Episode 035 : 11/04/2021
James Cook, JLL
James Cook is the Americas Director of Retail Research for international real estate firm JLL. His research focuses on the retail real estate industry and delivers broad sector analyses for retail property markets in the Americas. With this intelligence, he produces industry-leading retail research. James also hosts the Where We Buy podcast where he discusses two of his favorite topics: retail and real estate.
Host: Ned Hayes and Ashley Coates
Guest: James Cook
Listen to every episode
Topics discussed in this episode
- What it means to be sustainable in commercial real estate while running an ethical business
- Generational differences when it comes to consumer needs and expectations and how that shapes the new retail experience
- Changes made in the retail industry during the pandemic, and the role technology played
- Predictions for the state of retail post Covid-19 including the resurgence of malls and experiential retail
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Ned Hayes [00:00:01] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile location smarter. Today, SparkPlug is happy to welcome James Cook to the podcast. James is the America’s director of retail research for JLL, where his goal is to build your knowledge of the ever changing retail real estate industry and help you stay ahead of the next phase of retailing. So in his research, he focuses on broad sector analysis of retail property markets. He also hosts that Where We Buy podcast. Welcome to the podcast, James.
James Cook [00:00:43] Well, thank you for having me, I’m really excited to be here, Ned.
Ashley Coates [00:00:46] Thanks so much for joining us, James. Will you start by telling our audience a little bit about you and how you arrived at where you are today?
James Cook [00:00:54] Thanks, Ashley. I feel like I had a weird job trajectory. I ran into so many people who are in research like me, so I’m a retail real estate researcher, which is pretty niche, right? So my job is to think about the future of retail with an emphasis on physical, the physical environment. And that can include e-commerce too, because those physically are in warehouses. So of course, I went to college for English literature. That’s right. There’s so many of us out there. And when I graduated, it was a time where I really wasn’t sure what to do with myself. But I found a job in research, being a research analyst and really using my writing skills, that’s how I got hired and just have been learning on the job and really been doing retail real estate research for over 20 years now. So sort of just like learning on the job today, my job takes me physically before COVID and now starting to happen again all over North America, working with real estate developers and retailers thinking about, you know what the future of their, you know, retail environment is going to be. So I speak a lot of conferences and the my team and I write a lot of sort of forward looking research and reports.
Ashley Coates [00:02:13] Fantastic, thank you for that. And you are currently America’s director of retail research at JLL?
James Cook [00:02:18] Yeah, that’s what I do.
Ashley Coates [00:02:20] Yeah. Would you tell us about the core mission of your company and the services you offer and also share what your role entails?
James Cook [00:02:28] Yeah. So JLL, first off, is huge. It’s funny because it’s not high, high profile. So not everybody’s heard of it, but we’re actually a Fortune 500 company globally. Or I should know this how many employees we have, but it’s a lot. And because of that, we’re in so many markets and so many businesses. The only common thread is kind of the built environment. So there’s people at JLL that will help you find an office space for your company or help you. You know, we have architects that design things and do layout anything except for single family homes were involved with all types of real estate. And then among that, my little niche is the retail group within JLL.
Ned Hayes [00:03:12] So the JLL website emphasizes that you know you’re a world leading, sustainable professional services firm that focuses on spaces, buildings and cities, and you have a vision called Building a better tomorrow. So that’s a that’s quite a mouthful. Can you wrap it for us a little bit more?
James Cook [00:03:36] Yeah. Well, we recognize that the built environment contributes a lot of carbon to the world right now, and we also recognize that one of the biggest challenges of the future is to deal with global warming and climate change. And so what we’ve committed to as a company is we have net zero goals for all of the buildings that we’re in. And I should have done my homework and told you what year it is. We do have a specific year where we’re going to reach net zero. And then the other cool thing is that all of our clients, we work with them about all their real estate. So as we’re learning expertise on how to do sustainable real estate for our own properties, we can also be doing that same stuff for our clients.
Ned Hayes [00:04:27] Well, I do want to congratulate JLL on, I guess it’s the 14th consecutive year for the world’s most ethical company award, so it must be a real validation of your kind of core values and your mission. How does the company keep earning that kind of achievement?
James Cook [00:04:42] Yeah. Well, I would say and I’ve worked at several companies over the years now. JLL has the biggest commitment that I have ever seen to transparency and the idea of being a meritocracy. And then also just the whole ethics component, it’s really hammered into us. Like this idea of see something, say something if you’re anywhere in the job, anywhere in the world and you see something that seems unethical you know, you can report it with zero repercussion. And I’ve seen it happen. Nothing major, but you know, small things. You know that another company somebody might not have felt comfortable about. There’s such a, you know, while other places I feel like have sort of a culture of, yeah, you know, it just kind of going along. I think at JLL, there is this idea that we want to really make the world a better place.
