Retail e-volution

By Kitty McConnell
Photos by Tim Johnson

Retail is an evolve or die business. The city’s oldest and newest retail shopping destinations are staying competitive in an industry defined by fluctuating market forces, consumer whims and rapid technological advances.

See also:
A brief history of Columbus’ shopping centers

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From Downtown to suburban ‘town center’

Don Casto, III at Casto's Town and Country Shopping Center

There was a time when shopkeeping was a noon-to-5 weekday occupation. That all changed in 1949 when developer Don Casto, Sr. opened Town and Country Shopping Center on Broad Street east of Downtown Columbus.

One of the nation’s first regional shopping centers, Town and Country represented a “significant risk” for its founder, says grandson Don Casto III, a partner with Casto, the third-generation real estate and development company that owns and operates 46 plaza shopping centers in Central Ohio alone. “It was a testament to his sales ability that he was able to convince retailers to abandon their traditional focus on Downtown and try this new experimental retail location.”

Lazarus, which held a near-monopoly on Columbus retail at the time, “fought all efforts for suburban shopping centers,” including rezoning measures and infrastructure improvements, says Casto. In the post-WWII market boom, retail was fiercely competitive.

Casto Sr. personally persuaded merchants James Cash Penney (founder of the JCPenney Company) and S.S. Kresge (founder of the five-and-dime chain that grew into Sears Holdings Corp., parent company of Kmart and Sears ) to open locations in his new development. Town and Country was home to the first suburban JCPenney store in the nation; Mr. Penney himself attended the opening.

Casto Sr. offered Penney, Kresge and his early tenants commitment-free leases based on a percentage of their Town and Country sales. He further convinced lenders to finance the project based on speculative revenue rather than the assured collateral of set lease premiums. But Casto Sr.’s biggest innovation was convincing his retail tenants to stay open on evenings and Saturdays.

A great believer in the potential of night-time and weekend shopping, Casto Sr. equipped Town and Country with the first illuminated parking lot and large, illuminated store signs.

“People were used to shopping Downtown at Lazarus and Morehouse Fashion. They understood how to park Downtown, they understood how the stores were laid out. Somehow you had to break that cycle of shopping,” says Casto III. His grandfather drew people to Town and Country with over-the-top promotions. Free entertainment—everything from wrestling matches to traveling circuses—attracted droves of shoppers to the new center. 

Today, Casto’s suburban shopping strips are anchored by a mix of big grocery stores, discount and smaller retailers rather than large department chains. The model, exemplified in Lennox Town Center, Graceland and Carriage Place shopping centers, allows Casto to renovate its centers as market trends and retail tenants change. That flexibility is limited to some degree in enclosed shopping malls. Flexibility and tenant diversity also insulates Casto centers from the risk of big box consolidations and bankruptcies.

“It’s much easier to buy on the Internet than it is in a retail brick-and-mortar store...there are fewer stores and smaller stores than there were before,” Casto says. A variety of restaurants, service providers and grocery anchors give shoppers an incentive to leave their laptops in favor of a multi-dimensional buying experience.

Retail titan Les Wexner has done as much to transform modern shopping centers as Casto did in the ’40s. Wexner’s visionary Easton Town Center development was a blow to struggling regional enclosed shopping malls.

“Les’s vision was rooted in the understanding of what was happening to the shopping mall business back in the early- to mid-90s,” says Adam Flatto, president of Manhattan-based Georgetown Co., joint venture partner and co-developer of Easton Town Center.

With thousands of Limited Brands stores in shopping centers across the country by the 1990s, Wexner saw shoppers visiting enclosed malls less frequently and for shorter periods of time. The new regional malls that had excited shoppers in the 1960s and ’70s had become stale. Wexner surmised that consumers had lost a crucial emotional connection with the shopping experience, says Flatto.

“He understands the consumer and the business better than anybody in the country,” says Flatto. “His goal was not just to create something wonderful for Columbus, which he obviously did. It was to demonstrate to the entire retail industry that one can think about a regional shopping destination in a very different manner.”

In 1999, Easton Town Center debuted phase-one of what is today a $225 million, open-air shopping development. Its 180 stores, restaurants, recreational and entertainment options attract over 21 million annual visits from shoppers a year. With an urban, pedestrian-oriented layout, Easton revolutionized shopping mall development. Like Town and Country, Easton was a risky proposition for established retailers when it debuted.

Easton was, at the time of development, located in a greenfield with no direct highway access to a city that wasn’t a major draw for high-end retailers. To top it off, the plans for Easton called for only two anchor department stores rather than the five-plus anchors that are standard in enclosed malls.

“It was very risky, because it was such a departure from the way tenants normally look at equations for deciding whether to go to a place,” says Flatto. “A department store is a critical and important component of fashion retailing, but augmenting it with food (and nightlife) gives customers a reason to come to the project more than they ever would otherwise.”

The variety of tenants paired with a lively line-up of seasonal and special activities have helped Easton prosper even as more and more consumers fill their shopping carts online. Traffic is rising, sales are improving and Easton is 99-percent leased.

“What we’re seeing more on a national basis is a bifurcation between those projects that have achieved that level of connection with their consumers…and all other projects where that’s not achieved. (Those projects are) really suffering from the e-commerce business,” says Flatto. “Without that connection, it’s just a bunch of stores, (and) I can access that same merchandise online.”

Columbus’ once-dominant Northland, Westland and City Center malls were all shuttered in the new millennium in the wake of the successful Easton Town Center and Polaris Fashion Place developments. And the lone survivor of Richard Jacobs’ suburban mall chain, Eastland, is now slated for auction in early June by current owner, Glimcher.

Both of the newer developments feature high-end retailers, some of whom have only one location in central Ohio. “To this day, Easton and Polaris are the two dominant malls. Each of them has a unique character about them,” says Chris Boring, analyst and owner of Boulevard Strategies retail consulting firm.

Polaris Fashion Place has evolved to include a newly developed outdoor shopping plaza attached to the main mall. Opened for business in 2001 by developer Herb Glimcher, Polaris Fashion Place has what Boring describes as a “country-club feel.” Polaris brought new high-end anchor stores to the central Ohio market, including Saks Fifth Avenue, Lord & Taylor and its replacement, Von Maur. The mall continues to evolve, having renovated its main valet entrance in addition to the $50-million-plus outdoor wing.

The high-end shops in the main Polaris development are complemented by surrounding restaurants, salons and a movie theater. “Things that you can’t do at home are incredibly important,” says the original developer’s son, Michael Glimcher. He stresses the importance of continually updating Polaris’s upscale grounds as a complement to its mix of high-end tenants and social offerings. Polaris’ sales top $500 a square foot, making it a top performer in the national retail-property market, he says.

“(Retail development is) art and science. It’s about experience, so we spend a lot of time thinking about experience and programming the experience,” Glimcher says.

The role of the shopping center today, he insists, is to deliver the infrastructure and support that allows a retailer to maximize its competitive edge in what is now an omni-channel marketplace. “We’re bringing people to the door and they’re the content provider. We rely heavily on them.”                 

An Apple store can increase a mall’s total sales by 10 percent, Glimcher told the Dispatch in 2011. Although Casto shopping centers don’t have any Apple stores, Casto says the store is a prime example of an omni-channel retailer that reinforces its strong Internet presence with equally strong brick-and-mortar locations. “They really complement each other and are symbiotic,” says Casto.