ICSC New York: Retail real estate trends to watch in 2023 include...

A focus on new concepts, innovative leasing strategies, diverse tenants and experimenting with “exclusive” engagement strategies will keep real estate and store design projects on track in the coming year.

This was the message at the ICSC New York conference last week — ICSC’s first show in the Big Apple following a two-year hiatus. Real estate professionals gathered Dec. 6-8 at the Jacob Javits Convention Center ready to make deals and garner tips that will accelerate their business successes in 2023. 

Here’s what to expect in the coming year:

New concepts will expand brand awareness. Retailers that experiment with innovative design concepts are not only representing their brands in new ways, they are providing experiences that drive consumer engagement. Whether featuring pop-up locations, store-within-a-store installations or small format stores, experts suggest that designs should be bold, bright and vibrant enough to attract shoppers — and keep them returning.

“New concepts are living marketing messages and we will continue seeing more of these physical spaces in 2023,” Dana Kelsey CEO and chief research officer, Telsey Advisory Group, said during the session, “Retail Reset: Marketplaces Industry Trends.”

Leasing opportunities will continue to evolve. There has never been more flexibility for retail tenants when it comes to lease options. Landlords are offering shorter term leases, and working more closely with tenants to ensure their success. 

“Leasing is the most robust it’s been in years, and ongoing success will depend on tenants and landlords working together as partners,” Lauren Holden, executive VP and COO, Shopcore Properties, said during the event’s “Managing Your CRE Portfolio During Times of Uncertainty” session.

Short-term leases are expected to become most valuable for retailers pursuing pop-up activations. Whether it is an established retailer or a digitally native company dipping their toe into physical retail, pop-ups will continue gaining traction.

“These ‘marketing billboards’ — and short-term commitments — give retailers the confidence needed to be more aggressive and drive value beyond just merchandise,” said Ethan Chernofsky, VP marketing, Placer.ai, at “The New Consumer: 2022 Traffic Patterns & Beyond” session.

A “shake-up” in tenant mixes will attract new shoppers. The best way to build consumer traffic — and excitement — is to reinvent properties. This includes diversifying tenants, adding supermarkets as shopping center anchors, and focusing on mixed-use centers and adaptive reuse of space.

“It’s all about what will bring in consumers,” explained Barrie Scardina, regional president, Northeast, executive managing director and head of retail services, Americas for Cushman & Wakefield, during the “Downtown Reboots: The Future of Retail and City Centers” session.

“Hot tenants to add to the traditional retail mix are fitness, health and beauty, wellness services, digitally-native brands, luxury tenants and urgent care — for consumers and even their pets,” she added. “Landlords should be analyzing traffic patterns and communicating with shoppers to learn what void they need to fill, what will best bring people together and of course, how to mitigate risk.”

Lessons learned from online operations will drive in-store experiences. Delivering “an exclusive experience” ensures a brand will rise above marketplace “clutter” and differentiate themselves from competitors. That’s why it’s never been more important to experiment with how to bring unique online services to store-level.

For example, thanks to social media platforms including TikTok, Instagram, Snapchat and Facebook, among others, short form videos have become ubiquitous. Get in the game by positioning front-line employees as brand ambassadors and “feature them as your brand’s influencers,” advised Nisha Yadav, senior VP, omnishopper lead, Behaviorally, during ICSC’s “The New Consumer: 2022 Traffic Patterns & Beyond” session.

“This is heating up in China and we will see this hit North America in 2023,” added Yadav.

Another option is to revisit popular “appointment only” shopping times that evolved at the height of the pandemic.  When store capacity was limited, retailers like Best Buy enabled shoppers to make an appointment to visit the store, noted Placer.ai’s Chernofsky.

“Prior to the visit, they researched merchandise, and selected preferred items they wanted to shop. It showed intent,” he added. “Why not offer this service during non-peak times to drive additional traffic? The key is to refer back to what worked before, learn from it and tweak it to engage shoppers.”