Ashley Coates [00:05:35] That’s really wonderful to hear. Can you expand on that in terms of what has happened in the business world regarding ethic recently, and how can retailers learn from JLL’s best practices in this area?
James Cook [00:05:48] Well, actually, and this is not my area of expertise ethics and business, but I’ll give it a shot. Yeah, I mean, I do feel like I mean, if you follow business news, you’re always seeing stories about companies taking shortcuts. I mean, the Theranos trial is going on right now that’s like the most massive example of all time, I think. And there’s this idea, and it’s been around for decades in the business world that whatever you want to do is justified as long as you turn a profit. And as new generations come into business, millennials, Gen Z, for whatever reason they’re and for good, there is a generational difference they’re sort of there a backlash against the Wall Street mindset, you know, and this idea that you can have two bottom lines, basically, you know, your profit and being good for the world. So I think because of that, as companies, if we want to attract the best workers, we have to be ethical and sustainable and what we do.
Ned Hayes [00:06:51] Well, you just mentioned a generational difference in your specific area of expertize of retail. Is there a generational difference in how people think about retail?
James Cook [00:07:02] Absolutely. Yeah, absolutely. There’s a couple of kind of cut offs I think the most important one in in retail research is the digital native versus digital non-native. And I really dance over that boundary myself and I’m a young Gen X. So I grew up without the internet yet kind of came into the, you know, when I was in college, we got the internet. So I’ve kind of got a foot in each world, and I think I feel like because of that, I can sort of empathize with both. But there’s expectations around customer service in retail that are different in how you want to interact with people. And it’s simple things like, for example, a luxury company, you know, dealing with a boomer consumer. Let’s say I just bought an expensive luxury good if, let’s say, I was a boomer and if they followed up with me on the phone, that’s 100% appropriate and that’s what I want. I want them to call me up and be like, hey, you know, we love having you as a customer and you rock and all this stuff, but I might not be comfortable with that if I’m younger, I might much prefer getting a text or maybe even a text is to personal, you know, like it’s I don’t even know if this is what, so there’s a lot of translating across generations that I think is going to have to happen.
Ashley Coates [00:08:23] Absolutely. Well, we’ve been talking with a lot of innovators in retail like ShopShops talking about things like live streaming shopping. Do you think that experience will dominate the future in retail?
James Cook [00:08:35] I think that it is a powerful component of the future of retail, but I don’t think it will dominate. I mean, only in the way that QVC and the shopping channel, you know, they were a niche. There were strong niche in the 80s and 90s, but it’s not like you’re going to get the majority of your retail spending through live streaming somebody. It’s more of an add on, I think.
Ashley Coates [00:08:59] OK, so what do you think will dominate then?
James Cook [00:09:03] So I’m going to go out on a limb here and say that even 20 years from now, I think the majority of things that are bought and sold are going to happen in physical stores. There is a strong percentage of sales that is now occurring online, and that’s going to grow. No doubt about it. But at some point, that has to plateau because there’s only so many things that can be appropriately sold online for a number of reasons. One is like when the internet first came out, e-commerce was seen as like the place where you could get that stuff cheap. And because of like VC dollars for many years, buying online was often cheaper because they would pay for shipping in order for you to be a customer. But now, if you’re to buy groceries online, you’re paying more if you want the quickest thing at the best price, the best way to do it is in person. That’s going to change a little bit, especially if you live in the cities. We’re seeing more and more micro fulfillment centers for different retailers opening up in urban locations. But a lot of people live in the suburbs and in rural areas, and on average, it still makes the most economic sense for the majority of retail selling to happen in the physical store.
Ned Hayes [00:10:16] So physical retail is incredibly important. We saw with the rise of Amazon, independent bookstores also started opening more locations. Those are curated special experiences that Amazon really can’t duplicate. So small retailers I see providing a niche specialty service. But what about malls? Do you think that mall spaces are retail graveyard or do you think they will be resurgent?
James Cook [00:10:43] I think that the answer is yes, and both of those there are really is it a tale of two malls out there right now? Over the past number of decades, we’ve seen the construction of a lot more malls than America needs. Where the most mall’d the country in the world.
Ned Hayes [00:10:58] Most mall’d country?
