Designing Retail Centers for Resilience

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Merriam Webster defines resilience as “an ability to recover from or adjust easily to misfortune or change”,  which sounds like the condition of the retail industry.

*For years the death of retail has been reported. Internet sales would make bricks and mortar irrelevant.  While we have learned that virtual storefronts benefit from a physical counterpart, there are challenges which need addressing. The days of rolling out shopping center after shopping center is a formula for failure.

For years the thinking was that to combat the internet, more options and inventory had to be stocked, so stores like Best Buy, Target, Walmart, Giant and CVS kept getting bigger. Next came the bigger footprints for grocery stores to offer more variety.  Now these same stores are opening with a smaller footprint, and/or closing stores.  They are also offering different services – such as CVS adding clinics to their stores and buying Aetna, and grocery stores expanding their prepared foods and catering options.

The markets and the “latest thing” seem to change so fast, that inventory can’t be built fast enough to capture that trend before it has been overtaken by the next hottest trend.  The new paradigm is how to make a building “Amazon-proof”.  What can you put in the physical that you can’t get in the virtual via 2-day delivery?  The quick answer is, “experience”. The more thoughtful answer is, “it depends”.

I don’t know that anyone can say how long a fad will last, but we do know that buildings that keep them warm and dry will outlive them.  That is why the buildings must to be resilient.  They must be built in a way that makes them marketable when the grocery store closes, or the next big box has joined the great beyond.  Can the remaining building inventory be repurposed as a mini-warehouse, rock climbing gym, arcade/bowling center, a health clinic, or even the activity we don’t know exists yet?  One constant is that there will always be more 2,000 sf users than 50,000 sf users.  The key is to design the 50,000 square foot shell with the resiliency to accommodate 25 of the smaller users when the large one goes away.

Recently we have been designing new shopping centers with limited depth, not because of site conditions, but that the building would not be too deep for the future 2,000-sf user.  We have also knocked off parts of buildings to successfully make the space marketable and attractive to prospects.  It is a hard decision to lose GLA, but not as hard as having 120,000 sf sitting empty, dragging the whole center down as store after store falls into the black hole the vacant big box or anchor creates.

As your retail center designer, it is critical that we not only serve as your building’s architect, but also make recommendations as to how the center can be best poised for market change. In the case of retail, being resilient means recognizing challenges in the market place and planning thoughtfully, rather than nervously reacting to the ever-changing market forces.

*A list of retail closings in 2018 and 2019 as reported by MoneyWise.com

Name 2018 2019
Toys R Us 735
Mattress Firm 700
Rite Aid 600
Ann Taylor/Loft / Dress Barn 547 650
Subway 500
Teavana 379
Bon Ton 260
Best Buy 250
Sears 222 72
Gap/ Banana Republic 200 230
GNC 200
Signet Jewelers 200 150
Kmart 160 48
Michael Koors 155
The Children’s Place- 144 45
Vitamin World 124
Guess 120
Foot Locker 110
Brookstone 102
Winn Dixie / BI-LO 94 22
Claire’s 92
Sam’s Clubs / Walmart 63 11
Abercrombie and Fitch 60 40
J Crew 50
Crocs 47
Victoria secret 20 53
Macy’s 12
Lord and Taylor 10 9
JC Penny’s 8 27
Nordstrom 44
Target 6
Kohls 8
Top Shop 10
Z gallerie 17
J Crew 20
Christopher 40
Francesca’s 40
Bed Bath and Beyond 40
Party City 45
CVS 46
Lowe’s 48
Office Depot 59
Destination Maternity 67
Performance Bicycles 102
Pier 1 145
Starbucks 150
Lifeway Christian Store 170
Things Remembered 200
Chico’s 250
Fred’s 263
Shopco 363
Family Dollar 390
Charlotte Russe 512
Gymboree 800
Payless ShoeSource 2100
Total 6164 7292

 

John W. Lister, AIA, LEED AP, GGA

Principal, JL Architects