Ceramic Mugs to Stay, Paper Cups to Go and More Customer Experience Moves on Starbucks’ Mind

Starbucks, the coffee shop powerhouse founded in 1971, is returning to its roots. New ICSC chair Angele Robinson-Gaylord, senior vice president of store development for the Americas at Starbucks, said during a fireside chat with ICSC president and CEO Tom McGee at ICSC New York that her company is emphasizing a “stay here” experience under new Starbucks CEO Brian Niccol. Starbucks leaders aim to ensure “that we have warm, welcoming, inviting locations” that lean into the chain’s legacy and convince customers to “linger,” Robinson-Gaylord said.

Over the next year, she said, Starbucks’ “stay here” approach will be “coming to life” from a design and operations perspective that takes into account furniture and material choices, order efficiency and the five human senses while still catering to to-go and mobile-order customers. Robinson-Gaylord noted, for example, that those looking to linger in a coffeehouse would enjoy ceramic mugs over paper cups. In addition, she said, Starbucks will simplify its menu while also “elevating” it. “We are taking a little bit of a pause,” Robinson-Gaylord said, “and reducing the number of new stores and renovations to give us an opportunity to redesign [our] experience, to bring that forward to all of you.”

When Zoning Requires Retail

Participants in two Wednesday sessions at ICSC NEW YORK had thoughts on zoning that requires retail space in new residential or office projects.

Dave’s Hot Chicken senior vice president of real estate Dannon Shiff said during the Advancing Retail in Communities panel that ground-floor retail isn’t always “the highest and best use” of space in new residential properties. In the fast-casual chain’s headquarters city of Pasadena, for example, a lot of ground-floor retail space at residential projects sits empty “because there’s not the demand in every instance to have retail underneath residential,” Shiff said. Fellow panelist Larisa Ortiz, managing director of public nonprofit solutions for Streetsense, added that cities need help figuring out alternative uses for ground-floor spaces that might not be ideal for retail tenants.

In the Retail as the Anchor session, CBRE executive vice president Charlie Coyne said landlords shouldn’t treat shops on the ground floor or elsewhere in residential and office projects as “token” retail demanded by zoning rules. Rather, he said, coupling retail with residential or office should be propelled by “the critical mass that really drives traffic.”

From the vantage point of mixed-use owner and operator Stenn Parton, the “potency of retail” means quality over quantity. During ICSC NEW YORK’s Retail as the Anchor panel, the Prism Places founder and CEO noted that the “mall of the past” might have contained about 1 million square feet of retail space, including two to four department store anchors that served as customer magnets. He suggested that 21st-century retail landlords must recruit “the right brands,” likely occupying less square footage than typical department store anchors, to draw consumers regularly. Retail brands, Parton said, are now “looking at the modern-day retail landlord as they looked at the department store in the past,” as merchants that provide access to consumers.

Fellow panelist Brandon Isner, Newmark head of retail research, echoed Parton. “You definitely have to curate the retail,” he said, “and I think where a lot of the malls went wrong is when the tenant base became a little bit too stale.” Retail centers these days should supply a tenant mix that delivers an experience, said Isner. To that point, Parton’s firm is working on retail projects in which roughly one-third of the gross leasable area consists of food-and-beverage tenants. “People don’t have to shop every day, but they do need to eat,” Parton said.

Isner noted retail “is the only commercial property type where we choose to spend our spare time.” Parton inferred that any activity that fulfills that need is the business of the retail and mixed-use real estate industry. “People love to sit down and have a beautiful glass of wine or a cappuccino, come and work, meet a friend. … We’re in the business of competing for people’s time and money.”

Keep an Eye on “Pet-Tail” Concepts

Overheard at ICSC NEW YORK

A sampling of the social media buzz as ICSC NEW YORK attendees took in the scene at Javits Center and across New York City:

Strip Mall Guy at ICSC NEW YORK
New York Through Anjee Solanki’s Meta Glasses
ICSC Creators Network Recap
Casey Calhoun’s Favorite ICSC NEW YORK Panel and More
5 Questions With ICSC’s Tom McGee
Sarah Malcolm’s Gratitude for the City That Launched Her Career