How retail is bringing shoppers back for more

Above: Scottsdale Fashion Square has turned its north entrance into its main, luxury entrance. Real Estate | 31 Jan, 2017 |

Why someone returns to a store or shopping center can be hard to peg but most shoppers want stores to be a hub for convenience and entertainment where experiential retail merges with things to do outside of shopping.

According to a recent Coldwell Banker Commercial Affiliates survey, shoppers still value traditional brick-and-mortar shopping experiences. In fact, nearly half of Americans prefer to make purchases in a store instead of shopping online.

Commercial real estate professionals are exploring ways to facilitate the perfect customer experience through two emerging trends in the retail industry — experiential retail and destination making.

“We’re seeing that Americans still value in-store retail experiences in an increasingly e-commerce world, but brick-and-mortar retailers will need to embrace aspects of online shopping and invest in experiential retail to drive traffic in-store,” says Fred Schmidt, president and chief operating officer of Coldwell Banker Commercial Affiliates.

Case in point, the iconic Scottsdale Fashion Square and Macerich’s announcement in December for a phased project to further enhance the shopping center. It will consist of renovations to the mall’s luxury wing and incorporate high-end residential units, class A office space and hospitality in the area.

For more than 50 years, Scottsdale Fashion Square has made a name for itself as a one-of-a-kind retail destination and top-performing shopping center in the Valley.   

Today, with four anchor department stores and more than 200 shops and restaurants, Scottsdale Fashion Square is one of the premier shopping destinations in the country with total annual sales exceeding $650 million.

“The best centers are constantly adding new retailers and restaurants, exciting new consumer experiences and physical upgrades that make shopping there even better,” explains Scott Nelson, senior vice president of development at Macerich. “As an industry, we need to keep giving shoppers reasons to shop in person, and a great way to do that is to keep adding enticing experiences they can only get in physical settings.”

With that in mind, plans at Scottsdale Fashion Square call for a new dramatic, high-visibility arrival point off Goldwater Boulevard, creating a grand entry into the luxury wing, which will be flanked by sweeping, two-level luxury flagships and an internationally acclaimed restaurant with spill-out café seating.

Construction will begin in 2017 with completion slated for fall 2018.

Macerich is also planning the addition of mixed-use elements at Scottsdale Fashion Square on a seven-acre parcel immediately north of the mall that reaches from Goldwater Boulevard to Scottsdale Road.

The plan will incorporate high-end residential units, class A office space and hospitality uses to extend the customer base and sales potential for retailers within the shopping center.

“When customers visit a mall they want much more than just a place to buy things; they want memorable experiences,” says Nelson. “Retail properties that not only offer great stores, but also deliver on the experience front with everything from small conveniences to big amenities, are in high demand.”

The luxury renovation and added mixed-use elements will supplement key investments in other aspects of the shopping center, including refinements and updates to the contemporary wing anchored by Nordstrom and the property’s entertainment/young fashion wing anchored by the new Harkins Theatre. Plans also include the addition of new restaurant and food offerings at the 1.9 million-square-foot Scottsdale Fashion Square.

Nelson says, “The strong growth in Scottsdale and Greater Phoenix creates a climate where adding more density and new uses surrounding Scottsdale Fashion Square makes a whole lot of sense.”

Looking at past projects, Macerich identified that enhanced performance at its shopping centers coincided with mixed-use expansion.

He pointed to Tysons Corner Center — a 2 million-square-foot mall in Northern Virginia — as an example, which like Scottsdale Fashion Square was a retail powerhouse with the best stores.

Macerich developed a vertical, mixed-use expansion including a 22-story trophy office building, a 300-room Hyatt Regency hotel and an upscale 429-unit residential building.

Not only are the mixed-use elements at Tysons themselves performing well, says Nelson, but the expansion also benefited retailers by extending the built-in client base with sales per square foot up 20 percent over the past five years.

He foresees similar results at Scottsdale Fashion Square once the renovations and mixed-use additions are completed.

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