The Official ICSC Blog and the Voice of the Retail Real Estate Industry

The Official ICSC Blog

November 29, 2013

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Forest City Survey Finds Holiday Shoppers Driven by Value

1st Day of Holiday Shopping
According to a recent survey, shoppers are looking for value and kids’ gifts this holiday season, but might get caught short on time. The survey, representing Forest City Enterprises, Inc. centers nationwide, also found:

• 23.0 percent of shoppers expect to spend more on “value brands” this year than last; 13.9 percent expect to spend more on “mid-price” brands; and 12.6 percent expect to spend more on “luxury brands.”

• 32.3 percent expect to spend less on luxury brands, while 11.6 percent and 11.2 percent, respectively, expect to rein in their spending on mid-price and value brands.

Meanwhile, shoppers will be shifting even more of their spending toward children:

• Shoppers expect to spend more on children’s apparel (32.7 percent), accessories (28.7 percent) and toys (26.7 percent) – this year.

• They’ll be trimming spending on fine jewelry (38.7 percent), mobile phones (38.3 percent) and holiday décor (33.5 percent).

“Whether it’s a sign of tight economic times or more wishful and persuasive children, close to one-third of shoppers plan to spend more on children’s categories this year,” said Jane Lisy, SVP Marketing for Forest City. “What your children want takes priority over your personal wishes.”

Alexander Babbage, a leading strategic consumer research firm, conducted the survey of Forest City shoppers’ holiday shopping plans and preferences. With 10,671 completed responses, the margin of error for the study is +/-0.9 percent.

Among other results, the survey found that 91.3 percent of shoppers will use digital, social and mobile tools this year – up slightly from last year. The biggest jump is among those who plan to use a mobile app for price research – 26.2 percent this year, compared with 19.3 percent last year.

But will shoppers get caught short in getting it all done?

“Perhaps most surprisingly,” said Lisy, “the survey pointed out that almost two-thirds of shoppers weren’t aware that there are six fewer holiday shopping days this year!”

For more about the survey, visit www.forestcity.net/HolidayShopping or search #HolidayShopping on the ICSC Twitter feed at www.twitter.com/ICSC.

November 29, 2013

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Support the ICSC Foundation on #GivingTuesday, 12/3

GivingTuesday

Today is the shopping center industry’s most hallowed day: Black Friday. It is the day our communities come out and support the shopping center industry. They shop our very early morning sales and fill our centers with holiday cheer. So, it’s a perfect time to give back to those who make our shopping centers successful.  On December 3rd, the ICSC Foundation will participate in the #GivingTuesday as a way to say thanks to our communities. #GivingTuesday started last year as a campaign to create a national day of giving at the start of the annual holiday season. It celebrates and encourages charitable activities that support non-profit organizations, like the ICSC Foundation.
 
Why should you give to the ICSC Foundation on #GivingTuesday? The ICSC Foundation is the only 501(c)(3) organization dedicated to strengthening the global retail real estate industry as a whole. Plainly, the ICSC Foundation recognizes and encourages philanthropy within the shopping center industry. In 6 years, the ICSC Foundation has contributed nearly $300,000 to charitable organizations important to shopping centers around the world. Your contribution will add to the legacy of giving within our industry.

The ICSC Foundation is also committed to strengthening our industry and the development of the next generation of industry leaders. By giving a gift you help us pave the way for the future leaders of tomorrow who will carry on our work.

To participate in #GivingTuesday make a donation of any amount to the ICSC Foundation. Then encourage your peers to do the same using Twitter and FaceBook. Don’t forget to include the hash tags #GivingTuesday and #ICSCFoundation.

We hope #GivingTuesday will become another important day for our industry. Do not forget about the ICSC Foundation on Tuesday, December 3.

