On June 7, Jodie McLean, Chief Executive Officer of EDENS, spoke with a group of about 20 ULI Full Members. Jodie discussed the history and current operations of EDENS, and the disruption in the retail industry. EDENS was founded in 1966 as a grocery store chain in South Carolina. Jodie joined the company in 1990 and led the growth of the company until the present time. The original funding for the company came from State of Michigan investment funds. From 2011 to 2013 the company’s assets grew to $5 billion, and in 2017, the assets are around $6.2 billion.
Creativity and intuition are the company’s operational keystones and they focus on the highest quality locations possible. Jodie stressed that EDENS doesn’t just build retail centers but their focus is primarily on building community. Each center in their portfolio offers an experience ach one of our centers offers an experience thoughtfully crafted by mixing the best of local merchants with complementary regional and national offerings. They work within a model that allows them to make decisions quickly and nimbly. They use real-time data to inform their management teams to continually expand the center’s operations to respond to the community.
The focus of each center is on an area within a 17-minute drive, and much of their marketing and retail mix is geared toward women because they make about 90 percent of retail buying decision. Their goal is to have customers come to their centers 3.5 times per week and spend five hours there shopping, eating, and being part of a community experience. EDENS had meetings with 625 retails at the 2017 ICSC conference and will cull their choices of tenants to those who will enhance their corporate goals of community engagement. Their centers operate in the high 90s occupancy throughout their portfolio. While creating experiences drive the centers, EDENS is highly disciplined around operations, and, as a bottom line, their centers are still capitalistic endeavors focused on making money for their retailers and themselves.
EDENS entered Union Market in 2007 and the very first thing they did was get the hard conversations out of the way up front by working with ANCs, the Office of Planning, and the voice of the community to develop a small area plan. D.C. citizens wanted a strong voice in the project and EDENS worked with groups, including the local churches, to make decisions up front rather than negotiate and make changes during project development. Union Market has become a huge tourist destination an about 20-30 percent of visitors are tourists. Events, especially those focusing on the arts, bring in large, diverse groups, and when people feel good, they open their pocketbooks. Sixty-two percent of base rent comes from credit tenants, twenty-two percent are nationals, and about 15 percent come from locals who provide the loyalty and endearment within the centers.
A new 20,000 square foot Latin Market is being planned at Union market. The local Latin population base is growing very fast, and EDENS is focusing their efforts on attracting that segment of the population. The project is being done in partnering with the embassies from Latin America; EDENS will provide the retail and the embassies will be a creative partner that provides art and entertainment to enliven the project. Embassies are eager to highlight their countries, and this will tap into their creativity and local cultures.
While retail disruption is not a new phenomenon because retail always evolves to meet consumer demand, the pace of change is different than it has been historically. Jodie sees the divide between the retail “haves” and “have not” as growing in the future. Those who will have opportunity will have a great deal of it, and those who don’t meet the demand will fade fast. She believes that ecommerce is complementary to brick and mortar spaces because only 20% of purchases are made through online sales and the consumer is in total control of how they buy goods. People come to centers for experiences and to make connections at the local level. Jodie talked about how shopping experiences are competing with other ways that people can spend their time, like participating in and viewing sports.
Jodie doesn’t think about generations (Baby Boomers, Millennials, etc.) but about life stage. Most people want the same thing now, and don’t want to collect a lot of “stuff” but want to have experiences. Some retailers are getting it; Perch, for example, sells appliances but lets people experience their products, not just look at them. The future of department stores and malls is not important to EDENS and they won’t be distracted by the major changes in these product types.
EDENS is built around its people and their diversity. Diversity in age, race, passions, etc. mirrors the customer base and it’s important to hear all points of views when putting together concepts for places. Everybody’s voice is heard at EDENS and there is a lot of respect around the table that includes a lot of healthy discord. The employees outperform other companies because of their passion and imagination about what can be done in a community. Gender balance is important, and the company encourages sponsorship, not just mentorship, to build a great work force.