James Cook [00:11:00] Yeah, definitely. The malls per capita in the US is, yeah, we’re definitely head and shoulders above the rest of the world. We classify malls by quality, and the lexicon we use is like A, B, C and D and the D malls we’re not going to talk about, but the A malls, like the best malls that has the Apple Store and it has the cool new restaurant, and maybe it has some fun new virtual reality entertainment that you want to check out and the nice new movie theater people are continuing to go to those even now through COVID. Foot traffic to those is back to what it was pre-COVID levels in most cases. But then you got the quote unquote C mall, which is lots of department store because a lot of those have closed and is losing the in-line retail tenants. And it’s going to have to reinvent itself. So we’re seeing a lot of those transition to things like medical use, sometimes office use, sometimes like back office, like, all good real estate. So there’s some use for them, but the mall isn’t probably the highest and best use for a lot of those anymore.
Ashley Coates [00:12:04] We were actually listening to one of the episodes of your podcast, which I want to come back to the Where We Buy podcasts, but you interviewed Trevor Barron about taking over distressed malls, I think he called them, and using them for other purposes.
James Cook [00:12:19] Yeah. And Trevor, his company has this model where they wait until a mall goes bankrupt and then it goes back to the bank because they default on their loan and then they’re selling these malls for pennies on the dollar to whoever is willing to buy them because not a lot of people want to buy these malls. And then Trevor’s company and others is buying them very inexpensively. And then because they haven’t spent that much money on them, they can do all kinds of creative stuff. And Trevor, is these exploring all kinds of stuff, he’s doing medical, he’s going to do like this creative office like co-working concept. He’s got a lot of great ideas.
Ned Hayes [00:12:57] So the podcast was really intriguing to us. Can you tell us more about Where We Buy a podcast? How did this get started and who’s on it?
James Cook [00:13:05] Yeah, so the show’s called Where We Buy, and the name is an inside joke that I think is funny. There’s a famous book called Why We Buy?
Ashley Coates [00:13:16] Have that book!
James Cook [00:13:17] Which is, Yeah, everybody’s got it, it’s by, it’s by Paco Underhill. It is the number one book in the world about retail. Everybody should read it. And at the time, I was like, Well, I’m interested in Where We Buy the physical places Where We Buy. So terrible name should have called it the retail real estate podcast or something that people would have known what it was about. Anyway, that was a number of years ago, maybe three or four years ago. Now our whole reason for being is to talk to fascinating retail experts and also to visit retail places, which we haven’t done since COVID. But we’re about to get back into that. So we’ll do audio tours like we’ll go to, say, 5th Avenue in New York and walk up and down the street and talk about it as we go. And it’s really fun that for people who aren’t able to go there to listen in and kind of be along with us on that, we’ve done that in New York and Seattle and Portland and a couple of other places. I’m going to be doing it in Las Vegas next week. So there’s we do audio tours, we interview interesting people and it’s called Where We Buy. That’s it.
Ashley Coates [00:14:18] So what areas of in retail are new right now James? What’s really fascinating you about the world of retail?
James Cook [00:14:26] So my personal passion is experiential retail. So those one of a kind, interesting experiences that you can’t get online. And I grew up being a lover of going to the theater, going to the movies, going to amusement parks and sort of I translated that love into kind of often my research topics are around how retailers can create the kind of places that get people out of their homes.
Ned Hayes [00:14:57] So one thing that we’ve heard about is curbside pickup and urban warehouses are kind of splitting into two different areas. So can you explain some of the benefits of these new ideas around last mile delivery facilities?
James Cook [00:15:13] Yeah. So last mile is the real thing. Now it’s the idea that if you live in this city, you can get something delivered rather quickly. And the difficulty has always been that retailers like big warehouses because they’re cheap and efficient and big warehouses only work in the suburbs, the exurbs. And you know, if you live in a Boston or like downtown Los Angeles or in Manhattan, there’s no way to deliver something to you in an hour from some warehouse, even though as the crow flies, it only might be 20 or 30 miles away. You know, as we all know, if we’ve ever driven in, you know, L.A., that’s a real long distance. So the idea is that there’s a whole new crop of, I guess you’d call them virtual convenience stores who are looking for little pockets of space, any kind of commercial space, anything that’s got a floor that they can do staging and where they can find a space in a dense neighborhood where you can order something on an app and they can deliver it to you in 15 minutes. So there’s just people out all over the U.S. right now, several different brands like Gopuff and Joker, and there’s probably three or four more and I’m not remembering the names of they’re all looking for space to do that kind of micro fulfillment from.
