Creating the Retail Experience
By Dustin Watson, partner and director of sustainability, DDG
Place-making has become perhaps the essential element in creating value in today’s competitive retail environment.
As retail has come to be regarded as less about buying goods and more about creating experiences, differentiating a retail project and, in doing so, increasing the odds for consumers to choose one shopping center over another and then keep them coming back have become key to raising the value and appeal of a retail property.
Given that increased demand for a retail “experience,” you have to wonder why so many retail centers look the same. Edward T. MacMahon, senior resident fellow at ULI, recently noted: “If you were dropped along a road outside of most American cities or towns, you wouldn’t have the slightest idea where you were because it all looks exactly the same: the building materials, the architectural styles, the chain stores, the outdoor advertising.” We are often faced with a collection of big-box retail stores and power strip centers characterized by unexceptional design that lacks a soul and true spirit of “place.”
Placeless-ness can probably trace its roots to the explosion in suburban development in the 50s and early 60s. But when combined with a more recent trend — the ability to shop online, often for significantly lower prices, in the comfort of your own home — it is no wonder designers and architects feel challenged as never before to create a sense of “place” that makes a trip to a retail center fun, uplifting, and even memorable?
While there are numerous retail projects that exemplify the best qualities of place-making, one of the true game changers was Bethesda Row, located in Bethesda, Md., northwest of Washington, D.C. Originally an auto-dependent commercial strip completely lacking in character — but with some solid advantages, a strong demographic base, an existing parking garage, and ready transit access to transit – Bethesda Row turned an outdated mode of suburban development into a mixed-use, multi-block development that was more urban and much more human-scaled. The project’s place-making attributes focused on both the street experience and connectivity to the community, creating a unique, walkable, and truly memorable experience.
Clearly, not all retail projects will, or should, follow the example provided by Bethesda Row. Doing so would not only be financially impractical, particularly for projects without the right demographics, but would defeat the whole idea of place-making. To MacMahon’s point, they would all look exactly the same and, as a result, would offer nothing special or memorable to attract prospective patrons.
Bethesda Row has had a profound impact, though, as demand for designers to create the next great shopping “destination” increases. One recent example of this trend is Station Park in Farmington, Utah, 16 miles north of Salt Lake City. A transit-oriented project that derives its name and much of its design inspiration from the on-site commuter rail station at the northern terminus of Utah’s new “Front Runner” rail transit system, Station Park encompasses more than 800,000 sq. ft. of retail, entertainment, restaurant, office, and hotel space.
Station Park has integrated familiar elements from downtown Salt Lake City’s historic architecture into its blend of traditional Main Street design elements. Farmington’s historic charm and trademark sycamores are reflected throughout the project, while art deco-inspired graphics and signage welcome visitors from atop a series of logoed, 100-ft.-tall pylon signs.
Designed both for flexibility and the ability to increase density overtime just as in any true urban setting, this suburban location provides opportunities for buildings to change uses, open spaces to be filled, and buildings to be added. It’s a mix of urbanism and lifestyle center, with a true spirit of place.
What really attracts patrons and keeps them coming back, though, is a state-of-the-art, 5,000-sq.-ft. show fountain. One of only two of its kind in the country, the fountain boasts technology that enables it to create a dazzling combination of colored lights, music, movement, and 30-60-ft. high dancing waters. It also features a waterfall that flows into a lower pond and misting nozzles that send fog throughout the water feature.
Destination projects such as Station Park and Glendale, Wisconsin’s Bayshore Town Center provide a clear response to consumer demands to make innovative design, leisure, and entertainment to be a part of their retail experiences.
The question that remains, particularly in light of the trend toward place-making, is what happens at the other end of the retail spectrum to all of those older, smaller shopping centers that were built over the past 50 years?
Here again, place-making plays a key role. That doesn’t mean turning every strip mall into another Bethesda Row or Station Park. What it does mean, though, is using the same characteristics found in place-making to refurbish retail projects that are clearly showing their age (or even newer shopping centers that were built with little thought to an experiential design).
The trick for property owners is to make certain these older shopping areas still exhibit the traits that attract shoppers and invite them to have a fun, memorable experience.
Improving the facades of aging buildings to reflect the community in which they are located, adding new lighting, landscaping, and signage to create a safer and more inviting environment, and creating courts and outdoor cafes where patrons can linger all contribute to effective place-making, creating a unique and welcoming environment even in a smaller, older retail center.
