Friday, January 19, 2018
Business

Brick-and-mortar stores can still thrive in Internet age, conference members told

ORLANDO — The trip to the store isn't a thing of the past, even as more shoppers go online to make their purchases.

That was the message from Brad Hutensky, chairman of the International Council of Shopping Centers, speaking Monday at the trade group's Florida conference at the Gaylord Palms Resort and Convention Center.

Hutensky told an audience of more than 2,000 shopping center industry leaders that brick-and-mortar stores must adapt to today's changing technology but still have a dominant place in the retail arena. Hutensky is president of Connecticut-based Hutensky Capital Partners, a real estate fund management group that provides capital to underperforming centers.

"The store will change, but it's not going away," he said. "Whenever there is change, there is opportunity."

Traditional stores offer advantages that online retailers don't, he said. They provide instant gratification without the wait of shipping. They also satisfy our craving for human contact. Who asks a friend to meet them at a computer to do some shopping online? he asked. People go to the mall to socialize and have an experience.

Traditional stores facilitate returns more easily than online vendors, which require that items be shipped, often at the buyer's expense. Traditional stores also accept cash, an increasingly popular form of payment as people look to pay down their debts or stay within their means.

Hutensky said not all products are equal in the eyes of consumers. Shoppers might go online to buy a hoodie, but they are less apt to purchase an expensive suit that needs alterations. You can't get a haircut over the Internet. Or buy an ice cream cone.

Good retailers go on the offensive, he said. He pointed to the recent partnership between luxury retail chain Neiman Marcus and discounter Target to sell the same limited collection by American designers this holiday season. To fight against showrooming — in which shoppers check out an item at a store, then buy it online for less money — some retailers are posting competitors' prices right on the shelves.

Hutensky thinks Best Buy and other big-box retailers will continue to shrink their stores. That will create opportunities for shopping centers to bring in new tenants and allow stores to open multiple locations within close proximity, adding more convenience for customers.

The most retail activity will happen at existing centers, not new ones, he said. Eighty percent of U.S. shopping centers are more than 15 years old, he said, warranting widespread renovations.

Hutensky's comments came at a time when many retailers are cautiously optimistic. Retail sales were up 0.8 percent in July after three months of decline.

Lee Arnold, chief executive of Colliers International Tampa Bay, described the retail market as lethargic but with signs of improvement. Shopping center landlords are busy negotiating leases, but consumer confidence remains weak.

"If we're not at the bottom, we're bouncing at the bottom," he said during the conference. "It's going to take a while for the customer to feel more comfortable. It appears we're on track for a slow recovery."

For evidence of a gradually improving economy, officials pointed to the conference attendance. More than 3,300 people registered, an increase of 10 percent over last year. The council has 55,000 members worldwide.

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