Ned Hayes [00:16:38] So I could order something and get it in, you know, 10 15 minutes flat.
James Cook [00:16:43] Yeah, yeah. And so in order to do that, you got to be delivering right in your neighborhood.
Ned Hayes [00:16:49] Mm-Hmm.
Ashley Coates [00:16:50] Another term that came up in a recent episode of your podcast is “phygital”.
James Cook [00:16:55] Oh yeah.
Ashley Coates [00:16:57] Can you tell our audience about that term?
James Cook [00:16:59] Yeah, it’s a combination of physical and digital and the idea there is that in sort of to win in retail in the future, you’ve got to master both spaces. And I can’t tell you how often I see brands that have one brand online and a different or oftentimes like opposing brand in the physical store because nine times out of 10, it’s a completely different group that’s operating the online sphere and the physical sphere. And so, you know, the future is really doing one brand approach and making sure that customer’s expectations because, you know, if you talk about generational differences, younger generations see no difference between the physical and digital space. I mean, I think that’s true. I’m going to as an old person, I’m going to guess, but if you don’t see a difference, then you really shouldn’t treat them differently as a retailer.
Ned Hayes [00:17:57] So how do businesses remain customer centric, even while they’re trying out all these new things like TikTok and everything else? Or are there some key things businesses need to keep in mind, retail businesses?
James Cook [00:18:11] Yeah, it’s tough. I would say that the most successful retailers that I’ve seen are willing to experiment. Unfortunately, that can take a lot of capital, but small experiments aren’t as expensive. So if you’ve got 10 new cool ideas and you try one of them each in one store, or maybe you have one store that’s near the corporate office that you try a bunch of ideas out at that can be much more inexpensive and whatever proves successful, then you could, you know, then pilot that in the entire fleet, iterating online is much less expensive because it’s just like ones and zeroes, so you can do a lot of AB testing online. It’s a lot more expensive to do that in stores.
Ashley Coates [00:18:57] So one way that physical retail and I’ll say restaurants have had to make some pivots into the digital world last year, especially was with QR codes at the table for their menus. And actually on the Phygital episode, Dr. Wided Batat was your guest and she said that the QR code for digital menus really doesn’t offer any experience. It’s functional, but it’s not memorable. What are some other options that offer a great experience while dining?
James Cook [00:19:31] As far as the menu is concerned?
Ashley Coates [00:19:35] Possibly, yeah.
James Cook [00:19:35] Here’s an idea to bring back the paper menus because they’re way better. I think retailers like a lot of these digital solutions for things that we’ve previously done physically, like paper menus. I think retailers are really jumped on them because they’re inexpensive and it’s really easy to change your menu if it’s just, you know, a web page like a mobile web page that people scan QR codes to get to. The problem is that, I mean, I mentioned earlier that I like to go to places where it’s it feels special and exciting, and there’s nothing special about reading on my phone at all because that’s what I do all day anyway. And if I get if I go to a restaurant, I don’t, you know, I want to get away from the doomscrolling on the social media and having a physical and nice physical menu is a great way to go. Many retailers are experimenting with digital menus on tablets. They’re OK. I mean, I still think papers best. I don’t know. What do you guys think?
Ashley Coates [00:20:39] I’m with you, there’s some talk about paper in a digital world.
James Cook [00:20:43] And there’s, you know, there’s a lot of other digital improvements that are happening in restaurants that do make sense. For example, Dave and Buster’s, which you guys familiar with, that it’s like an arcade restaurant where a lot of families go. They’re rolling out a digital platform. So it’s a mobile app which you can order and pay with, which I think is great because if you’re in, you know, a restaurant or a bar, it can be tough to flag down a waitstaff. And if you can just order and pay for something and have them bring it to you. I think that’s really cool and that improves your experience.
Ned Hayes [00:21:16] Right, well, I feel like some retailers overcorrected during COVID going more towards digital experiences. What’s your sense of what happened during COVID? What did retailers do right? What did retailers get wrong?
James Cook [00:21:31] Wow. Well, COVID affected different categories quite differently. You know, if you’re a grocer, suddenly you’re the most popular place in the world. And if you were, say, a fine dining restaurant, you were just closing your doors and sometimes pivoting to, you know, delivery and takeout and ghost kitchens. And everybody experimented, I think. I think one, I don’t know how anybody but everybody could avoid this, but we had a lot of restaurants that really fired their whole staff. You know, they keep on like one manager and now the demand is back and they can’t get that staff back and that is really difficult. Restaurants are really struggling. I mean, a lot of retailers are really struggling with staffing right now. But then again, just from an economic standpoint, how can you keep a staff on for months on end if you’re not getting any income? So that’s maybe for a smarter person than me to figure out. What I really was impressed with was everybody was just trying whatever. Nobody put their head in the sand and said, Well, I’m not going to experiment. I just saw so many different things happen.
