As new challenges hit the retail market, large retailers like Macy’s are looking for ways to optimise customer experience and find new ways of attracting shoppers – and income.
Retail is undergoing seismic shifts. Many shopping centres are struggling and commercial real estate experts say that America now has far more parking than it needs. Retail giant Macy’s has announced that it will be creating new forms of revenue by reworking their acres of unused parking lots.
It’s a strategy that has worked well in cities like Miami, Nashville and Indianapolis.
“The fact of the matter is we don’t need the massive parking lots that we needed in the 1970s,” says Doug Sesler, Macy’s executive vice president for real estate at the company’s investor day. He points out that Macy’s usually owns parking space, alongside store space, “representing a total footprint of about 20 acres of land.”
The company has partnered with Brookfield Asset Management (BAM). Macy’s has 841 stores and at least 50 of these have been marked as suitable for parking lot redevelopment. This is known in the industry as ‘out-lots’ or ‘carve-outs’.
Macy’s is thinking about selling parcels of land to restaurants or car wash outfits. Parts of existing stores could be converted for office use.
Restaurants and bars figure highly. Dining areas are being extended out from stores. Rooftop space are being refigured as restaurants and bars. This is all part of the trend to maximise the shopping experience. Many malls are now being refigured as mixed-up communities, with a combination of retail, residential and entertainment.
In line with this trend, Macy’s is hoping to ‘densify’ its Herald Square space. It will reconfigure the store and is also considering adding a rooftop garden. This would ‘activate the store’s upper levels, says Douglas Sesler.
Macy’s is seeing a major shift in strategy. The plan is to close 100 stores across America in 2017. Instead it will increase its e-commerce channels.
Meanwhile retailers like Triple Five look to add more entertainment options to their offering as the retail landscape undergoes seismic changes.