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Retail Law Advisor

Reverse Showrooming: A Look at the Other Side

Posted in Retail, Retail sales

In previous blog posts, we have covered developments in showrooming, the consumer behavior of browsing brick-and-mortar stores to evaluate a product before purchasing it online. We warned traditional retailers of this threat to in-store sales and suggested ways to combat the popular behavior. Although brick-and-mortar retailers may have seemed doomed by the prevalence of showrooming, recent studies paint a more hopeful picture.

The Data

“Reverse showrooming” (or “webrooming”) has actually been reported to be more common than showrooming. As the name suggests, reverse showrooming is the consumer behavior of researching a product online before purchasing it in-store. In a 2013 Harris Poll survey, roughly 69% of 2,000 American adults reported having engaged in reverse showrooming, compared to 46% for showrooming. Moreover, when a 2013 Urban Land Institute survey asked over 1,000 Americans ages 18-35 about their preferred way to buy electronics, shoes and cosmetics, more people responded that they preferred to reverse showroom than to showroom for those items. The survey also indicated that while showroomers spend an average of $174 when they make their ultimate purchase online, reverse showroomers spend an average of $204 when they buy in-store. These numbers should be encouraging to traditional retailers, suggesting that the balance may be tilting in their favor.

So where do reverse showroomers commonly begin and end their shopping experience? Perhaps not surprisingly, the online search usually starts with Amazon (the same destination where many showroomers end) and finishes at Walmart, Best Buy or Target (the same destinations where many showroomers begin). These shared destinations can be explained in part by the considerable overlap between the two groups – that is, many customers who showroom also reverse showroom, and vice versa. According to the same Harris Poll survey, nine in ten showroomers have reverse showroomed and six in ten reverse showroomers have showroomed.

Reasons Behind Reverse Showrooming

In general, understanding what drives consumers to shop the way they do is essential to any effective sales strategy. Some of the top reasons that reverse showroomers cite for buying a product in-store instead of online are: avoiding shipping costs; a desire to touch and feel the product; available inventory; and the ability to return the product to the store if needed. On the other hand, some of the top reasons people cite for buying online instead of in-store are: the availability of free shipping and online-only discounts; the lack of crowds and long check-out lines; and an easy-to-use website.

Lessons for Retailers

Armed with these types of data, brick and mortar retailers should feel better prepared to capitalize on reverse showrooming and attract sales to their stores instead of their competitors’ stores. Below are some suggestions:

  • Have a good inventory monitoring system in place. Perhaps this one is too obvious to mention, but if a retailer does not have the product, the consumer will buy it from another store that does, or forgo buying at a store altogether.
  • Create easy-to-use mobile applications and websites and set up in-store terminals that allow consumers to search for inventory, specifications, reviews, offers and coupons. Nielsen’s 2014 Digital Consumer Report estimates that 65% of Americans own a smartphone. And have no doubt that they will use it while in the store (even if they have already done some research beforehand). Great mobile applications/websites and designated terminals enhance the customer’s in-store shopping experience and keep the customer on the retailer’s own sites and content.
  • Incorporate digital marketing programs in the stores. For example, Target has a website and mobile application called Cartwheel which generates offer codes online for consumers to use in-store only. And last holiday season, Nordstrom arranged its in-store displays based on top items pinned on Pinterest, demonstrating that it was listening to its audience and ensuring that those items were in stock.
  • Integrate e-commerce conveniences with in-store ones. Online ordering and in-store pickup is a great example and one that more and more retailers are offering each day.
  • Offer convenient, easy and secure in-store checkout. Eliminate one of the top-cited reasons people avoid stores: long check-out lines.
  • Properly train sales staff. Many consumers still value having their questions answered by real human beings. In a 2013 Deloitte survey, more than half of respondents said knowledgeable in-store staff would make them more likely to buy in-store.

