NEW YORK CITY -- Rick J. Caruso made headlines during the National Retail Federation's 2014 Big Show in mid-January here. Delivering an address to the assembled developers and retail executives, the founder and chief executive of Caruso Affiliated predicted the demise of shopping malls as we know them within just a few years -- unless the retail industry makes some fundamental and significant changes.
"I've come to the conclusion that, within 10 years to 15 years, the typical U.S. mall, unless completely reinvented, will be seen as a historical anachronism that no longer meets the needs of the public, retailers or communities," Caruso said. "I believe the rebirth of retail will come as developers, retailers and cities understand the retail paradigm of the future is based on something timeless and enduring. People want to engage and feel a sense of community."
For those in coin-op, especially amusement and bulk vending operators, and other vending industry segments servicing malls, the address raised a few eyebrows. Coming from Caruso, who heads one of the largest privately held real estate development companies, which includes two shopping centers in the top 15 in the world in sales per square foot, the address carried substantial credibility.
His speech -- "Reimagining Main Street: How Brick and Mortar Retail Will Thrive in the 21st Century" -- noted that there has not been a new indoor mall built since 2006, as well as a trend toward "de-malling" existing properties. Caruso called for nothing short of a rethinking of an American institution. According to Caruso, the traditional mall is dead. In its place, shoppers require human-scale, multi-use projects that provide a compelling retail experience. Part of this reimagining requires mall management to think of themselves as being in the hospitality industry, as well as the retail industry, in order to compete with online sales.
"The reinventing of the retail arena has been charted by a number of executives as customers change their buying habits," said Kevin Williams, a specialist in the digital out-of-home entertainment (DOE) sector, and founder of the DNA Association, a trade organization focused on taking public space entertainment into a new era. "What has been called 'retailtainment,' the ability to offer a strong play element to the shopping experience, will drive much of this thinking married with a new appraisal of hospitality into the mix."
This could provide good news for amusements, family entertainment centers and attractions providers. However, according to Williams, the coin-op amusement industry might be lagging behind when it comes to new concepts. He questions whether the current amusement industry is in a position to support and benefit from this new business opportunity.
"It is concerning how standoffish amusement is to be involved with the hospitality trade," said Williams. "I wonder if the current amusement trade is capable of embracing a 'retailtainment' approach, or if others will step in to take the lead."