Building Engines had the privilege of attending ICSC Las Vegas 2024, a conference that brought together dealmakers and industry experts driving innovation and evolution in commercial real estate (CRE). After attending various sessions throughout the three days, we’ve compiled the top takeaways from the event.
Takeaway 1: The evolving landscape of foot traffic
As flexible work arrangements become the norm, drastic shifts in foot traffic patterns are becoming evident. There’s a marked preference for suburban markets over urban ones, and wider demographics are embracing this change.
As remarked by Ethan Chernofsky, SVP, Marketing, Placer.ai, “Surburban behaviors are fundamentally different. We are seeing visits to grocery stores during the day on a Monday.” He went on to say, “When we look at urban environments, there has been an interesting shift towards weekends or Friday evening visits with an uptick.”
This shift not only indicates a more consistent recovery for suburban retail but also reveals the nuances in consumer behavior. As Chernofsky said, “It comes down to the same thing with offices as it does on the retail side, how do we incentivize people to come in?”
Takeaway 2: Embracing the change in space utilization
As the demands of consumers change and the availability of real estate dwindles, retail space utilization is becoming a critical strategic component. Retailers are being urged to creatively accommodate co-tenants and rethink their existing space usage.
This sentiment was echoed by Scott Schnuckel, VP of Property Development and Real Estate, Kohl’s Department Stores, Inc. Schnuckel remarked, “We’ve dabbled a lot with trying out different size formats from global stores all the way down to stores that are 30,000 sq. ft. As we came out of COVID, it became pretty clear to us that we have excess space but the best way to redeploy is to reinvest inside of the buildings and the brand categories that we’re not known for.”
With this newfound flexibility in store design, we are seeing a new consumer. In fact, retail trends are bending towards smaller format stores in denser urban areas while the trend towards larger retail spaces, ones packed with a broader range of experiences, continues to expand in less populated areas.
Takeaway 3: Tech-driven retail experiences
Tech-driven retail experiences are rapidly becoming a major component of the post-pandemic retail environment. According to Deborah Weinswig, Founder & CEO at Coresight Research, augmented and virtual reality (AR and VR) technologies are finding their footing in various forms of retail.
James Cook, Senior Director, Americas Retail Research, JLL said that luxury brands, for instance, are leaning into VR. He said, “Luxury is doing it a lot. They have fashion shows on VR headsets, you can see and order items that way.”
From contactless payment methods like Apple Pay and tap-to-pay to RFID-enabled self-checkout systems, retailers are reshaping the entire customer journey. While embracing these technological advancements, brands also need to ensure the human touch remains, striking a careful balance between automation and personal interaction.
Recapping ICSC Las Vegas 2024
As touched on throughout ICSC Las Vegas 2024, the astounding shift in retail patterns, driven by the pandemic, has transformed the CRE landscape. These dynamics force us to rethink traditional business models and drive creative innovation in the commercial real estate sector. Understanding and adapting to these changes will be key for professionals navigating the post-pandemic landscape. The industry will continue evolving, and success will depend on agility, adaptability, and a readiness to embrace new realities.
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