Whose Lifestyle is it Anyway?

As the shopping center and retail industries continue to evolve, along with the definition of ‘Lifestyle Center’; I begin to wonder: ‘Whose lifestyle is it anyway?’ Sometimes we try to ‘predict’ the future. In reality, the best we can do is look back, consider current circumstances, and project a trend going forward. This is one of the trends I can see playing out.

A Quick History
As we look back in time, one of the first ‘Lifestyle Centers’ ever constructed was The Country Club Plaza in Kansas City. JC Nichols’ vision for the Country Club Plaza began with his own residential component, and after that was successful, he then proceeded to develop a shopping center where residents could work, and shop. The 55 acre development was designed based on other European shopping districts that he had visited. And the whole project was designed in advance, so future additions appeared integrated with the environment he was creating.

If you look even closer at the past, that neighborhood grocery stores, meat shops, cafes and other establishments create ‘Lifestyle Centers’ for each neighborhood. Places such as ‘The Hill’ in St. Louis. Come to mind. A series of Italian based shops and restaurants create not only a neighborhood service but also a destination – just on a much smaller scale than Country Club Plaza.

Over the years though, the enemy of this kind of ‘livable, pedestrian oriented center’ has been the motor vehicle. Transportation to and from home became much easier, so we found jobs further and further away from home (or we moved our home further and further from our jobs) and as such, the need for neighborhood services evolved to a gas station, and a supermarket anchoring a strip center, located on major commercial intersections.

Then came the Regional Mall, with all of its enclosed space and sea (oceans) of parking. That lasted about 20 years until the malls started to look and feel tired, and people wanted fresh air and sunshine after being inside all week – most Americans spend 90% of their life indoors. That’s when ‘Lifestyle Centers begin to sprout up.

ICSC along with many of the industry leaders have talked about the definition of a ‘Lifestyle Center’ which generally includes some sort of open air, pedestrian oriented center, with a high number of fashion tenants, a variety of full service restaurants, and some aggregate GLA that can develop a significant critical mass.

Whose Lifestyle?
I would submit to you there are other developments that should be considered Lifestyle Centers. For instance I believe that Wal-Mart Super centers are ‘Lifestyle Centers’ for a particular geographic area and in some cases a particular demographic. Clubs like Costco and Sam’s fall into a similar category – while people go to these places for necessities, they also many times eat there (or at the neighboring fast food restaurants) and do their banking and grooming, eye care, and now health facilities are beginning to work their way in. In a way, these places offer an entertainment value simply in the variety of people they draw.

But these monstrous stores are still not very accessible to neighborhoods – they are typically on the edge of town so they can be as close as possible to the suburbs and other outlying communities but still contribute to the tax base of the city in which they are located.

With a movement of ‘sustainable design’ and ‘livable communities’ this is all about to change (again). Compound this issue with the current economic shift and many recent pull-back announcements in the retail chain industry and this becomes a very critical juncture for our industry. I would encourage developers and retailers to start working on their concepts to serve the needs of neighborhoods. Some already are.

Wal-Mart’s Neighborhood Center is an example. A smaller footprint, and more upscale atmosphere allows them to penetrate deeper into the community with a much more relaxed shopping experience. Tesco’s Fresh & Easy is another – the basis for their design is also to be a small footprint, but also be a one stop shop – neighborhood grocery, health foods and warehouse store all in one. If you take this idea one step further, then tailoring their products to the individual neighborhood will allow them to succeed in a smaller format.

Retailer Challenge
From a retailers view, understanding the needs of a neighborhood becomes a different challenge – going in with smaller store formats, and maybe less selection, but more specifically selected for the customers becomes the mantra. Developing new, smaller, more customizable versions of their existing stores will bring them closer to the everyday consumer.

An interesting side note about this is that online shopping for everyday things (like groceries) seems to still be lagging behind other categories? Why is that? There are probably two reasons for this: 1- People still want to select their own fresh meat and produce. 2 - because of habits that have been formed. So if people still have to go to the store for meat and produce, then they will also buy their other goods as well. What if we went back to the good old butcher shop and vegetable market? Then the rest of the dry good products could be more readily sold online, and delivered right to your door.

Developers Response
From a developers view, taking a second look at run-down or even average performing neighborhood centers, or some of the smaller power center to provide more, and better neighborhood services, tailored to the needs and desires of the residents is something to consider. I realize the ROI on these developments will not sustain mega-multi-national firms. But those are just the players that can get the attention of the retailers and work with them to develop new concepts. This type of thinking is akin to downtown redevelopment – filling back in those properties that the malls and super centers drained.

Another development challenge is access – working to connect these centers to the neighborhood by pedestrian, bicycle or mass transit will be a key to success. ‘Turning’ the center to partially front the neighborhood, or at least having a friendly access point o a neighborhood will prove to be a great benefit. This will be easier to accomplish in new developments than in existing ones.

New residential developments could begin incorporating not only this style of thinking (more local, neighborhood shops) as well as possible agricultural areas for locally grown vegetables, flowers and other similar goods.

Consumer Reaction
While the Boomers still have significant influence in the market, Gen X and Y are very quickly coming to maturity, and their buying habits are quite different than that of Boomers. More online, and when they do go to a store, it is usually a more personalized level of service or product selection that they are after. They are also placing high value on environmental stewardship and less on corporate brands.

So next time you leave your house to go buy something think about this: Can I get this product or service within 1 mile of my house? 2 miles? Can I walk or bike to that store? If the answer is no, then that presents a retail opportunity for that neighborhood.