Ashley Coates [00:22:40] Absolutely. So what’s coming next post COVID for retail?
James Cook [00:22:46] Well, I am, and again, this could be just what I’m into, but I’m predicting an experience explosion of people and it should have happened by now, but that darn Delta variant got in the way and it’s going to happen, I swear. Where were you really do have a critical mass of people who now feel now that they feel safe, when they feel safe, really saying, you know, I’m back in the restaurants, I’m back to the movie theaters we’re already seeing, like I think I mentioned foot traffic at malls, many malls is recovering. Movie theaters are really starting to recover, the latest Marvel movie did the best Labor Day numbers ever. They did like 180 million, which is fantastic when it happens, I don’t exactly know, but when we do feel safe, I do think a lot of people are going to want to get out of their homes again.
Ashley Coates [00:23:40] Mm-Hmm. Could you give our listeners some final advice on remaining resilient throughout the pandemic? Things that you observed and lurked in the retail world?
James Cook [00:23:50] I guess resilience probably requires you to not be too stuck in the past. So there really is, I think I think that you can you learn from the past as long as you understand that the past is not necessarily the present or the future. Now I’m being very vague here. You probably want some better examples, but I do think that being adaptable is like improv, I don’t know if you guys heard of like improv where somebody you know, you do improv comedy and somebody says something and you just agree with it, whatever, and then you take that and run with it. It’s called yes and, and I don’t do improv, but I’ve heard of it. So the idea is that whatever the world throws at you, you’ve got two options. And one is to say, Well, that’s not how we’ve always done in the past, so we’re not going to do that. Or you can just say, yep, that’s how the present is, and here’s how we’re going to deal with it. And I do think that retailers and restaurants who did really crazy new things seem to have persevered.
Ned Hayes [00:24:50] Well, if we jump ahead, say, five, 10 years from now in into the retail future, what do you think retail would look like? Just just use your crystal ball there, James.
James Cook [00:25:00] So right now, we don’t have a critical mass of the quick delivery of things like grocery, for example, and we’re talking about that starting to proliferate. That’s going to happen a lot over the next few years to the point where if you live in a city and many suburban places too, you’re going to now have the option to buy not all your groceries, but a lot of them and get them delivered to you within the hour. And that is revolutionary because right now, if I want to buy groceries online, I have to find an open slot at my local grocery store on their website. And that could be like tomorrow afternoon or something like that, and then it’s not even delivery, you’re going to pick it up. So the speed of delivery, the cost is going to come down through new efficiencies. It’s still going to be cheaper to buy most things in person overall, but it will be less expensive to have many things delivered. There is experimentation with drone delivery and autonomous delivery that’s happening. I don’t think that’s mainstream in five years, but it’s a lot more prevalent than it is today. So, yeah, I would say more more convenience and hopefully five years from now, this these labor shortage issues that a lot of retailers are suffering from will have been worked out as well.
Ashley Coates [00:26:22] We have one final question for you, James, which is what do you want to be remembered for and what do you wish for others in the world of retail?
James Cook [00:26:32] My main goal is to have fun, and the way I have fun is by learning things and sharing it with other people. They get excited about learning and sharing. So I would say I would like to be remembered as somebody who really enjoyed learning and sharing, you know, and having fun along the way because of that. And then what was the other part of the question?
Ashley Coates [00:26:56] What do you wish for for others in the world of retail?
James Cook [00:27:00] Oh yes. Well, let’s go back to sustainability, I think that a lot of our retail industry is devoted to sort of mindless consumption without thoughtfulness, and that’s really not the path to a sustainable future. I think I would love to see more durable things being sold, you know, less of an emphasis on fast fashion, less of an emphasis, you know, on cheap plastic stuff that breaks after five months and instead an emphasis on, you know, durable things that aren’t going in landfills.
Ned Hayes [00:27:38] Fantastic. Really. Appreciate your time today, James. Thank you.
James Cook [00:27:42] Yeah. Thank you, Ashley. Thank you, Ned. It’s been great conversation.
Ned Hayes [00:27:48] Thanks for listening today to the SparkPlug podcast and brought to you by SnowShoes. Snow.sh For smarter mobile location. Spark Plug is a wholly owned property in SnowShoe all content. Copyright 2021 SparkPlug Media.