November 25, 2013

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New technology gives malls same-day delivery capability

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by Joel Groover
 
Malls around the world are making it easier for customers to get merchandise delivered. U.S. mall owners are working with a Silicon Valley startup to offer a service that would have been unthinkable a few years ago: same-day delivery of items bought from tenants’ stores and websites. Before mobile devices, such an initiative would have required investing millions of dollars into fleets of delivery trucks and drivers. But thanks to “crowdsourcing” — use of the Internet and GPS-enabled smartphones to access freelance delivery drivers ready to go on a moment’s notice — same-day delivery is now much easier for the shopping center industry.
 
“The mall operators are subsidizing and funding these runners who go around to all of the stores to pick up the items people have ordered,” said Daphne Carmeli, CEO of the Palo Alto, Calif.–based startup, called Deliv. “Then there is basically just one handoff to a driver; it becomes very efficient.” Deliv and General Growth Properties announced their plans this past summer for same-day delivery at malls in San Jose, Calif., and in Chicago, Los Angeles and San Francisco. The Palo Alto, Calif.–based startup is in similar negotiations with Macerich, Simon Property Group and Westfield, though no deals have been announced yet.
 
U.S. retailers and malls are well positioned to operate the fastest of distribution models, Carmeli says, because they boast many brick-and-mortar sites that can double as distribution centers. And given the number of those sites and their proximity to the consumers, even Amazon.com will be hard-pressed to compete. “Amazon has built 56 distribution centers across the country in the last five years to do same-day delivery in about 20 cities,” Carmeli said. “Collectively, [brick-and-mortar] retailers have far more square footage and locations than Amazon. The top 100 retailers have more than 100,000 points of distribution in the United States alone. Suddenly, scale is in the favor of the retailer.”
 
The service costs the same or less than standard shipping, but gets cheaper with volume, Carmeli says. “If a driver picks up one item at Nordstrom and it takes an hour to deliver it and get back, that delivery might cost me $15,” she said. “Delivering two items in an hour would cost $7. As you start adding more stops to drivers’ routes, the increase in volume brings down costs very quickly.”
 
General Growth is promoting same-day delivery as part of a suite of services intended to make the mall experience as convenient as possible for shoppers, says Scott Morey, a General Growth senior vice president. “But this is also about retailer convenience,” he said. “We want to make it really simple for retailers to participate so that it eliminates the barriers.”
 
The five General Growth malls working with Deliv use strategically situated staging areas for product shipment or same-day pickup, says Morey. “Let’s say I bought something online and I want to come get it at the mall, but the store is closed,” he said. “This provides a means for people to pick up what they ordered.” Served by designated parking spaces, these areas highlight the prospect of the “bagless” mall: Rather than lugging shopping bags around, customers have the purchases sent to the staging area.
 
Retailers will face competition from e-commerce giants Amazon and eBay. In October eBay announced an alliance with one of Deliv’s primary competitors, Shutl, which relies on a network of private couriers. EBay aims to begin offering same-day delivery in 25 U.S. markets this coming year. But Carmeli says consumers prefer to buy directly from retailers. “When you buy something from Google or eBay, you’re buying it from their marketplace, so the driver actually goes to the store to buy the item and bring it to you,” she said. “If you need to return that item, you are really challenged. Deliv preserves the brand of the retailer by coming into the picture only after the transaction is completed.”

November 22, 2013

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Cushman & Wakefield Becomes ICSC’s First Global Partner

Cushman & Wakefield has signed a 13-month global sponsorship agreement with ICSC through which it will share global market retail intelligence and collaborate on research enterprises such as the European Shopping Centre database. The two will also be showcasing their collaborative efforts at ICSC’s major shows, such as RECon in Las Vegas; RECon Asia; RECon LatinAmerica; the European Conference, and other gatherings such as the dealmaking events each year in Chicago, New York City and Whistler, the Open Air Conference, the University of Shopping Centers and VRN.

“Retail is absolutely central to our strategy,” said Carlo Barel di Sant’Albano, executive chairman at Cushman & Wakefield, describing the company’s global expansion at a signing ceremony at ICSC’s New York City headquarters Friday morning. Most recently Cushman has been focusing on growth in Asia, he said, and Africa will be next.