As the suggestions above show, the response to reverse showrooming should not be too different from the response to showrooming (after all, the two behaviors are far from mutually exclusive). As our virtual and physical shopping experiences become increasingly merged through technology and consumers constantly move back and forth between the two worlds, traditional retailers should take an omni-channel approach to satisfy as many consumer desires as possible.

Is Just-in-Time Scheduling Good for Business?

Posted in Employment, Retail

Ten years ago, retail managers created schedules for hourly employees using a paper, pen, and a working knowledge of the store’s busy periods and their employees lives. Now, in many businesses, computers create employee schedules. Known as Just-in-Time (JIT) scheduling or “scheduling to demand,” JIT scheduling closely links labor supply to consumer demand by relying on data such as floor traffic, sales volume, hotel registrations, dinner reservations, and even the weather. In doing so, managers can ensure that stores have exactly the right number of workers for each hour of the day. However, JIT scheduling puts heavy demands on hourly workers and their families.

As currently used, JIT scheduling often has the unintended impact of making hourly shifts unpredictable and employee hours vary from week-to-week. For instance, an employee may work forty hours one week and only fifteen the next. NBC News recently reported in “’Just in Time’ Scheduling Creates Chaos for Workers” that some employees never know what their schedule (or their paycheck) will be, which makes it difficult to manage childcare, arrange transportation, hold a second job, or schedule classes. Additionally, variability in paychecks and in hours worked can affect eligibility for employer-sponsored health-care benefits and government housing assistance and childcare subsidies, which require a certain minimum number of hours worked or weekly pay.

Aside from impacts on hourly workers, JIT scheduling can put a strain on managers as well. According to “Scheduling Hourly Workers” by Nancy K. Cauthen, “Managers are expected to reconcile conflicting priorities: meeting employers’ staffing guidelines and sales targets, providing good customer service, scheduling employees for sufficient hours, and “staying within hours” by constantly adjusting labor-demand ratios.” The increased complexity of managerial jobs and the resentment from employees who feel stressed by the unpredictability of their working lives is taking its toll on managers. Some managers respond by editing the computer generated schedule on their own time, and others feel frustrated that they can’t change the schedule to be more predictable and stable for their employees.

According to “Starbucks Vows to Change Unpredictable Barista Work Schedules” published in the Seattle Times in response to a New York Times report about the chaos created in a single mother’s life by JIT Scheduling, Starbucks is changing its scheduling policies. Schedules at Starbucks now must be posted at least one week in advance, and workers can no longer be scheduled for back-to-back opening and closing shifts. Although Starbucks announced the new policy change only a few weeks ago, it will be interesting to watch and see if Starbucks is able to provide more stability to its employees.

Although no laws currently exist regulating JIT scheduling, this issue has received a lot of media attention recently, and there are calls for legislators to take action to guarantee a minimum number of hours to each part-time employee, to require that employees be paid for a minimum number of hours if they report to work but are sent home, and to mandate that schedules be posted at least a week in advance. In light of Starbucks revising its JIT policies and the negative public attention JIT policies are receiving, retailers may want to revisit their scheduling procedures to create more manageable and predictable work hours for their employees before they are legally required to do so.

Mobile Retail Consumers – Text Me, Maybe?

Posted in Retail, Retail sales, Technology

As much as we all love clipping coupons from circulars (yes, they still do exist), searching through our emails for retail promotions, and, perusing websites, such as Gilt Groupe, for bargains, a new marketing trend is upon us that will forever change the way we shop and interact with our favorite brands. Thanks in large part to the boom in smart phone use, Retail SMS Marketing has emerged as the new kid on the block enabling retailers to reach their customer base in a direct, cost-effective, and personalized manner. In the same vein as subscribing to a company’s email list for promotions, Retail SMS Marketing is an opt-in service whereby customers receive text messages from retailers regarding new products and discounts. Rather than relying upon coupon marketers, such as Groupon, retailers now have the option of cutting out the middle-man and providing customers with mobile coupons directly via their smart phones.

