Repositioning for A Level Performance
In today’s post-recession retail real estate market, most repositioning is based on declining centers or bargain-priced properties purchased from developers releasing assets because they can’t make them work. They are B- and C-level centers with upside potential. How do you reposition them for A-level performance?
There are different types of change developers can make: facelifts, expansions, new retail offerings. And these are fine things. However, an A-level center doesn’t arise solely from incremental changes on a spreadsheet. “We’re going to add X restaurants,” or “We’re going to create this kind of space,” can only do so much. You can make something better, but how do you make it great? Radical transformation is needed.
The retail real estate world has long made decisions based on demographics, but now we need to be savvy about psychographics. That is, we must understand people’s values, opinions, interests, and lifestyles. You might know that an area has become more affluent, or younger, or whatever the demographic shift is. But if you don’t understand what motivates those individuals—how they live, what they care about, what they aspire to—then no amount of fresh paint or slate of popular brands will create A-level performance.
Why are psychographics important? Because radical transformation is about what happens in guests’ minds. Visual or content modifications aren’t sufficient; you have to make an impact in people’s lives. Beyond renovating, the design of an A-level retail space is about placemaking, building a community. It’s about the connection a space can make with the surrounding population. True transformation is symbiotic, synergetic, and enables uses beyond simple retail economics.
Design can transform a retail center through a variety of project-specific means, from more green space to better walkability to mixed-use programming, and a variety of other approaches that I will address in future posts. In the end, repositioning is about strategy, not formula. But good strategies only come from good knowledge. How well do you know your customers?