The view from of The Maryland Party at the Encore Beach Club.

Attendance and anxiety were noticeably on the rise at this year’s edition of the 2017 International Council of Shopping Centers (ICSC) RECon event in Las Vegas, as developers, retailers and restaurant operators alike attempted to make sense of the continued march of on-line buying, while also trying to invent ways to inject new enthusiasm into the bricks and mortar shopping experience. Pointing to the more than 37,000 (up from last year) attendees, ICSC leaders continued to express public confidence and optimism in the industry, while also recognizing the underlying “caution ahead” tone that seem prevalent among participants. Many indicated a prime goal of attending this year's conference was to "find out where the industry is headed and what can be done about it."

Howard Perlow, Commercial Settlement Services and Maryland Governor Larry Hogan

John Ginsburg, Floors, Etc.; Connie Rhodes, Rhodes Development and Danielle Beyrodt, Hill Management Services

Andy Segall, Saul Ewing; Heather Segall and Matt Lenihan, St. John Properties

Jay Noddle, President of Noddle Companies in Omaha, Nebraska neatly summed up the feelings of optimism when speaking at a seminar Monday morning. “I have been doing this a long time, and it seems as if our industry hits an insurmountable brick wall every ten years or so,”Noddle told the group. “There seems to be no solution to the problem and then, suddenly, retail seems to remake itself and everything works out. The problems are different each time and so are the solutions. My confidence about the strength of the industry remains intact. What we are experiencing is just another bump.”

The Maryland Party

The Continental Realty Corporation team: Kristina O'Keefe, Paul Kang, JM Schapiro; Melissa Sweeney; Blake Dickinson and Kelsi Bozel

Trouble brewing in the food category?

One day later, five experts in the food industry tried to make sense of a category that was long-considered Internet-proof, but doesn’t seem like it now. “This is a stressful time to be in the restaurant business,” explained Ryan Esko of Smokey Bones Bar & Fire Grill. “In tracking our same-store sales at locations throughout the country yesterday, we learned that we posted increases in the six to eight percent range. That is solid. However, our mall locations were down approximately twenty percent and we are trying to figure out why. If someone in the audience is here from The Cheesecake Factory and can offer some help, we would gladly accept it.”

"Consumers are increasingly ordering their food for home delivery, and no one should discount this trend or take it lightly," stated George Banks of Revel, a consultant to the restaurant and hospitality industry. “Americans are naturally lazy and food delivery plays right into this lifestyle,” he added. Restaurants can leverage this situation by jumping on the bandwagon, but many are choosing not to play along. Some are scared away by the steep costs charged by delivery services (approaching 30% according to one speaker on the panel), while others fear their loss of control of the food product (arriving cold, damaged or unsightly) once it exits their restaurant. This opens the door for national companies that specialize in food delivery, which continues to hurt local restaurants.

“A few years ago, restaurants only needed to be good to survive,”Esko added. “Today, restaurants consistently need to be great. Consumers are becoming increasingly comfortable with delivery models and this growing popularity bears watching.”

One panel away, a discussion about food halls demonstrated the explosive growth occurring in this sector with the market size expected to double by 2019, with more than six million square feet under roof. “The popularity is due to the emergence of food that is uniquely American, the presence of The Food Network, and immigrant families that have established customs in this country,” explained Nick Giammarco of Studio H2G. “Food Halls are anchors themselves,” he added.

Joel Simon, LifeBridge Health; Drake Zaharris, PK Law; entertainer at Great Gatsby-themed party; and Susan Woodin, PK Law

Ryan Coudon, Plano-Coudon Construction; Donna DeMarco, The O'Ferrall Group; John Hermann, Corporate Office Properties Trust , Elisabeth Wainwright, The O'Ferrall Group and Tim O'Ferrall, The O'Ferrall Group

Next trend: the showrooming effect

Jay Noddle explained the showrooming concept to a panel discussion entitled “Attracting the retail store of the future to your community now.” It starts with six (or so) retailers leasing 2000 square feet of space within the same space (a reduction from the 20,000 to 30,000 square feet of space each retailer would typically lease in a shopping center or mall). Each store has virtually no product inventory on hand. Instead, consumers visit with the intentions to purchase, say, a new suit jacket where they are promptly sized and fitted by an apparel expert. Once the purchase is made, it is shipped to the consumer 72 hours later from another location.