The immediacy of text messaging coupled with the consumer’s ability to purchase products seamlessly either in store or on the retailer’s mobile website has markedly improved sales for some retailers. Text messaging allows retailers to inform their customers of sales and promotions in real time. And, as any marketing guru will tell you, instant action begets instant results. As more and more brick and mortar retail stores morph into show rooms and restaurants fall prey to “empty restaurant” syndrome, SMS Retail Marketing may be the perfect shot in the arm to bring consumers and foodies back to these establishments in droves.

Despite the virtues of SMS Retail Marketing, traditional promotion media such as television, print, and radio continue to reign supreme among traditional retailers who are loath to embrace this new marketing strategy. Although such reluctance may stem from fear of being too aggressive or annoying, consumers actually appreciate messages from retailers, especially in regards to discounted prices. Despite the apprehensiveness of some retailers, Retail SMS Marketing is gaining momentum in the retail industry among the fearless tech-savvy marketing managers who have developed nuanced strategies to realize its value. Some retail marketers have even utilized analytics to understand consumers’ shopping patterns to know when to send consumers personalized offers, and, more impressively, which items to discount to truly pique their interest. Thus far, targeted text messages have proven to be a highly viable means of increasing sales.

Let’s face the facts. Text messaging is the primary means of communication among younger demographics, and personally engaging with the customer is the key to improving the shopper’s experience, creating brand awareness and brand loyalty. Therefore, implementing text messaging into an overall promotional campaign would seem to be a natural choice. We truly are in a revolutionary period in the way brands interact with their customer base as they have become hip with the times and exploited the benefits of the smart phone. Michael Kors, text me, maybe?

Hostile Doesn’t Mean MEAN: Understanding Employment Law

Posted in Employment, Retail

Dealing with employees also means dealing with their misconceptions about employment law. This blog entry highlights some of these misconceptions and reminds employers of the significance of employment at will. Notwithstanding misunderstanding to contrary, it is still generally and genuinely the case that an employer can fire an employee for any reason or for no reason. The exceptions to this principle created by federal and state anti-discrimination laws are significant, but they do not trump the rule. Moreover, the laws make discrimination illegal. They do not create a code of conduct for the workplace or set a general fairness standard governing decisions by employers.

Let’s start with the general rule. Employees are employed at will. This means that an employer can fire an employee for any reason (performance or otherwise) or for no reason. Employees have the reciprocal right to leave their employ without notice and without reason. The notion is simple and, when clearly understood, functions to avoid unnecessary disputes and rancor. If employment at will governs a particular decision, there is really nothing to litigate about.

Title VII, click here for the statute, the principal federal law, and its state analogs (like chapter 151B in Massachusetts, click here for the statute) do not — rumors to the contrary notwithstanding — obviate employment at will. Instead, the laws make it unlawful to fire someone “because of” their membership in a protected class. Said differently, an employer can fire someone because she is not good at her job, but not because she is a she.

This concept doesn’t seem complicated, but it creates enough of a specter of litigation so that employers tend to be hesitant to fire people who fall within a protected class. Indeed, when they consult counsel about such terminations, employers are often advised that they need to be able to show the reason for the termination (performance, absenteeism and so forth) in order to have comfort that they will not find themselves engaged in lengthy and expensive litigation.

It’s good advice. Experience shows that employees often have trouble accepting that they failed and therefore choose to believe that they lost their job because of their age, gender, race, religion, or national origin (all protected classes). It is often easier for employees to believe that they were wronged than to accept responsibility for poor performance. So, employers should act cautiously when terminating members of protected classes and do so only when confident that they will be able to prove why they did what they did.

Things tend to get messier when employees misunderstand the law and trumpet that misunderstanding as if it were a legal right. In practice now, this happens most often with claims of a “hostile environment.” An employer can face liability for a hostile work environment if an employee is harassed as a consequence of his or her membership in a protected class. So, for example, a woman has a hostile environment claim if she is a victim of sex harassment (and the harassing conduct is both objectively and subjectively offensive as well as severe or pervasive).

