 38 states, and operates three regional and twelve local offices nationwide. Carroll balances his CEO position with his active membership as an ICSC Trustee and the Urban Land Institute. He also serves as the Director of the Bowling Green State University Foundation Board and has endowed a scholarship at BGSU for business majors.

Carroll’s success is one that may feel unattainable or intimidating to young people; yet Carroll is committed to helping and encouraging the next generation of retail real estate professionals. He will be the keynote speaker at ICSC’s upcoming Next Generation Conference in Philadelphia. In preparation for the event, Carroll took the time to offer some advice as well as give us a sneak peak as to what he will be discussing at the conference. When asked, What is one thing you know now that you wish you knew when you were first starting in the industry, Carroll encouraged young professionals to get a better accounting and finance background. When he first entered the industry, Carroll went back to business school because he realized he lacked knowledge in this area. Carroll also encouraged our generation to pursue different facets of retail real estate and emphasized that being well-rounded will put young people in “the best position.”

Carroll advises young professionals to look for roles in their first jobs, where there are increasing levels of responsibility. He believes that additional responsibilities lead to visibility and enhances overall professional development. According to Carroll, the best business advice he has ever received was to focus on maintaining a strong, solid reputation; a key factor in relationship building and career success.

“A reputation is earned by many acts, and lost by only one act,” Carroll said. He believes that a reputation is something to be thinking about all the time.

Carroll gave us a snapshot of what he will be focusing on at the conference. Some key topics will be the changes taking place in macro-retail, e-commerce and the lack of new development. He thinks the shortage of space will make industry professionals consider how we should use existing assets. When asked about the future of the shopping center industry, Carroll was extremely upbeat. He believes shopping centers will become more productive and omnichannel will become more advanced. Carroll is optimistic that the industry will establish a harmony with e-commerce.

In terms of the next generation’s role in the future, Carroll expressed, “I believe young people are the engines that drive business. It’s important to harness their energy.”Michael A. Carroll will speak at 1:45 PM at ICSC’s Next Generation Conference in Philadelphia on July 27-29.

 

 

 

July 11, 2014

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Congratulations to 5 more scholarship winners!

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All though schools are out for the Summer, the ICSC Foundation has been hard at work helping the next generation of industry leaders.  The ICSC Foundation is in the middle of a Capital Campaign to expand our scholarship program. Click the below links to learn more about our winners and more about each scholarship.

Winners of the Kieran P. Quinn Villanova University Undergraduate Award, Rudolph Celli  and Alex Greenberg

Rudolph is from Berwn, PA and is in Villanova’s School of Business, majoring in finance and real estate.

“This will serve not as a culmination of my journey, but a stepping stone and a huge motivator to continue moving towards being the best student, then professional, that I can be.”

 Alex is from Longmeadow, Mass. and is in Villanova’s School of Business, majoring in finance, real estate and accounting. “Receiving this award is an enormous boost to my overall motivation. It will truly allow me to more easily explore my academic interests while lifting the weight of academic costs from my shoulders.”

Winner of the Rufrano Family Undergraduate Real Estate Award, Danilo Rupena

Danilo is from Aventura, FL, majoring in Business Administration with a concentration in finance and real estate at Florida International University.  “Mr. Rufrano is someone that has had a very successful career, and is someone who I truly look up to for his continuous hard work and contributions to the community.”

Winner of the Charles H. Jenkins Undergraduate Real Estate Award at FSC, Ashley Woodham

Ashley is from Tallahassee, FL., majoring in business administration with a Spanish minor. “Receiving such a prestigious scholarship showed me that hard work pays off.  This scholarship is aiding me in finishing my academic career at Florida Southern College, and for that I will be forever grateful.”

Winner of the ICSC Gap Inc. Fellowship Recipient, Janis A. Stewart

Janis is a recent graduate from University of Southern California with a Masters in Urban Planning. “I believe in the importance of nurturing the professional careers of future generations to help shape better communities,” said Stewart. “I am happy to know that the ICSC Foundation also places great value on communities and how their futures are shaped.”

Thanks to the generosity of our members, we have 14 new scholarship debuting this year.  Find out more about our campaign and how you can help.