Green It Like You Mean It: A Guide to Sustainable Retail

Green roof on Oculus Inc. designed bank in Chicago IL

Anyone who has ever visited an upscale mall or lifestyle center is aware of the overwhelming symbolism of the green marketing movement in American retail: fruits and vegetables with organic stickers are viewed as a higher class above their produce peers, hybrid cars are a status symbols to millions of American commuters, and strategically placed recycling bins indicate that no piece of waste shall be considered just trash. Businesses across the United States have latched onto these environmental symbols and turned them into marketing tools.

But just like any marketing campaign, shoppers have grown weary of messages that treat environmentally friendly buzzwords like an infinite resource. According to a recent article in the ICSC publication Shopping Centers Today (SCT), consumers have gained “sustainability smarts” and are able to spot a greenwashing (the phrase given to when companies use PR and marking spin to deceptively try and fool you into believing that are greener that they actually are) attempt when they see one.  

A building may have solar panels, compact florescent bulbs, and a slick banner and greenwashing ad produced by an advertising agency, but that just doesn’t seem to cut it anymore. In fact, if a company promotes its green efforts and research proves they were fabricated, the backlash can be detrimental.  Many are starting to view such measures as mere window dressing to what companies could be doing in their sustainability efforts.

The consumer resistance to corporate greenwashing may lead certain developers to thinking that the “going green” phrase is as frivolous as Crystal Pepsi or the Budweiser Frogs. But there are plenty of reasons why developers need to pick architects, engineers, and interior designers who are well versed in the latest green and sustainable design methods if they want to maintain a profitable property. Research conducted by Oculus presents several key reasons why developers need to Green It Like They Mean It:

• With the new construction projects in a lull, building owners, property managers, and tenants are looking towards sustainable renovations and retrofits as a way to add value to their existing retail portfolios. A 2007 study conducted by Davis Langdon discovered that a LEED building sold for a $171 per square foot premium versus comparable buildings without LEED Certification.         

• The CoStar Group recently found that rent rates in LEED buildings were on average $11.33 per square foot greater than non-LEED buildings. LEED buildings also have higher occupancy rates which increase the marketability of projects and create opportunities for developers to maximize their return on investment. All together, rent rates increase by 3 percent total and occupancy rates by 3.5 percent in sustainable buildings.

• The construction industry makes up about 40 percent of the material found in landfills. Fortunately, there is a new market emerging with recycling options for original flooring, millwork, doors, and structural timber that is both cost effective and sustainable. Today, recycling no longer refers to the process of melting down and reconstituting raw materials, but also includes reusing and reselling materials. With the right combination of alternatives, it is possible to divert 90 percent of existing building materials from the landfill and create a profit from them.

• Besides attracting new customers into retail purchasing situations, green design and sustainable strategies are also linked with increased worker productivity and health benefits. Any business looking to increase the workflow of their staff, reduce the amount of sick time taken, and decrease the amount of money they spend on healthcare related expenses would greatly benefit from the inclusion of green design elements into their new building or renovation. 

According to SCT, some of the most effective methods of sustainable building such as lighting, HVAC, water, and energy projects are not as visible as the previously mentioned methods and easily sneak past consumers.  On the other hand, some consumers are becoming more informed than ever and are drawn to companies that stand for sustainability and corporate responsibility. In order to effectively latch onto the proper promotional power of sustainability without the greenwashing backlash, it is important to spread information through proper communications channels such as social media and in-store signage.

Instead of focusing on sustainability and “going-green” as a marketing tactic, architects, engineers, interior designers, developers, and consumers need to accept it as another, important step of the design and construction process.  When green becomes an authentic part of the design and build cycle instead of a marketing slogan, consumers receive an education in ways to realistically help the environment while developers naturally increase their own profits.  

Nieman Marcus, Macy's, and Major League Soccer

What is a city to do with a mall that has essentially turned into a miniature ghost town? The most sensible solution is to turn it into a soccer stadium…

The Riverfront Times reports that the new owners of fledgling Union Station Mall, Lodging Hospitality Management, are considering turning the sparsely populated retail space into a stadium for a Major League Soccer franchise. The once modern hub for the railroad industry, was converted into a retail space in the 1970's when planes and automobiles proved to be more convenient. While it is unknown if this proposed conversion would lead St. Louis residents to MLS games, the chances are a lot better than suburbanites venturing to Union Station for a unique shopping experience.

For years the mall has been relegated to kitschy tourist shops and a couple of chain restaurants designed to entice out-of-town dollars. Locals have very little incentive to go unless they work at a building next door and want to eat lunch at the Hard Rock Café or Landry’s Seafood.

The lack of businesses occupying the Union Station Mall is not a problem facing St. Louis alone. Many once prominent shopping centers in major U.S. cities are losing retailers who once based their sales strategies on consumers visiting the mall not just for shopping, but also entertainment.

One of Oculus’ Market Leaders recently attended the ICSC 2012 Chicago Deal Making Conference where directors of real estate from some of the largest retail companies in the country met with municipality leaders, building owners, and vendors to network in an open-air free-for-all in order to get projects off the ground. While discussing the latest real estate trends with industry experts, the consensus was that more money was going into making higher-end retail locations better while focusing fewer resources on expansion into markets without as much opportunity for profit.

Nothing like a an deal making conference in Olde Tyme Chicago!

This trend is not just common in St. Louis, where suburban sprawl has taken money out of the city and into the suburbs, it is happening to malls throughout the country. Instead of shopping at large retail anchors like Sears and Macy’s, big box stores like Target and Wal-Mart offer better variety at lower prices. Malls have lost a lot of their luster as variety shops because the Internet makes it possible to purchase virtually anything.

Instead of investing in traditional mall locations, most real estate directors opt to develop in higher end malls because of the high income bracket population surrounding the area. The construction of new mall buildings is also becoming a relic of the past because of the growth of lifestyle centers in upper-end locations which provide drastically better dining and entertainment services compared to large malls.

Right now it might sound far-fetched to turn malls across America into soccer stadiums, but in the coming years when people start purchasing more goods online they will want to have a “shopping experience” when they actually do visit retail centers. Unless consumers are willing to travel to the "ritzy" part of town and want to put down primo dollar on high-end fashion brands, the retail trend may continue to go towards Wal-Mart, Target, and Amazon for middle-class Americans. The real question that should be occupying the minds of developers is if America can actually get into soccer?