Item 27 - Appeal Application Nos. 2020-03 and 2020-04 - Central Pointe Mixed-Use Development

Home Browse Search

space extends across channels and even discounters could experience 'rightsizing' and future consolidation." Virtually every retailer will be required to adapt and change, resulting in both winners and losers. This fundamental shift needs to occur, although we cannot overlook the importance of physical stores in providing opportunities to discover and interact with retail brands. Technology and Flexibility One universal theme among interviewees is the unrealized opportunity that landlords and tenants have to share information about their business, including the vast amount of customer data each is now able to collect. Observed one shopping center investment adviser, "Technology will be a differentiator that fur- ther reshapes retail in the future, especially in how 'big data' will help retailers understand their customers and their behavior." Using analytics to enhance customer experiences will define winners and losers in the coming years. Increasingly, retail- ers are relying on technology to anticipate consumer needs, fine-tune selections, and smooth pain points in the purchase process, thereby creating differentiating guest experiences. Some have suggested that the digitally native online retailers have more to give here and, thus far, have been more transpar- ent. There remains a perception that more traditional "legacy retailers" are more guarded about sharing insights. All believe that it is in our best interest to be more transparent and look for new mechanisms to better value physical stores and the role they play in a consumer's path to purchasing. "Clearly, the old metrics don't work anymore," noted one inter- viewee working in leasing for a developer. "We need to find other ways to value the importance of physical stores." A retail insights researcher said, "The era of percentage rent is dead." There also is evidence that we may be seeing progress in terms of lease flexibility. As one interviewee from a real estate ser- vices firm noted, "Landlords seem much more willing to accept shorter and more flexible contracts now." One specific future trend is unfolding in digital payments, rapidly moving toward an era of frictionless retail. As Amazon Go pioneered the experience of shopping without checkouts, it is considered to be only a matter of time before other retailers fol- low suit (and customers come to expect it). It will likely become the norm in a relatively short period of time, moving us closer to where, as one retailer noted, "Shoppers will be able to get what they want, where they want it, and how they want it, regardless of channel or format." Exhibit 3-14 Share of Shopping Center Gross Leasable Area Leased by Tenant Type, 2007 versus 2017-30 2018 ......................................................................................................................................................................... . 2007 2017-30 2018 General retail General retail Health and fitness and apparel and apparel 20.8% 36.1% Health and fitness 28.6%OWN /13.0% ' Restaurants and bars � Restaurants 5.5% and bars 1 7.8% Discounter / 9.9% / Other' 35.5% Other' 32.0% Discounter 10.8 /° Source: Costar Realty Information Inc. 'Includes entertainment as well as drug and other miscellaneous retail stores. 72 Emerging Trends in Real Estate® 2020