Again, the concept doesn’t seem that complicated. The work environment only violates the anti-discrimination laws if it is corrupted by hostility targeted against someone (or a group of someones) because of their membership in one of the protected categories. Title VII does not, as the Supreme Court consistently notes, create a code of conduct for the workplace. Harris v. Forklift Systems.

But — employees (and some employers) think it does. Too many employees claim that a demanding or insulting supervisor has created a hostile environment by treating them badly. Because it makes linguistic sense, the idea sometimes has traction with employers. Recent attention to workplace bullying has magnified the problem. As a consequence, employers with a human resources problem (a difficult supervisor) may mistakenly believe they have a serious legal problem (a “hostile environment”). Indeed, calls to employer’s counsel sometimes start with the premise that the anti-discrimination laws have made incivility illegal. They have not done so.

The anti-discrimination laws have powerfully changed the workplace, but they have done so in a narrow and important way. It is unlawful to discriminate against an employee on the basis of his or her membership in a protected class. Moreover, harassment (in the form of the creation of a hostile environment) is a type of discrimination. These are serious laws, but they have limited scope. They make it unlawful to discriminate. Other than that, they do not in any way limit the principle of employment at will or require a level of civility in professional interactions. While civility between supervisors and employees may be good for business (and even right in an aspirational sense), it is not legally-mandated.

Employers would do well to remind themselves both of the power of the law and the limits of its scope. And to not listen to employees whose understanding is based on what they think the law must be. A proper understanding of scope and context can go a long way to minimizing workplace problems and consequential litigation.

Capturing the Millennial Market

Posted in Retail, Retail sales

The Boston Consulting Group reports that Millennials – people between the ages of 16 and 34 – are now the largest generational group in America (79 million) even exceeding the Boomer generation (76 million). Currently, Millennials make up 21% of consumer discretionary purchases (1.3 trillion dollars in direct buying power), and they wield a large (and intentional) influence on other generations as well. Capturing the Millennial market is anyone’s game at this point, since Millennials are currently in a transitional and exploratory time of life, but the window of opportunity to connect with this generation is fleeting. Forward-thinking retailers who connect and build brand loyalty with this generation now will be well-positioned in ten years when Millennials enter their peak spending years.

So, how do you reach Millennials? Advertising through traditional mass media sources (television, newspapers, and radio) often misses Millennials because, as the Wall Street Journal reports, they don’t receive their news and entertainment from these sources. For the most part, Millennials prefer time-shifted television (via Netflix, Amazon Prime, Hulu Plus, or DVR) over live television, rely on blogs, online publications, and social networking posts to access news and current events, and listen to music on their phones or subscribe to online streaming sources such as Spotify or Pandora. Furthermore, Millennials are aware that companies are mining their personal data and preferences, and they are resentful when marketing comes across as fake, forced, condescending, or irrelevant.

Here are a few tips about how to re-shape advertising, mall experiences, and brand loyalty to reach the Millennial market.

