Shopping Center Business

MAY 2018

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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Page 146 of 270

SITE SELECTION 142 • SHOPPING CENTER BUSINESS • May 2018 F rom hybrid retailers and lifestyle en- tertainment centers to urbanization and the internet-of-things, today's retail landscape is undoubtedly evolving and complex. Brick-and-mortar retailers are expand- ing online and capitalizing on omni-chan- neling while online retailers are adding bricks to their clicks with physical stores. Adding more fuel to the retail real estate evolution (and confusion) are the general population's changing demographic pro- file, shifting household formation pat- terns, as well as divergent generational groups with decidedly different outlooks on life, lifestyle, dining and shopping. As a result, new trends are emerging: • "Last mile" distribution centers are becoming a pivot point for deliver- ing goods, • Quality "on-market" space is be- coming harder to find, and • Urbanization has left Main Street in the rear view with sights set on high-street and experiential life- style/entertainment centers. With so many factors directly impact- ing every tenant category, our approach to site selection must evolve to discern facts versus hype using data, technology and local market knowledge [see Chart 1]. DATA NOT HYPE Now more than ever, data — not hype — is the bedrock for identifying the right retail site. What's trending today, may not be trendy tomorrow. Yet, the right data will not only provide a preview of tomor- row but also reveal what and who shapes a market or neighborhood today. Demographics are mainstay in the site evaluation process. However, it is no longer enough. Professional and social dynamics such as shifting household formation patterns, work anywhere/ work anytime models, and multi-layered distinctions that go beyond generation- al groupings are affecting mindset and outlook. The good news is that shopping hab- its stem from a distinct mindset that can be directly correlated to other profile data points. For example, while affluent shoppers make more purchases online, discount shoppers tend to make more brick-and-mortar purchases. However, according to the Chicago Tribune, off- price retailers attract both affluent and discount shoppers that enjoy the "trea- sure hunt" experience 1 . Further, accord- ing to The NPD Group, two-thirds of all shoppers spend at off-price retailers 2 . Overlapping profiles emphasize the im- portance of layering data points and maps to optimize analysis [see chart 2]. DATA MINING: RETAILING GOLD Data mining has come a long way over the last five years. And, for retailers, data truly is gold — with the right technology. To- day, retailers and operators that utilize data to develop a tar- get demograph- ic profile that is enhanced with movement, psychographic and live/work/play data have the edge in site selection. Online and offline shopping data from existing operations enable businesses to develop a target consumer/user profile using quantitative and qualitative demo- graphic as well as psychographic factors. If the target consumer/client is a non-re- tail business, psychographics also consid- er business needs such as access to skilled How Technology Optimizes Site Selection Why technology and data are important, now more than ever. Andy Misiaveg Andy Misiaveg Partner The Shopping Center Group Data to Develop Target Consumer Profile Technology to Indentify Target Hot Zone Broker Local Market Knowledge to Finalize Selection Optimized Site Selection + = + Chart 1: Optimized Site Selection 1 Chicago Tribune "Why Shoppers are Flocking to Off-Price Retailers Like TJMaxx," October 24, 2016. 2 The NPD Group "Two-Thirds of All Retail Shoppers Shop Off-Price, Reports NPD Group," July 14, 2016.

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