Big box retail stores will have to be much more creative post-COVID with the pandemic forcing consumers to e-commerce more than ever before. That is, according to a panel of Atlanta retail experts discussing trends at a recent online Jewish National Fund-USA real estate event.
JNF-USA hosted the noon panel June 15 as part of its revived Atlanta real estate division. The three panelists included experts in real estate developments ranging from shopping centers to the cutting-edge Illuminarium interactive and immersive experience set to open July 1 on the Atlanta BeltLine.
“I would say COVID changed … the way municipalities looked at rules. It changes the look of shopping centers today,” said David Birnbrey, chairman and CEO of The Shopping Center Group.
In terms of the design of shopping centers, Birnbrey practically sounded the death knoll of traditional malls and department stores because they are “functionally obsolescent.” He claimed the “barbell” layout of malls with large anchor department stores on the ends connecting to a string of retail between the anchors means some stores face backwards from the street, a setup that “doesn’t work with what people are looking for.”
Instead, Birnbrey sees shopping centers post-COVID needing curbside lanes in front of stores for quick pick-up and easily accessible parking. He said the majority of shoppers are going to buy online and pick up their products in the store, perhaps buying on impulse when inside. Delivery will also be a big aspect of shopping in the future, along with autonomous cars that do the shopping, even while consumers sleep, and for older shoppers who typically aren’t as mobile, he said.
Retail development of the future will follow a pattern set by Amazon, Birnbrey said, with a creation of a hub and spoke model, the hub being the distribution center. “If you are looking at pure play retail [e-commerce], Amazon is pure play retail. It has a 1.2 million-square-foot distribution home plate with Whole Foods and Amazon Fresh and Amazon Go built around that.” And each of those stores will have their own distribution centers, he explained.
This nontraditional retail model is “going to create a lot of problems” for traditional developers and retail because it’s “going against the grain of how developments were developed. For instance, percent of rent [rent based on tenant’s gross income] will be a thing of the past because people will not be able to determine where the sale actually was made, so I think it’s going to be very difficult to determine the success of brick and mortar retail.”
Painting a slightly more promising picture of shopping malls at the JNF event was real estate mogul Ron Glass, principal of B. Riley Advisory Services, a diversified financial services company. He began with a recap of retail history in Atlanta from Davison’s and Rich’s downtown to Cobb Center, Cumberland and Town Center malls to the northeast and Gwinnett Place and Mall of Georgia to the northwest. Elsewhere, he noted the turnover in shopping malls such as Lindbergh Plaza and Sandy Springs Plaza.
Those that survive COVID, Glass said, will have the right mix of tenants, parking, visibility and ingress/egress.
“Brick and mortar retail is far from dead.” He cited a photograph he took from his Buckhead office showing a parking lot full of shoppers on a weekend at Lenox Square mall during COVID. “You’d think it was Black Friday.”
Phipps Plaza is similarly situated, Glass said. The two Buckhead centers are “what we call fortress malls and adaptable malls,” he said. “I don’t think those malls are gong away, but they are going to have to reinvent themselves with other entertainment concepts.”
Both Birnbrey and Glass recognized the new Illuminarium project as offering the next wave of retail, with products based on an entertainment platform. The new technologically infused tourist attraction was detailed by panelist Ethan Robinson, who handles business development for Illuminarium Experiences. His father A.J. Robinson, president of Central Atlanta Progress, moderated the JNF event.
Summing up the panel discussion, Birnbrey remains optimistic about retail prospects. “I’m actually very bullish about our future because I believe bricks and mortar are necessary in terms of putting product in the hands of consumers,” Birnbrey said. “The next 10 years are going to be the best time to be a consumer. You have price; you have selection; you have variety, and you have convenience, and convenience is the ultimate goal of retail in any shape or form.”
- Roni Robbins
- A.J. Robinson
- Central Atlanta Progress
- jewish national fund
- David Birnbrey
- The Shopping Center Group
- Illuminarium Experiences
- Ethan Robinson
- Ron Glass
- B. Riley Advisory Services
- Amazon Fresh
- Whole Foods. Amazon Go
- Phipps Plaza
- Lenox Square
- Gwinnett Place
- Mall of Georgia
- Cumberland Mall
- Town Center Mall
- Limbergh Plaza
- Sandy Springs Plaza