“One significant benefit of this concept is that inventory is not housed in spaces that cost approximately thirty-four dollars per square foot,” Noddle explained. “Instead, all product is warehoused down the street in space that costs eight dollars per square foot. Plus complementary groups can be linked together so, after buying a suit jacket, the consumer can next buy shoes. This is also working extremely well in the appliance and electronics sectors."

Baltimore rising

Baltimore Mayor Catherine Pugh touched upon a wide variety of pressing issues including the need for more grocery stores in the downtown market, the expected impact of Port Covington, and the view of Baltimore from around the country.

Pugh mentioned several months ago at a business event about her “agenda for attending the convention which included attracting more supermarkets, theaters and sit-down restaurants to the city,” a point she reiterated to the audience that numbered nearly 400. “Whole Foods is expanding downtown, but we need more grocery stores for our residents. Mondawmin Mall needs help. It is important to understand the trends that are occurring in the retail industry, examine the demographics that are moving downtown and find ways to attract more retailers to Baltimore,” Pugh explained.

“I love to shop and I believe people want more experiences when shopping,” she continued. “We need to make it more compelling to visit downtown and shop.” Throughout her presentation, shiny images of Port Covington, Inner Harbor East, Mustang Alley's and other real estate projects flashed on large projection screens behind her. “Port Covington will be transformational,” she added, while adding depth about the project to RECon participants that attend the show both nationally and internationally.

Lessons from Barbara Corcoran

Barbara Corcoran

Famous nationally for her appearances on the Emmy Award-winning television show “Shark Tank,” residential real estate executive Barbara Corcoran functioned as the Tuesday luncheon keynote speaker at RECon, while tracing her successes and, most importantly, failures in building a powerhouse brokerage company in New York City. “I am extremely happy for the opportunity to talk real estate to a real estate group,” she began.

Corcoran continues to be driven by the comment her business partner and live-in partner - Ramon Simone - made to her, after she announced her intentions to split up their residential brokerage agency (this was precipitated by Simone’s decision to start dating Corcoran’s secretary, after kicking Corcoran out of the house). “You will never make it without me,” he announced (spoiler alert: she did, big-time). “Whenever my new company was on the verge of failure, I remembered that comment. It drove me to think of one new idea to get over the hump,” she said. “That moment and that comment motivates me to this day.”

Corcoran explained that she gravitates to salespeople that “never feel sorry for themselves when they take a hit but, rather, bounce right back up and are ready to do battle again immediately.” She explained that she is especially good at failure and actually thrives on it. "When things are at their worst, I am at my best. I also generate competition within my company because I have found that this culture drives people to greater heights.”

She described the two different types of employees as well as the need to attract both to build a successful company. “Expanders are people full of big ideas and constantly look for ways to sell and grow," Corcoran said. “Every successful company needs these high achievers. But, great companies also need containers, as this grouping of people make sure things don't jump off the tracks, because they tend to control the smallest details of the organizations. Together, they form a check and balance system that works.”

Perspectives from Steve Wozniak

Steve Wozniak

Monday luncheon keynote speaker Steve Wozniak, co-founder of Apple, offered his thoughts on the shifting retail industry and how to react. He believes the coming of the self-driving car will “reduce delivery costs as it relates to large truck shipments, as well as the automation contained within the vehicle that will perform loading functions.”

“Every time change is inevitable, you need to listen and watch how young people are reacting to these shifts,” he said. “Then, emulate what they are doing. What young people say, will impact the retail industry. I noticed that millennials don’t like owning things – such as cars and houses. The process of innovation should create a culture that, in turn, drives innovation upward. I always demand that the Chief Disruption Officer of any company not report to the CEO but, rather, to the Board of Directors so they can consider change.”

Larry Lichtenauer, President and Founder of Lawrence Howard & Associates, Inc., a full-service public relations and marketing agency, reports three times each year from ICSC events.