An excellent example of this trend is Rockville Town Center in Rockville, Md. There, the simple addition of improved signage and graphics and façade facelift reinforce the project’s architectural character and has helped to provide a much-needed visual lift which has, in turn, generated a greater draw for nearby consumers.
In a country that is already over-retailed, reinvesting in existing properties has become increasingly commonplace. This reinvestment reduces the pressure on our natural resources by not developing on Greenfield sites further outside the current suburban sprawl. It is also typically less expensive because of reduced infrastructure costs. This redevelopment creates economic revitalization and can help stabilize existing communities.
The catch for designers, engineers, and architects is to keep in mind the same place-making principles that are at play in a large-scale project like Station Park. Those principles also apply to that 12-store shopping center serving the local community. Applying them effectively can serve to reduce sprawl, stabilize communities, and foster economic renewal, while still providing the place-making features that consumers want and, indeed, demand.
Dustin Watson is a Partner and the Director of Sustainability at the Baltimore-based design firm DDG, an internationally renowned, industry leader, delivering innovative and award-winning design, planning, architecture, and graphics to commercial developments in cities, towns, and suburbs around the world. Dustin is also on the International Council of Shopping Center’s Retail Green Planning Committee, the Urban Land Institute’s Sustainable Development Product Council, and the AIA Baltimore’s Committee on the Environment. For more information, visit ddg-usa.com.
PacSun profit picture challenging as Q4 comps rise
Pacific Sunwear overcame weak mall traffic and bad weather to log its eighth consecutive quarter of same-store sales growth with a 2% comp increase in the fourth quarter.
The teen and young adult retailer said sales from continuing operations during the quarter ended Feb. 1 totaled $218.6 million compared to sales of $222.8 million during the fourth quarter the prior year, a period which included the benefit of an additional week which added sales of $9 million. PacSun ended its most recent fiscal year with 618 stores compared to 644 in the year earlier period.
"We continue to be encouraged by our positive momentum within a challenging retail environment throughout the year, marked by eight straight quarters of positive comparable store sales, sustained gross margins, and reduced operating costs, all contributing to a significant improvement in our operating performance compared to fiscal 2012," said Gary H. Schoenfeld, PacSun’s president and CEO. "Looking ahead to fiscal 2014, our key priorities include showcasing our premium brand portfolio through curated assortments, managing inventory with on-trend fashion and speed to market, and continuing to elevate both our in-store and digital experience.”
Despite some modest top line growth and store base purged of underperforming units, PacSun continued to lose money in the fourth quarter. The company reported a loss from continuing operations of $22 million, or 32 cents a share, slightly better than a prior year fourth quarter loss of $22.2 million, or 32 cents a share.
On an adjusted basis to exclude non-recurring expenses, the financial situation didn’t look much different. The adjusted loss from continuing operations was $11.8 million, or 17 cents a share, compared to a loss of $11.6 million, or 17 cents a share.
For the full year, the company’s sales from continuing operations were $797.8 million versus $784.7 million the prior year. Full year comps rose 2%.
Men’s Wearhouse deploys omnichannel initiative
A little more than a week since the Men’s Wearhouse confirmed plans to acquire Jos. A. Bank, it is launching an omnichannel inventory program giving customers access to merchandise within its distribution center and its more than 900 retail locations from one spot.
Men’s Wearhouse has developed an employee-facing custom mobile app called "Find-It" and has introduced iPads in more than 650 retail locations for employee use. The app allows employees to check inventory levels across the entire network and add an item to the customer’s order regardless of its location.
Online customers will also be able to choose from nearby stores’ inventory as well as the company’s distribution center. If they find an item they like at a nearby store location, they can reserve it online and pick it up at that store when it’s convenient. Once an online customer selects merchandise from a local store, they will be notified within an hour when the item has been located and put on hold at the selected store for pickup.
After a successful pilot in the Houston market, Men’s Wearhouse launched the reserve online, pick up in-store program in all stores company-wide.
"By giving our customers visibility to each store’s inventory, we can better serve their needs," said Adam Harris, director of innovation at Men’s Wearhouse. "The Find-It app and reserve online, pick up in-store rollout allows us to provide a truly omnichannel experience for ultimate convenience. And this is just the tip of the iceberg — by putting iPads in the hands of our employees in more than 650 stores, we can rollout a multitude of other apps to increase efficiencies, improve productivity and continue to provide world class customer service to our customers."