Tuesday, March 15 2016
 By Thomas McGee, President and Chief Executive Officer, International Council of Shopping Centers The U.S. shopping center industry is at its strongest in years, due in part to an improving economic picture, especially as it pertains to consumer spending possibilities. This is seen through robust growth within the industry, which saw year-over-year indicators reach historically-strong growth rates by the end of 2015.
The International Council of Shopping Centers (ICSC) and the National Council of Real Estate Investment Fiduciaries (NCREIF) reported strong property data results for year-end 2015. Metrics across the board increased nicely:
According to the U.S. Census Bureau, the value of shopping center construction, including work done on both new and/or existing structures, reached $17.2 billion in 2015, which is 5.8% higher than 2014. Contributing to some of this success has been excellent planning on the part of developers, who have effectively managed the The major themes of new and enhanced centers are due to the increase of more experiential offerings, like artisanal eateries and entertainment emporiums, as well as the addition of technological advancements that improve the customer journey and overall shopping experience including complimentary Wi-Fi, beacons, same-day delivery, and concierge programs. Smaller format shopping centers are looking to elevate their convenience and value proposition by adding more services into the tenant mix and finding increased synergies amongst their tenants. Retailers and shopping center operators also continued to adjust to the new realities of an omni-channel retail world last year, and many are emerging stronger than ever, as they become digital players in their own right. The challenge for 2016 is to perfect cross-channel and mobile strategies, providing a truly seamless and integrated experience. With more resources than ever before, today’s consumer is poised to make better and more informed purchases. One trend that is gaining traction is the surge in click-and-collect purchasing, which brings online shoppers in-store. This was especially evident over the holidays when physical locations received a flurry of traffic due to fulfillment needs. Omitting shipping and handling woes, brick and mortar locations boast a priceless advantage over e-commerce: the opportunity to touch, feel, and try merchandise. ICSC found that the vast majority (76 percent) of consumers who utilized click-and-collect during the 2015 holiday season purchased additional items when picking up in-store. Around 93 percent of retail sales occur in physical stores and retailers that have a physical presence capture over half of all online retail sales, meaning that at least 95 percent of all retail sales are captured by retailers with a brick and mortar presence. Looking ahead, online sales will continue to occupy less than 10 percent of total retail sales by 2018 according to eMarketer. This is important to note as it further underscores the fact that despite torrid growth, e-commerce is not slated to overhaul physical retail—rather, the future lies in the convergence of the two. The story is no longer physical versus digital, but physical and digital. A strategic alignment between technology and real estate is allowing retailers to close the gap between e-commerce and traditional distribution networks, helping solve the “last mile” equation.
While the industry continues to progress to meet certain consumer needs, there remains an inherently social aspect of shopping. A central gathering place of commerce dates back to the ancient Greek Agora and replicating the concept of community and time spent with friends and family cannot be done digitally. Shopping centers are integral to the social fabric of their communities by providing a central place to congregate with friends and family, discuss community matters, and participate in and encourage philanthropic endeavors. Beyond pillars of the community, shopping centers are a source of economic development and opportunity. They are a significant job creator (1 out of every 11 jobs is directly related to the industry), driver of GDP (two-thirds of the $17.7 trillion U.S. GDP comes from consumer spending on goods and services), and critical revenue source for the communities they serve through the generation of sales taxes (nearly $141 billion) and the payment of property taxes ($24 billion). These taxes fund important municipal services like firefighters, police officers, school services, and infrastructure like roadways and parks.
The shopping center industry is essential to the economic, civic, and social vibrancy of communities both in the U.S. and around the globe. With that comes a sense of responsibility and opportunity to impact change. Thriving in the 21st century retail landscape requires the integration of communications, technology, customer service, personalization, delivery, warehousing, big data, and inventory—to name a few—something in which shopping centers have done an excellent job. So while today’s shopper often takes a multichannel journey, one thing remains certain; the physical store is at the epicenter of that process.
As CEO, his main focus is the advancement of the shopping center industry for the benefit of ICSC members world-wide. McGee believes that retail real estate is an industry central to economic development and opportunity and that shopping centers and the people that work in all aspects of the industry are a critical component of the social fabric of, and an economic engine for, the communities they serve. Prior to joining ICSC, McGee served as Vice Chairman of Deloitte, LLP, one of the world’s-largest professional services organizations, with more than 200,000 professionals in member firms in over 150 countries. During his 26 years with Deloitte, he held major global and U.S. leadership roles in addition to Vice Chairman, including, Deputy CEO, National Managing Partner of M&A Services and Global Chief of Staff. He was also a member of Deloitte’s Global and U.S. Executive and Operational Leadership Committees. A noted business speaker, McGee also has significant media experience, with appearances on CNBC, Bloomberg and Fox Business and is frequently quoted in national media outlets including The Wall Street Journal, USA Today and CFO Magazine. He is also active in numerous civic, charitable, and academic organizations. He is the incoming Chairman of Covenant House International, and member of the New York Catholic Foundation Board, as well as the Finance Council of the Archdiocese of New York and the Board of Regents of Loyola Marymount University, his alma mater. McGee lives in Basking Ridge, New Jersey, with his wife, Charlene, and their two daughters. He grew up in southern California, is an avid sports fan—he supports the Lakers—and is a huge fan of golf. |
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introduction of new development. At the same time, retailers are healthy again and looking to increase their market share through store openings. As a result, retailers are going into pre-existing space that is often part of redevelopment projects. 
New tech trends, communication channels, and entertainment options are being incorporated in shopping centers and consumers have a lot to anticipate as their shopping experiences evolve along with these trends. Experiential, omnichannel, convenience, customization, and personalization are a few recurring buzzwords from retailers and developers alike.
Bio: Thomas (Tom) McGee is the President and Chief Executive Officer of the International Council of Shopping Centers (ICSC). He was elected to the position of President and CEO on September 21, 2015, becoming only the fourth CEO in the association’s almost sixty-year history. 