The sponsorship deal with ICSC will benefit both organizations, said Michael P. Kercheval, ICSC’s president and CEO.“Expanding our global offerings continues to be an important initiative for ICSC,” Kercheval said. “Teaming up with an internationally recognized firm of the caliber of Cushman & Wakefield will make us even more effective, and our services more valuable, as we strive to serve our members worldwide.”

Cushman sees a similar benefit flowing to its clients from the sponsorship agreement. “At Cushman & Wakefield we have the scale and expertise to help retailers, investors and landlords succeed in this dynamic sector right across the globe, whether in luxury retail, main streets, shopping centres or out of town,” said Sant’Albano. “It is an honour for us to be ICSC’s first global sponsorship partner and this landmark agreement further reinforces Cushman & Wakefield’s position at the center of global retail.”

Collaboration between the two organizations predates Friday’s formal agreement, noted John Strachan, head of global retail at Cushman & Wakefield. “We have enjoyed many years of mutually beneficial collaboration with ICSC, including research partnerships, participation in conferences, education and specialist retail groups and much more,” he said. “I am delighted that our growth together has culminated in us becoming the first and only global sponsorship partner of ICSC.”

The sponsorship agreement will be active from Dec. 1, 2013 through Dec. 31 2014. <br>

 

November 20, 2013

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Congratulations to the University of Texas Dallas: Winners of the Texas Conference Student Case Competition!

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By: Sarah Ritchie
In graduate school, I encountered the 25-cent word praxis, which I came to understand was the marriage of theory and practice….the hands-on application of “book knowledge.”  For young people studying business and real estate, taking classroom lessons into the real world is often the most engaging, effective way of learning.  The power of practical educational opportunities was on magnificent display at the recent ICSC Texas Conference in Dallas where three collegiate teams participated in a first-ever ICSC Student Case Study Competition.
 
Many months ago, a group of Texas volunteers, under the leadership of Texas State Director Kendra Hinderland, made known their desire to stage an undergraduate case contest, to be part of the annual Texas Conference, in the autumn.  To be sure, there are numerous well-known case contests in which real estate students may compete.  For instance, ULI administers the Gerald D. Hines Student Urban Design Competition and NAIOP hosts inter-collegiate “NAIOP Real Estate Challenges” in various locations around the U.S.  Similarly, numerous academic programs in business and real estate, including the University of Texas, MIT, USC, and the University of North Carolina, among others, host student contests.  What made the ICSC Texas Conference effort unique was its focus on undergraduate students (as opposed to those in graduate school), as well as the emphasis on a retail real estate problem.
 
After extending invitations to seven Texas college programs in business/real estate (and the University of Oklahoma….which I suspect may have been thrown in because of the lobbying of yours truly, a die-hard OU alum), three teams participated in the case presentations at the Conference, November 6-8, 2013:  Texas Christian University, the University of North Texas, and the University of Texas Dallas.
 
Each team consisted of four students, who were selected in consultation with faculty advisors at each school.  The assembled teams were given an original, specially-crafted hypothetical case study two-weeks before the Conference.  According to Jace Hinderland, a recent SMU graduate who spear-headed the effort, the coordinating committee sought to fashion a research problem that integrated the major disciplines of retail real estate—finance, leasing, development, and the like.  Although each student team had been paired with an ICSC volunteer liaison who stood ready to provide professional guidance, the students were largely on their own to develop an “answer” to the central questions of the case.
 
The project, in a “hypothetical city,” focused on a distressed shopping center property, now in the hands of a financial institution.  The property was without an anchor tenant and suffered from a high vacancy rate, with impending eminent domain issues being leveled by the municipal government.  Participants were asked to put forward re-development plans to stabilize and re-invigorate the property, which would ultimately be sold by the financial holder.
 
Douglas Hermann, representing the winning UTD team, explained that the teams were given relevant demographic and financial information.  With the support of their school mentor Michelle Miller, Director of Corporate Relations at the Jindal School of Management at UTD, and several professionals who provided consultation during the preparation phase, the foursome created a comprehensive plan, complete with a PowerPoint presentation and copious handouts, that was delivered to the all-star roster of 8 judges at the Conference.
 
