ICSC’s annual RECon Convention in Las Vegas is a great opportunity to get a pulse of the industry. Each May, the trends and themes expressed at RECon are a great way to get a snapshot of the retail and mixed-use industry’s health and collective mindset.
So, you can imagine how surprised I was when I heard the words ‘retail death spiral’ from a reporter at this year’s event. “So…tell me about the retail death spiral” was the exact, and first, thing out of her mouth. No warm up softballs. She went right for the jugular. And, it certainly got our attention.
There obviously isn’t a retail death spiral, but the fact that the question was even asked is, itself, a big deal. It contributes to an emerging narrative, and that narrative is shaping perception and acquiring a life of its own–with very real financial consequences.
As someone that lives and works in Southeast Michigan, I’ve seen this phenomenon in action before with the way people have talked about the City of Detroit. There was a time–not too long ago–when it felt like every article and every conversation about Detroit was competing to come up with new and more graphic ways to describe how bad things were. To hear and read the things people, even our own Michiganders, were saying and writing about Detroit was to envision a decaying urban wasteland with a grim future.
The reality was very different–and far more complex. In actuality, the fundamentals of the city were never as bad as conventional wisdom and popular perception would have you believe, and plenty of good things were happening behind the bleak headlines. Today, Detroit is a poster child for civic renewal and investment. For a city that was regularly having its obituary published just a few short years ago, this transformation speaks to the excesses of hyperbole and the importance of perspective.
Like Detroit, brick-and-mortar retail is now facing some very real challenges and is going through a complex and painful period of transition. And like Detroit at that time, retail real estate has another issue: it has a PR problem.
Perception vs. reality
Any good PR person will tell you that in order to change perception and pivot messaging, you must work from the inside out. If Michiganders were piling on or perpetuating the negative Detroit perception, how could we ever expect that the rest of the world would see it any differently?
There’s no getting around the fact that retail has many challenges. Store closings are up significantly, and stale formats and formulas are succumbing to the relentless competitive pressures of an evolving online marketplace. It’s no secret that large department stores and traditional malls have been particularly hard hit.
But it isn’t just shopping centers and retail patriarchs like Sears that are struggling. Iconic brands like Radio Shack and The GAP have paid and are continuing to pay the price for evolving too slowly, or not at all. But the fact that outdated and slow-to-evolve formats, brands and businesses are struggling doesn’t mean the whole industry is doomed.
A restaurant that doesn’t update its menu or format will also struggle over time. And retail has always been a cyclical business, with foundational shifts that reflect an industry that reflects societal preferences about how (and where) we live, work, shop, eat and play.
From a PR perspective, the industry needs a clear, cohesive and consistent message. It needs balance. This is a reset or a recalibration, not a funeral. To paraphrase something one of our clients said to me recently: “If the world was falling apart, why would we be spending $100 million on a new mixed-use development?” That’s just one client and one project, but it speaks to a deeper truth: quality mixed-use retail isn’t just surviving, it’s driving – and innovative and inspired developers will continue to create dynamic and financially viable spaces in markets across the country and around the world.
And while there’s no doubt that competitive pressures from online and mobile sales continue to be an important factor, some perspective is in order. While it features in close to 100% of articles discussing the challenges of brick-and-mortar retail, e-commerce is still responsible for only about 8.5% of all sales. To put that in context, one Columbus, Ohio-based client (Yaromir Steiner) points out that the city’s three Costco stores alone generate more annual sales than all of Columbus residents’ online purchases combined.
That’s a remarkable statement about the state of retail today.
The death spiral language is a reminder of how easy it is to get swept up in dramatic narratives and buy into broad, sweeping conclusions. We’ve seen the same basic idea playing out in the publishing world. For years now we’ve heard about how e-books were the future, and that the traditional printed book is dying a slow death.
But sales of print books actually increased by 3.3% in 2016, while e-book sales slumped. As one writer in The Guardian put it: “…cheerleaders of the e-book failed to account for human experience, and publishers blindly followed suit. But the novelty has worn off.”
The idea that the power of experience has a surprisingly strong and enduring appeal to consumers should be a familiar one to retail real estate innovators, who have been designing, developing, planning, programming and merchandising with that in mind for years now.
The real answer is that retail isn’t dying–it’s changing. But talking about that change, and all the complexities that come with shifting demographics, design trends and evolving consumer preferences (all while avoiding the dire and overly simplified death spiral language) can be a challenge.
Talking the talk
Talk isn’t cheap–but it can be costly.
The question for commercial developers and other retail real estate professionals then becomes: what can you do about it? How can you make sure that you and your team are not contributing to the PR problem?
First and foremost, don’t hide from the issues–embrace them. Piling on to a hyperbolic narrative is counterproductive, but sugarcoating very real challenges is equally problematic. People will see right through fluff, and it’s important to be honest. The good news is that honest answer is also an optimistic one: the greatest opportunities, in the stock market or in business, arise from chaos.
Times of challenge and transition are also full of opportunities. Across the industry, we see countless examples of innovation and creativity–from reimagining and reinventing established properties, to creating ground-up projects that are literally and figuratively breaking new ground. Vibrant new destinations (and old destinations that have been made new again) feature an appealing mix of uses and an experiential energy that is transforming the brick-and-mortar landscape.
Hone your message
If you are a retail real estate professional, the first thing you need to ask yourself is do you have a message? Your message doesn’t have to follow any specific formula, but it does have to be authentic. Make sure you have a way to describe what’s going on in the world that is compelling, and that will make people confident in your insights, your team, your skillset and your product. Whether it’s a reporter, an investor or a fellow professional, people want honesty, but above all they want to know that you have a plan.
Tell your story
The best leaders are expert storytellers. They know how to use design, materials, shapes and signage in a way that gets attention and captures the imagination. The key is to apply those same storytelling instincts to the language you use to talk about your work.
An experienced PR professional with retail real estate experience can help you build your story the same way you build your projects: with strategic sophistication, prioritizing value and synergy, and with exquisite attention to detail. Because how you talk about yourself and your industry matters, and it’s worth taking the time to make sure you do it right.
When you just regurgitate and perpetuate conventional wisdom, you aren’t doing your brand, your business or the larger retail real estate industry any favors. More importantly, you aren’t likely to connect with your target audience in a meaningful way.
So, tell your story. Do it the right way. And make sure that your brand and your business are aiding the retail real estate industry in its effort to emerge from its PR problem, not helping to perpetuate it.
Looking for more public relations and communications advice for commercial real estate projects? Download our free e-book.