  1. Have Millennials come to you. – Create humorous, clever or challenging advertisements that Millennials will re-post for you and spread through their social networks, like these popular YouTube advertisements that went viral. Offer rewards for Millennials who share or promote your product on their social networking sites through “elite” membership status or discounts.
  2. Advertise to Millennials online where they already are. – Although this can be challenging because Millennials quickly abandon and adopt new media platforms (goodbye Facebook, hello Instagram, Snapchat, and Vine), the rewards are worth the effort.
  3. Avoid retailer-specific “apps” for mobile devices. – Millenials only actively use an average of ten apps regularly, and store-specific apps won’t be one of them. Save marketing dollars for a more effective advertising tool.
Mall Experience:
  1. Serve groups of shoppers. – Millennials shop in groups and consider the opinions of others more than other generations. Retailers should provide roomier store lay-outs and appealing places for companions to lounge, charge their phones, and offer advice to the shopper.
  2. Make way for men. – Male Millennials spend twice as much on apparel per year than men of previous generations, and this difference is consistent among all ethnic groups, incomes, and household types.
  3. Employ fashionable, knowledgeable sales assistants. – Millennials value sales associates who are trendy, wear store merchandise, and are able to offer fashion advice significantly more than their non-Millennial counterparts (45% of Millennials vs. 22% of non-Millennials).
  4. Integrate online and in-store shopping experiences. – Millennials will comparison shop, check prices, and research products while in the mall, so retailers should accept this and accommodate Millennials’ desire to incorporate their online habits with their retail shopping. Some retailers may even want to incorporate easy processes for picking up or returning online purchases or arranging at-home delivery.
Brand Loyalty:
  1. Articulate an authentic higher purpose. – Millennials want to know an organization’s mission, and they want do business with companies who believe what they believe. They would rather purchase a product (even at a higher price) if they know their dollar is doing something meaningful. Some recent advertising campaigns by Always – “Like a Girl” and Nike – “Lace Up, Save Lives” highlight brands communicating their beliefs.
  2. Interactive Marketing. – Brands must interact with consumers and allow them to be a part of the marketing with opportunities for user reviews or letting consumers vote on advertisements by providing an “unlike” button. Also, Millennials will “crowd-source” – tap into the collective intelligence of the public or one’s peer group – before making a purchase, so retailers should be prepared for that and monitor their online presence.
  3. Don’t slow Millennials down. – Provide loyalty rewards without a sign-in and offer easy promotional code entry. If it takes too long to buy a product, Millennials will abort before making a purchase.

Members of the Millennial generation are entering their peak earning and spending years, and retailers have an opportunity now to shape the shopping experience of Millennials to capture their share of the market.

Massachusetts Court Provides Helpful Guidance to Retailers on Attorney-Client Privilege with Outside Consultants

Posted in Liability, Retail

Attorney-client privilege refers to the legal rule that prevents communications between a lawyer and a client from being used in court. Courts have tended to keep the circle of the privilege fairly small. As a result, unintended waiver of the privilege, especially in the era of modern technology, is a risk. One way that the privilege is often inadvertently waived is through the inclusion of outside parties in communications with attorneys, or by disclosing attorney-client privileged communications to outside parties after the fact. Courts have held that these types of disclosures can waive the privilege. This results in otherwise confidential communications falling into the hands of an opposing party, as has happened to leading retailers.

A recent Massachusetts court decision provides helpful guidance to retailers who work with independent contractors such as brokers, project managers and public relations consultants. In some cases, these contractors may be involved in matters that become the subject of litigation. When that happens, the issue of protecting attorney-client privilege communications can be presented. Retailers must be aware that the inclusion of independent contractors in communications with the retailer’s attorneys or the disclosure of attorney-client communications to those third parties could potentially destroy the attorney-client protection and allow that information to be used in litigation. The recent Massachusetts case follows a line of court cases where courts have held that certain consultants can be included in communications with attorneys without breaking the attorney-client privilege. But the case also highlights the fact that this exception is a narrow one and parties need to proceed with caution when involving any non-employees in communications with a company attorney.

When an attorney represents a company, the privilege generally protects communications between the lawyer and the employees of the company. The recent Massachusetts ruling held that the attorney-client privilege could also extend to individuals who, while not technically “employees” of the company, serve as the “functional equivalent” of employees. The case addressed the question of whether the inclusion of a real estate broker, who was not an employee of the company, on e-mails with the company’s lawyer waived the attorney-client privilege. Following a leading federal court precedent, the court ruled that, in the particular circumstances of the case, the broker was the “functional equivalent” of an employee, and the privilege was not waived by including him on e-mails.

