Palisades Village

LOS ANGELES — Developer Rick Caruso envisions in the future a mother driving her two sons to a shopping center and being able to pull up to a reserved parking spot, the center’s bakery knows how she takes her coffee and whether her kids want hot chocolate and she’s sent notifications about her favorite stores.

It’s part of a storyline scenario the founder and chief executive officer of Los Angeles-based Caruso Affiliated has created of what his centers could look like in the future, and the establishment of the Strategic Development and Innovations division at the company will help move that vision along as it looks to stay ahead of the pack.

“I’ve been a firm believer, and I think it’s playing out to be true, that you have to give the consumer every reason to be shopping with you because they have so many choices,” Caruso told WWD. “Put aside online retail for a minute. For years our company, we’ve talked about creating a great experience on our properties and we’ve talked about how retailers have to create an experience within their four walls and I think it fell on deaf ears for a while….People have so many options and their time is so limited, that you have to give them a compelling reason to be with you. You can’t be lazy about it.”

Matt Middlebrook, who was promoted to executive vice president of strategic development and innovations, leads the new division. Middlebrook is based out of San Francisco, with a team being assembled to focus on what think tanks, technology companies and thought innovators are doing when it comes to technology and how it relates to consumers at retail and in everyday life.

“The goal is to understand tomorrow today,” Caruso said.

It’s synthesizing technologies such as beacons, sensors and driverless cars with consumer insights gleaned from big data to look at it from a macro perspective rather than looking at technologies piecemeal.

Caruso said the company has had conversations with Google, Amazon and Jack Dorsey at Square and “those conversations are moving forward.”

“The real beauty that these companies provide is information,” Caruso said. “They’re really gatherers of information because of the source of customers that they have.”

Caruso said it’s still early when it comes to talking specifics or if anything is being tested.

The new division is also charged with scouting out young, innovative companies that could be potential investment opportunities for Caruso.

It’s a way of maintaining a competitive edge in a market rife with choices for the consumer who is forcing, not just retailers, but the properties they’re sitting in, to step it up and innovate or risk being left behind, the developer said.

Caruso, who was in Nantucket on family vacation, mused about what retail developments look like in the future, saying emotional connection and relevance are crucial in appealing to not just Millennials but all visitors to a center.

“Everything about [future development that works] affects all of your senses and that is the problem that indoor malls have,” he said. “As much as they can tell you they can make themselves productive, they’re on a race to the bottom because they don’t have the connection with people. Fifty percent of mall stores are absolutely either useless or they’re duplicates of what’s next door to them.”

In fact, the company is now banking on its future Palisades Village project to be a testing ground for technology. The Pacific Palisades project sets out to breathe new life into Swarthmore Avenue, bringing in new boutique retailers, restaurants and a park.

The project is slated for completion in 2018 with demolition beginning this month. It could very well be one part of a complex answer to the question being asked industrywide of what’s next for retail.

“The goal is that all of the stuff that we’re learning [with the strategic development and innovations team] gets incorporated into the Palisades,” Caruso said. “It will be the first place in the country that will display the best and the brightest of thinking and technology in the consumer experience. We’ve written a whole story on how somebody will experience that technology….That’s going to be, really, a test and we’re going to be making that project available to some of the greatest technology companies around.”