The Shape of Things to Come

Abstract

Until relatively recently, the dominant emphasis in retailing historically, has been very much on the tangible. Most recently, presently and expanding in the future, the intangible will be assuming greater importance over the tangible. This phenomenon is expressed in the expansion of services over products in the economy, the growing emphasis on spirituality over materialism, the increased emphasis on information and intelligence in products over their mass and physical attributes, and the growing role of information and communications technologies relative to manufacturing.Retail real estate in the twenty-first century will be a function of how a number of forces impact critical interdependencies between marketplace and market space. These include which stores will be dominant in terms of scale, style, and location; the role, ambiance, and competitive position of the downtown, or mall; and the accessibility, appeal, and pervasiveness of catalogue and electronic shopping.Inevitably, the economic fortunes of the real estate are a function of the economic fortunes of the tenants that occupy the real estate, not just the particular tenants but the class of which those tenants are a member. As retailers experience transformation in their businesses, the facilities in which those businesses operate are subject to similar transformational forces. But this consideration introduces great tension, for real estate inherently is a long-lived investment, a commitment whose financial performance is measured in the expectation of decades.Just as retailing’s shape will be ever evolving in the twenty-first century, so will retail real estate. Whereas once it was enough to be smart once in real estate, now those in real estate must be smart every day.KeywordsReal EstateWall Street JournalShopping CenterShopping MallDepartment StoreThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.