While the decision appropriately recognizes the complex realities of the modern business world, the court was careful to limit the scope of its ruling. The broker in question had served as the company’s exclusive leasing agent and real estate advisor for a number of years and had become “a key decision leader” for senior management. In the court’s view, it was critical that the broker had a “close, long-standing, pivotal role in the business transactions of the client company.” The court added, “Not all (or even many)” such consultants would meet the “functional equivalent” test. Therefore, the decision expands the scope of the privilege in Massachusetts, but also serves as a cautionary tale.

There is no guaranteed method for ensuring that a court will consider communications with a consultant to be covered by the attorney-client privilege. The decision will depend upon the role of the particular consultant within the company. However, businesses can take steps to bolster the assertion that a consultant’s communications should be covered. Those steps might include adding appropriate language to the consulting contract indicating that the consultant will assist the client in legal matters and interface with the client’s attorneys. Companies might also add language to their legal engagement letters, specifically identifying any consultants who may be necessary in communications with the attorney and stating that the parties will regard communications with those consultants as privileged. Companies should proceed with caution in this area, and seek specific guidance from their attorneys before routinely copying consultants on e-mails and other confidential communications.

A Study of Suburban Mall Redevelopment: the White Flint Mall

Posted in Development, Real Estate, Retail

A year ago we reported on the planned redevelopment of the 37-year old, 850,000 square foot, indoor shopping mall in White Flint, Maryland. The mall’s planned redevelopment into a 5.2 million square foot, walkable, mixed-use destination with access to an existing station stop on the Metro’s Red Line appeared to be part of a trend of mall conversions in the DC metro area.

However, shortly after the entitlements process for the redevelopment got underway, White Flint, L.P., the owners of the White Flint Mall (“White Flint”), faced its first serious legal challenge: Lord & Taylor, an anchor tenant, filed suit in federal court and sought to block White Flint’s redevelopment plans. Lord & Taylor alleged that the mall redevelopment violated a reciprocal easement agreement among the mall owner and the White Flint Mall’s anchor tenants and sought an injunction that could block the mall redevelopment for decades. Since our post last summer, White Flint has received some initially favorable results in its challenge from Lord & Taylor and has faced down additional opposition from another tenant thanks to sophisticated lease provisions.

Injunction Denied, Redevelopment Plans Continuing, Lord & Taylor Now Seeks Damages

So far, White Flint has successfully fended off Lord & Taylor’s attempt to stop the mall conversion. In December 2013, a federal judge sided with White Flint and ordered a denial of Lord & Taylor’s request to halt demolition of the mall. Lord & Taylor subsequently appealed that order to the Fourth Circuit Court of Appeals, and with demolition of the mall underway, Lord & Taylor sought a temporary injunction pending appeal. In March 2014, in another win for White Flint, a panel of judges from the Fourth Circuit denied Lord & Taylor’s temporary injunction request. However, the matter of the denied permanent injunction remains before the Fourth Circuit. Following its unsuccessful attempt to halt the mall redevelopment via injunction, in May 2014, Lord & Taylor amended its complaint and seeks an unspecified amount in money damages.

Sophisticated Understanding of Lease Advances White Flint’s Plans Despite Tenant Opposition

White Flint’s redevelopment plans received a strong boost in July of this year when a dispute with a tenant revealed that landlord-favorable lease terms gave the landlord considerable flexibility. Following Lord & Taylor’s suit, Dave & Busters, another mall tenant opposing the redevelopment plans, sued White Flint, alleging that the redevelopment plans violated the lease between the mall owner and the arcade-themed restaurant. White Flint responded that Dave & Busters, which opened at the mall in 1995 under a 35-year lease term, was in violation of the so-called radius restriction clause of its lease. (A radius-restriction clause prevents a chain retailer or restaurant from opening another store within a certain distance.) When its plans for the redevelopment were coming together in 2012, White Flint pointed out to Dave & Busters that another Dave & Busters location had opened in 2006 within the restricted area and that as a result the tenant was in violation of its lease. This violation proved to be the leverage White Flint needed to get Dave & Busters out of its space so that the redevelopment could proceed. When Dave & Busters sued and argued that the redevelopment violated the lease, White Flint raised the radius restriction violation. A federal judge agreed with White Flint, and ordered Dave & Busters to vacate its space within 30 days.

