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A Changing Retail Streetscape: Rethinking Shopping Center Parking Lots

A recurring theme of this blog is that e-commerce, mobile devices, and evolving technology are changing the retail landscape. It seems that technology shifts are also poised to change the retail streetscape. More particularly, changes to the design and use of retail parking lots seems inevitable, and a significant opportunity, as shopper habits and preferences change.

Changing shopper habits and preferences are showing up in the ways shoppers travel to and from retail centers. On-demand delivery, curbside pickup, drone delivery, Uber, electric vehicles, and—perhaps in the not-too-distant future—autonomous vehicles are upending the traditional distribution model. If the traditional model looked something like this: a shopper parks as close as possible to a store, goes inside, picks up and pays for wares, and takes those items back to the car before returning home, then the future could involve perhaps a half-dozen or more variations on that structure.

The changing transportation and distribution model for retailers opens up a host of possibilities regarding store design and layout. A significant opportunity also exists outside the store in the vast seas of parking that accompany so many shopping centers. The primary commonality in the changing world of how shoppers interact with brick and mortar retailers is that shoppers need less parking. For example, of those shoppers who have their goods delivered to them at home, or who pick up goods curbside, or who arrive in an Uber, none require a parking space. As a result, significant portions of existing parking lots can be put to more beneficial uses, which can be an opportunity to generate additional revenue streams and rethink the placemaking (attempting to capitalize on local assets to create appealing and unique places where people want to live, work and play) strategies for shopping centers.

Macy’s appears to be an early mover in seizing on this opportunity. As reported in the on-line journal Modern Cities, Macy’s executive Doug Sesler, executive vice president for real estate acknowledged that a Macy’s store no longer requires the typical 20 acres of parking it sought when its stores opened in the 1970s and 1980s. Today, Macy’s is looking to develop portions of its existing parking lots into outparcels in part to shore up its balance sheet.

Removing or altering the physical parking landscape raises a host of challenges and questions:

  • Does a landlord (or a department store that owns its own parking lot) have the right to redevelop parking into occupiable space under either tenant leases or the reciprocal easement agreements that so often affect a shopping center? What kinds of obstacles do zoning regulations and loan documents present?
  • In the case of a department store with its own parking, is the department store capable of undertaking a redevelopment? Does that create undesirable competition from the landlord’s perspective?
  • What is the “right” balance of parking, curbside loading, electric vehicle charging, amenities, additional retail areas and placemaking?
  • Does the visibility from the street of easy and available surface parking matter as much to customers as the sense of arriving at a “place”?

None of these questions have straightforward answers, which means there will be plenty of opportunity for innovation and adaptation as consumer preferences and habits continue to shift.

Related topics: Retail, Retail Sales, Technology, Transportation