Rick Caruso is a member of the National Retail Federation, a group which has been holding an annual convention for 103 years. This past week they have been meeting in New York City, with an expected draw of 30,000 attendees, their largest ever, during its four day run.
Rick Caruso is also the founder of Caruso Affiliates, a development company that owns some of the most profitable shopping centers in the world, including The Grove in Los Angeles. I would assume that Mr. Caruso knows something about the field of retail trade, so when he speaks – maybe, just maybe – I should listen.
Caruso, a proponent for open air centers that mimic urban shopping streets, says that “Within 10 to 15 years the typical U.S. mall, unless completely reinvented, will be a 60-year-or-so aberration that no longer meets the public's needs, the retailers' needs or the community's needs." He thinks retailers need to seek out centers and shopping districts that create community and meeting places similar to marketplaces that have thrived for centuries.
Why should the retail world mimic what has sprouted up and evolved naturally in culture all over the globe. Retail has always followed the population's movements and has never led them, yet today seems to dictate that one do their shopping by automobile. If retail is urged to replicate the urban shopping street, then it should be done as realistically as possible and as close to the customers as possible. That would mean – in the neighborhood – not on the edge of one.
The unofficial theme of this year's conference appears to be “Get ready for big changes”. The retail world could change well more over the next five years than it has in the past 50. Much of it due to changes in technology and online/mobile shopping. While the recent security breaches were not mentioned, the successes or failures in combating them will factor in those changes.
Surveys are reported to show that 69% of CEO's in the largest retail chains are highly confident in better sales growth, yet they were not as aware of the dramatic changes occurring currently as they should be. Perhaps many more of them need to go on “Undercover Boss” and not just visit a selected few of their stores.
How will these retailers be affected by the shopping habits of Millennials, who want stores close enough to walk from home? What if Google and automakers take great strides in perfecting the self driving car, to the point of not needing to park it – just call for it when you need to be picked up? Imagine that store catered to the whims of the neighborhood customers like they used to, what do you see?