Chic communal spaces and an aesthetic that borrows from residential design were key to DJM's reimagining of Lido Marina Village.

As retail continues to undergo a massive transformation, real estate developers are working closely with companies and brands to meet renewed consumer demands for memorable and distinct shopping experiences.

This requires creating shopping destinations that include fashion and specialty apparel brands as well as more dining and spa options. Stenn Parton, chief retail officer at DJM Capital, also sees community building as key to creating compelling shopping destinations.

The cofounder of men’s wear brand Apolis, Parton has over a decade of experience in “retail brand building” and development as well as leasing and acquisitions. At DJM, Parton leads the firm’s experiential and mixed-use retail efforts, which includes developing a vision and strategy for each project. Recent projects include Pacific City and Lido Marina Village as well as the current repositioning of Runway in Playa Vista, Calif., and the Bella Terra in Huntington Beach, Calif.

Stenn Parton  Courtesy image.

Parton has worked with brands such as Elyse Walker, Nobu, Equinox, Le Labo, Aesop, Bungalow, Sephora and Warby Parker. Here, Parton discusses the current retail landscape and how brands can respond to market challenges.

WWD: The commercial retail market has undergone seismic shifts. From your perspective, what are the most significant challenges facing retail?

Stenn Parton: Despite an alarming number of retail bankruptcies and store closures over the past two years, brick-and-mortar retail is not going away anytime soon. According to recent ICSC figures, 70 percent of adults in the U.S. visited a mall or some other type of shopping center between Nov. 1 and Christmas Day in 2018. This includes 81 percent of all Millennials, a group with substantial purchasing power who have never known a world without online shopping. From my perspective, engaging a mobile-oriented, multichannel urban consumer is the greatest challenge for retail right now.

WWD: What are the necessary elements that comprise a successful retail environment?

S.P.: As a developer, the most critical component for success is always community. Fostering community through desire, design and experience is really at the core of our strategy.

And it really begins with identifying a story-worthy location. We look for places with a rich history, a built-in community and a strong link to the past.

For instance, at Lido Marina Village this meant reimagining marina-side bungalows in Newport Beach and converting the location into a chic destination for dock-and-shop retail and dining. Similarly, for Pacific City, our team developed a lifestyle center around the home of surf culture, Huntington Beach, right on Pacific 1 with unobstructed views of the ocean.

Curating an appropriate tenant mix to drive desire and discovery is also essential. We are lucky enough to have incredible relationships with leading-edge lifestyle brands and digitally native brands like Warby Parker, Aesop, Le Labo, Elyse Walker, Equinox, WeWork, and Clare Vivier. Helping digitally born brands translate into brick-and-mortar is a sweet spot for us. According to real estate firm JLL, direct-to-consumer brands are expected to open 850 stores in the next five years. That’s an opportunity for any commercial developer that understands a web-first consumer.

In addition, we have upgraded all of our projects with top-tier lifestyle brands complemented by strong food and beverage concepts that draw the community in and get them to stay. Some of our partners, like LSXO, Bungalow, Malibu Farm and Nobu, are fully integrated into our plans from the very beginning.

Smart, localized design plays a huge role in everything we do and has proven to be a key element in our success. Today’s multichannel shoppers value the look and feel of a place. They are not looking to replicate an e-commerce experience. For example, at Lido Marina Village we actually hired a residential architect to ensure that the project retained a human scale. At Pacific City, we let the sea views pour in, providing access to the ocean through the use of natural materials.

Story-worthy settings set a foundation for any project. For Pacific City, it’s the ocean and surf culture of Huntington Beach.  Courtesy image.

WWD: What about gathering spaces that are not focused on a particular retailer?

S.P.: Community space is more essential now than ever before. We strive to let our commercial properties serve as town squares where people want to stay. At Runway in the Playa Vista neighborhood in Los Angeles, we committed the cardinal Southern California sin of closing the property’s main street to traffic in order to create a large public space that will be the platform for our experience programs. Lido Marina Village is sprinkled with chic lounges for socializing and decks for everything from live music to free weekly yoga sessions. At Bella Terra, in the heart of Orange County, we are installing a sprawling outdoor square complete with a grassy lawn that will be ringed with eateries, and capped with a clock tower and intimate stage for programs and live music.

A rendering of the new public space at Bella Terra, which will anchor programs and new food and beverage concepts.  Courtesy image.

WWD: What role do events and activations play in your strategic vision?

S.P.: The public spaces at our properties have been designed explicitly to drive memorable experiences and create community. From rock concerts and panel discussions on sustainability to networking sessions for women entrepreneurs, our properties are committed to creating a community of guests. We want to give area residents a reason to come to the properties every day and create attachment and buzz. As Jeff Bezos says, “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”

WWD: How are shoppers responding to your strategy?

S.P.: Our initial 2018 figures are a remarkable testament to the staying power of our properties and the concept behind experiential retail. While some retail centers are vast vacant shells of themselves, our numbers really tell the story. At Runway, we saw an 18 percent increase in foot traffic and a 12 percent increase in sales after just one year. Similarly, at Lido Marina Village we saw a 32 percent increase in foot traffic over the past 12 months while Pacific City is on target to hit a 24 percent increase in projected sales. Clearly, our strategy is working for guests, shoppers and tenants.

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