The plans for the White Flint Mall are an example of a mall owner responding to the changing retail landscape. White Flint’s experience with Dave & Busters illustrates that a landlord can find leverage through careful scrutiny of seemingly unrelated landlord-favorable lease provisions. Understanding these key points of leverage with anchor tenants and in-line tenants may become an essential component of refreshing or redeveloping decades-old suburban single-use malls.

Amazon Breaks Into the Top 10 Retailer List

Posted in Retail

Over the past decade, consumers have shifted their shopping habits from the “real” world (i.e. brick-and-mortar stores) to shopping virtually. Now for the first time ever, Amazon.com, the largest online-only retailer, ranks among the top 10 largest retailers in the United States. STORES, the publisher that compiles the annual report that looks at the combined in-store and online sales of retailers, stated that “the impact this Seattle-based behemoth has had on the changing face of retail is unmistakable.” Amazon is the only top ten retailer (a list that includes Wal-Mart, Costco, Target, Home Depot, Walgreens, CVS, Lowe’s and Kroger) to see double digit annual growth.

Amazon, whose U.S. retail sales rose 27.2% to $43.96 billion in 2013, wasn’t the only e-retailer to see significant annual growth. Overall, e-commerce grew 17% last year. Online sales helped boost or salvage overall sales for several traditional brick-and-mortar stores. For example, Best Buy’s overall sales fell 1.2%; however, it saw a 20% increase in online sales. Wal-Mart and Nordstrom both reported declining in-store sales, but saw an overall sales increase due to increases in online purchases. Companies who saw some of the biggest declines in annual sales were those that experts consider as having weak online presences.

According to Kantar Retail Chief Knowledge Officer Bryan Gildenberg, “Amazon’s rise into the top 10 is symbolic of a shift in U.S. retail towards a genuinely multichannel future. Retailers that command the Top 100 in the future will have an in-depth knowledge of their shoppers across their physical and digital touch-points, and they’ll all have to fend off Amazon’s game changing economic and operating model.”

Retailers have long fretted over the threat that e-commerce poses to their businesses. In an age where consumers rely more and more on their smart phones and tablets to make every day purchases, rather than driving to the nearest mall, it is becoming more and more important for traditional brick-and-mortar retailers to create strong online presences.

Sharing The Art and Science of Updating REAs

Posted in Development, Real Estate, Retail

Thirty to fifty years ago, regional mall development was a new frontier in retail real estate. Developers were often individual entrepreneurs who started in the business by developing small strip centers and then moving up to more complicated retail developments, such as enclosed malls, typically anchored by department stores. Reciprocal Easement Agreements (REAs) were developed to govern parties’ activities and protect their investments in this new shopping regime.

Much has changed since those early days of mall development. Confronted with the reality that many of these original REAs will be expiring in the near future, Developers and anchor REA parties are considering the benefits of updating their original REAs with a simpler form of REA that contemplates and addresses periodic redevelopment, a potential mix of uses of the shopping center, and updated technology and codes.

Goulston & Storrs Director and retail lawyer David J. Rabinowitz worked with Kathleen Dempsey Boyle of Pircher, Nichols & Meeks and Brad Syverson of JC Penney to publish an article for the American Bar Association’s Probate & Property. This publication covers the broad topics that must be addressed in today’s REAs, and strategies for building agreements that meet the strategic business interests of all parties to the development. We share this article directly with our Retail Law Advisor readership, as it is a topic we consider to be timely and helpful to the industry.