The retail landscape is constantly changing. We continue to see an evolution in the way we use and interact with retail. Gone are the days of transactional, one-size-fits-all retail. Experiential-driven retail and food and beverage has taken over how we plan and develop future projects.
In the past, retail-focused projects were almost homogenous in their approach facilitated via traditional malls and lifestyle centers with convenient parking. Soft goods, limited food and beverage options, as well as limited entertainment components, were widely accepted, and many thrived. So, what changed?
The demographics of those with the most purchasing power has significantly shifted in the last decade, both nationally and regionally, and now are dominated by two key demographics – millennials and empty nesters. Both of these age groups are driving significant population growth in our urban cores and they want to experience life a bit differently.
While millennials are the generation of authenticity and experiential living, empty nesters are seeking many of the same amenities and experiences. They want to live close to everything and to walk from their home to shops and restaurants. They want to go out, not for just dinner, but for a night they will remember. They crave authentic experiences, not ones that are manufactured.
As people in the millennial generation begin to get married and have children, many are looking to move back to the suburbs to facilitate their family lives. The migration out of the urban core will not decrease the demand for a rich and diverse experiential economy, but rather require the suburban neighborhood to fulfill it. New development in both the urban and suburban market will need to look at retail not as a standalone driver of development, but as a part of the whole. Mixed-use spaces, if done correctly, provide this unique blend of experience and authenticity that consumers, regardless of demographic, are seeking.
As we know, mixed-use projects provide a one-stop experience where people can live, work, dine and play, all, essentially, “under one roof.” The projects that will stand the test of time will be more than a place that provides a simple exchange of goods, they will be viewed as an addition to the visitors’ experience and daily routine.
Take, for example, the Elizabeth Hotel in Fort Collins. The hotel is conveniently located in the heart of Old Town Fort Collins and is the areas’ only four-star hotel. What makes this project stand out is not only the unique features of the hotel and its newness, but also the thoughtfully curated blend of retail at the property. The retail available at the hotel includes a well thought out mix of tenants that are complementary to each other while diverse. Each use and tenant promotes and reinforces the brand or “vibe” of the overall project, which is key to a successful mixed-use property.
With this purposeful mix of tenants in mind, the hotel has its own vibrant – and busy – restaurant scene. The hotel has a coffee shop, lounge, restaurant and a live music venue, and they are all found on the same premises as the hotel. Because all of these experiences are provided under one roof, visitors and locals alike are using the space together and in the same way. Tourists are not only coming to see and stay at the hotel, but also to work remotely or host client meetings at the coffee shop, to dine out at the restaurants for lunch or dinner, and to stay out late listening to live music at the music venue. Residents are using the same spaces in the same way.
The Elizabeth Hotel has changed the way visitors and residents interact with and utilize Old Town Fort Collins, much like visitors and residents merge together in downtown Denver, for instance. The hotel and retail tenants have, in essence, created a community that was not available prior to its opening. Nowhere else in the immediate area do we see this type of blurred line between visitors and residents coming together in this same way.
Another factor contributing to the success of the Elizabeth Hotel and its retail tenants is the common brand identity that they all share. The retail tenants are directly aligned to the brand of the hotel. Guests who stay at the hotel are likely the same type of person who would visit the coffee shop, lounge, restaurant and music venue. Each tenant is working in tandem, essentially, to create an iconic brand as one known entity.
Mixed-use is the new norm and will be the way of the future. Very few new projects will be solely retail in nature going forward because mixed-use is proving to be successful for the anchor as well as the retail tenants.
To ensure a successful mixed-use property keep in mind who will use the space and how they will use it. Most importantly, carefully select tenants who complement each other and will draw people in.