At last month’s RECon global shopping center industry event in Las Vegas, Phillips Edison & Co. held more than 1,500 meetings with retailers. In stark contrast to news reports of bleak conditions in the retail business, the overall mood was positive, according to Mike Conway, head of Phillips Edison’s new emerging trends team. Many retailers were excited to discuss new strategies and store modernization concepts.
“The retail industry at large continues to step up their game,” Conway said in a recent interview with REIT.com..jpg)
Phillips Edison is a sponsor and management company for two public non-listed grocery center focused shopping center REITs, with more than 340 shopping centers. Late last year, Conway moved into the company’s newly created position of vice president of national accounts and retention. He leads a team tasked with tracking emerging retail trends, attracting and retaining new merchants, and strengthening existing retailer relationships. The team’s goal is to align retailers’ growth plans with Phillips Edison’s portfolio.
Like many in the retail real estate business, Conway believes the sector is at a pivotal point where innovation and adaptation are essential to success.
Adaptation to Remain Dominant Theme in Retail
Even as e-commerce continues to grow and retailers are shuttering stores in waves across the country, Conway is still optimistic that brick-and-mortar retail real estate will survive the changes. He admits that the shifts have been a jolt to the sector’s system, though.
“Today, only 12 percent of retail sales are online, and I firmly believe that the well-positioned centers and retailers with an omni-channel strategy will continue to thrive. But it’s also a lesson that we can’t sit back anymore,” Conway says. Constant adaptation is likely to be the dominant theme in the retail sector for the foreseeable future, he adds.
Given the changing state of retail, the rise of e-commerce and, most recently, the pending Amazon-Whole Foods deal, Phillips Edison has implemented a cross-functional strategy. Each line of business is responsible for researching current trends and changing shopping patterns. They’re also focusing on innovation and future opportunities for the company’s managed real estate portfolio.
Additionally, to foster its relationship with existing tenants and to create new relationships, Conway and his team have created a program focused on national tenant accounts and emerging retailers. The program has created a list of 170-retailers nationwide that are attractive to Phillips Edison based on their creditworthiness, resistance to e-commerce, anticipated growth and ability to drive foot traffic to shopping centers. Conway’s team schedules visits and biweekly calls with many of the retailers to discuss their growth strategies and how they can work together.
“Landlords and retailers are partnering to create a one-stop destination. E-commerce has yet to penetrate the experience side,” Conway said. “That’s really what we’re spending more time focusing on.”