According to Hermann, “Our team demolished the 30,000 sq ft  anchor tenant and re-built 15,000 sq ft, with the hope of leasing the new space to CVS, Walgreens, or Aldi.  We used the other space for additional parking, bringing the property up to city codes for the parking ratio.  We also wanted to move The University Spirit Store, a current tenant that was occupying a prime end cap, to the other vacant suite in the center.  Our idea was to bring in a Starbucks in that space.  Finally, we proposed putting an outparcel building for a single tenant ground lease, which we could sell off in year 3 of the project.”
 
While the winning proposal was straight forward, its development was labor intensive.  Says Hermann, “Personally, I spent at least 40 hours preparing for the presentation.  On top of that, we spent many hours working together as a group.  It was an incredibly intense experience.  But we were thoroughly prepared for our pitch, as well as the 15 or 20 minutes of judges’ questions that followed.  We anticipated many of their concerns, and because we’d spent so much time focusing on the project, we were able to confidently respond to the judges’ critiques and questions.”   He goes on to say, “This has been one of the highlights of my undergraduate career.”
 
Stephanie Jacobs, also from the UTD team, added, “I enjoyed the creative aspects of the case study.  And, beyond the actual contest, there were fantastic networking opportunities before and after the competition.  Our efforts were well-received, and we enjoyed great positive feedback from many industry people at the meeting.  This was an amazing experience I’ll never forget.”
 
The other UTD team members were Tryna Hammond and Karmen Lau.  The winning team received a $4,000 scholarship award, provided by the Texas Platinum Sponsors including CBRE, Edge Realty Partners, Fidelis Realty Partners, Hunt, The Retail Connection, UCR, ViewPoint Bank and Weitzman/Cencor.  TCU’s team consisting of Robert Taylor Baker, David Belpedio, Jarrod McCabe, and Matthew Thomas Harrison placed second, earning a $2,000 prize. Also participating were Ying Zhi Low, Jason Long, Andy Hechavarria, and Daniel Morales, representing UNT.
 
Special thanks go to organizers and judges:  Elizabeth Allen, Director of Leasing, RioCan Real Estate Investment Trust; Patricia Bender, Executive Vice President, Director of Leasing, Weingarten Realty Investors; Denise Browning, Senior Vice President, Madison Marquette; Rick Gillham, President, Gillham, Golbeck &; Associates, Inc.; Doug Hazelbaker, Senior Managing Director, HFF, LP; Jace Hinderland, Associate Vice President, Rockwood Real Estate Advisors, LLC; Kendra Hinderland, Texas State Director; John Maggiore, Director of Development, EDGE Realty Partners; Steve Sumell, Trademark Property Company; and George Sakakeeny, Partner, AdVenture Development, LLC.
 
Plans are already being discussed for future competitions, based on the excellent contest at the Texas Conference.  Ms. Miller of UTD, who has worked in the real estate industry, summed up her students’ experience in this way, “When UT Dallas was invited to participate in this brand new competition, I knew it would be an experience of a lifetime for our student team.  It’s was a professional development and networking opportunity that any real estate professional would have loved to have had in their younger years.  Our students were committed to winning this competition, and I was so proud of each of them for doing exactly that!”
 
All this goes to show that collegiate classrooms go well beyond the ivy-covered walls of the University.  Congratulations to all involved!

November 14, 2013

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Deck the Malls with Crowds of Shoppers


When the holiday season officially kicks off the day after Thanksgiving, retailers will be scurrying to make the most of a compressed shopping season that is six days shorter than last year. In addition to timing considerations, increased competition is also pushing retail operators to re-evaluate their strategies and service offerings this year. Thankfully, according to a recent survey by Accenture[ii] approximately 20 percent of American shoppers surveyed plan to increase holiday gift-buying-budgets by $500. Retail experts have identified five key strategies that retailers can employ this holiday season to capture and maximize their share of sales.