LFRA Study Tour: Insights from the US
As a participant of the recent Overseas Study Tour, Business Develop Manager at Mainbrace, Craig Dunlop, was asked by the LFRA to provide members with some insight into the key retail trends that emerged from the recent US Study Tour. Mr Dunlop explores what we can learn from the US as an industry, as well as areas in which Australia takes the lead.
Retail trends in the US and what we can learn from them in Australia. This was the goal of the recent Large Format Retail Association (LFRA) annual study tour which I was privileged to attend.
What we noticed was a focus on experience. The integration of elevated food, recreation and entertainment offers. Centres becoming destinations with their own points of difference. We also experienced interactive carts, Kardashian malls and exotic turtles. These are just some of the insights and experiences we gained and it was exciting to see what could be in store for Australian retail. Here is a look at what we got up to.
Aside from wonderful sightseeing, baseball and American football games, delicious meals and a couple of spectacular pastrami sandwiches, the study tour was an engaging way to gain valuable insights into US retail and what could shape the future of Large Format Retail in Australia.
First stop was San Francisco, a place which loves an electric car, new tech, and Apple stores.
We began with a walking tour of Union Square, checking out Apple and Nike stores, as well as a Macy’s conversion. CBRE’s Matt Kircher provided a market update, where we heard about sky-high building costs, strong A-Grade leasing performance but subdued B- and C-Grade leasing. There’s a current re-purposing trend in big shopping centres and plenty of empty offices, a scene not unlike back home, albeit on a larger scale.
One measure of the popularity of Apple in San Francisco is the investment it makes in security. We visited a store which pays $150,000 per year to the police for extra security. It also employs two full-time security guards whose sole function is to look after aluminium panels on stairs.
The following day involved a visit to the very high-end luxury furniture retailer Restoration Hardware, complete with rooftop bellinis. We also popped into Health Ceramics and saw first-hand some of the sustainability initiatives which highlight its point of difference, while sampling the fantastic in-store bakery. Home Depot and Target were also on the tour list, both of which were massive in scale.
On Friday, we visited a Bass Pro Store, which takes the retail experience to the next level. Reminiscent of a log cabin, there are animals (and guns) in the foyer, murals throughout, an outdoor pond for fly fishing lessons, repair centre for boats, aquarium, bowling alley, archery range and bar.
We also took trips to Westfield Valley Fair and the Apple visitor centre, with its interactive model of the Apple circular building. On the day, the Apple Watch Series 8 was released and we saw first-hand the epic queues that line up.
Final stop in San Francisco was the state-of-the-art LinkedIn office, with all its employee perks. Massage service, hair and nail salons, free food and a very cool layout. LinkedIn was holding a ‘hackers’ night’ around the same time, a competition for people to actually try and hack into the company.
Next stop was Los Angeles where, we once again witnessed the sheer scale of US Large Format Retail.
The first day saw us at Amazon – an eye-opening experience. Here, customers fill their interactive carts around the store and then auto-pay with their handprint which they’ve pre-registered with Amazon.
The group also experienced The Lab, an alternative ‘anti-mall’ style precinct. We then visited the South Coast Plaza – think high-end Chadstone – as well as The Market Place in Tustin, a huge 165-hectare Large Format Retail estate which visitors need to drive to get around. They say things are bigger in the US and this is a case in point.
Tuesday began with a walk-through Downtown LA before Matt Garfield of FTI Consulting presented a market analysis to the group. He told us about sustainability, discretionary spending, high credit card debt and other trends, culminating in the question: is the US in a deep or shallow recession?
Experiential retail was on show again at Dick’s Sporting Goods, where customers can physically try out baseball bats in the in-store net setup.
Celeb spotting became a high possibility once we drove out to The Commons at Calabasas. This is a very high-end retail and entertainment complex – which I’m told is the local shopping centre of the Kardashians. Here, the rich apparently own turtles, and this shopping centre featured ponds for people to leave their exotic pets safe while they shop.
The Village at Topanga was similarly extravagant. It’s another very high-end centre with an open-air layout and a level of finishes unlike anything in Australia.
At The Grove in West Hollywood, Large Format Retail takes on a Disney feel. Built on the former LA Dodgers baseball field, there’s an on-site hotel, tram running through the outdoor mall, cinema and ultra-cool food hall. Century City in Beverly Hills also occupies a similarly re-purposed site, being the former home of Fox Studios. The story goes that, in the making of Cleopatra, the studio nearly went broke and had to sell off some of the site. Today, there’s residential apartments surrounding the shopping centre, some of which we were told rent for $80,000 US a month.
The LFRA study tour was a busy and insightful trip. It was exciting to see where retail is going in the US and do it alongside some of Australia’s leaders in Large Format Retail. The connections made and ideas shared made this a truly memorable experience.
