March 19, 2014 at 8:00 AM
Economic Development Director & Chief Innovation Officer
When the retail industry convenes, we’re there. Last week, the International Council of Shopping Centers (ICSC) held its Northern California “Idea Exchange” in Monterey. Retailers, developers, and real estate brokers came together to discuss trends, and more importantly, to do deals in real time. We’d like to share five important trends that will shape our future retail environment.
1. The Bay Area market is hot, and “Class A” space is at a premium. In fact, some industry watchers say quality space is dwindling faster than our water supply! Fremont is no exception – all of our Class A space is basically full, which provides a great launch pad to talk about our retail pipeline, including the active Downtown Project on Capitol Avenue. There is also great buzz about the new ownership of Pacific Commons and the plans that property manager, Vestar, has in store for the center.
2. Online shopping and showrooms are here to stay. – Retailers such as Best Buy are transforming retail stores into a customer experience instead of a point-of-sale transaction. This allows for the downsizing of existing retail stores to more of a “showroom” format. Customers can “click” to find items online and validate the item at a brick-and-mortar store before purchasing - taking a more hands-on approach. This reflects an omni-channel (multi-point contact) approach to retail. At the same time, products like the Tesla Model S are now considered to be a lifestyle product and are being sold in retail stores so customers can interact with the cars in a showroom setting.
3. Restaurants perform better when located near public transportation. How much better? Try 30-50 percent better, according to Craig Semmelmeyer from Main Street Properties. The reason why might be different from what you’d expect. It’s attributable to the ability of restaurant staff to get to their jobs. And, as an added bonus, the “village environment” often found near transit stations allows for longer hours of operation. We’re sure this is heartening to Stegner Development, which is building a new retail project on Osgood Road, just blocks away from the new Warm Springs BART station.
4. Eating habits have changed, and restaurants are picking up the slack. Thank the Food Network for creating a cottage industry of food critics, ready to unleash themselves on their local diner! There is greater desire to eat out at every social strata, and increasingly, food choices reflect different lifestyles. Take, for example, Farm Burger which combines grass-fed beef with a game of bocce ball. It was also noted that noodles and pizza are starting to out-pace burgers in the quick-casual dining segment. (We can’t wait for “Pieology” to open in Fremont!)
5. Independents will survive, especially in categories that allow for service and curation. We all know that the drones are coming with our latest purchase from Amazon. However, don’t write off your local bookstore just yet. There is that pesky little problem of deciding what to read, and that’s where local purveyors can help. Whether it’s a toy store that wraps your gift the same day as the party, the shoe store that can actually fit your foot, or the bike shop that houses a brew pub, independents are more creative than ever.
The next stop for ICSC will be at the Fremont Marriott on April 10th for the “Alliance” program, which will feature an overview of approved Retail Projects throughout the Bay Area. Registration is now open!
We invite you to share your comments. Please check out our social media comment policy.
Welcome to our blog – Takes from Silicon Valley East! Our view is slightly different here on the east side of the bay – from the Mission Peak backdrop to the advanced manufacturing companies that dot our boulevards. As we become more urban and strive to interpret the business issues affecting our innovation economy, we want to share with you our observations, insights, photos, arguments, agreements, inspirations and CEO interviews – and here on our blog is exactly where we plan to do this.