LOS ANGELES — Developer Rick Caruso envisions in the future
a mother driving her two sons to a shopping center and being able to pull up to
a reserved parking spot, the center’s bakery knows how she takes her coffee and
whether her kids want hot chocolate and she’s sent notifications about her
favorite stores.

It’s part of a storyline scenario the founder and chief
executive officer of Los Angeles-based Caruso Affiliated has created of what
his centers could look like in the future, and the establishment of the
Strategic Development and Innovations division at the company will help move
that vision along as it looks to stay ahead of the pack.

“I’ve been a firm believer, and I think it’s playing out to
be true, that you have to give the consumer every reason to be shopping with
you because they have so many choices,” Caruso told WWD. “Put aside online
retail for a minute. For years our company, we’ve talked about creating a great
experience on our properties and we’ve talked about how retailers have to
create an experience within their four walls and I think it fell on deaf ears
for a while….People have so many options and their time is so limited, that you
have to give them a compelling reason to be with you. You can’t be lazy about
it.”

Matt Middlebrook, who was promoted to executive vice
president of strategic development and innovations, leads the new division.
Middlebrook is based out of San Francisco, with a team being assembled to focus
on what think tanks, technology companies and thought innovators are doing when
it comes to technology and how it relates to consumers at retail and in
everyday life.

“The goal is to understand tomorrow today,” Caruso said.

It’s synthesizing technologies such as beacons, sensors and
driverless cars with consumer insights gleaned from big data to look at it from
a macro perspective rather than looking at technologies piecemeal.

Caruso said the company has had conversations with Google,
Amazon and Jack Dorsey at Square and “those conversations are moving forward.”

“The real beauty that these companies provide is
information,” Caruso said. “They’re really gatherers of information because of
the source of customers that they have.”

Caruso said it’s still early when it comes to talking
specifics or if anything is being tested.

The new division is also charged with scouting out young,
innovative companies that could be potential investment opportunities for
Caruso.

It’s a way of maintaining a competitive edge in a market
rife with choices for the consumer who is forcing, not just retailers, but the
properties they’re sitting in, to step it up and innovate or risk being left
behind, the developer said.

Caruso, who was in Nantucket on family vacation, mused
about what retail developments look like in the future, saying emotional connection
and relevance are crucial in appealing to not just Millennials but all visitors
to a center.

“Everything about [future development that works] affects
all of your senses and that is the problem that indoor malls have,” he said.
“As much as they can tell you they can make themselves productive, they’re on a
race to the bottom because they don’t have the connection with people. Fifty
percent of mall stores are absolutely either useless or they’re duplicates of
what’s next door to them.”

In fact, the company is now banking on its future Palisades
Village project to be a testing ground for technology. The Pacific Palisades
project sets out to breathe new life into Swarthmore Avenue, bringing in new
boutique retailers, restaurants and a park.

The project is slated for completion in 2018 with
demolition beginning this month. It could very well be one part of a complex
answer to the question being asked industrywide of what’s next for retail.

“The goal is that all of the stuff that we’re learning [with
the strategic development and innovations team] gets incorporated into the
Palisades,” Caruso said. “It will be the first place in the country that will
display the best and the brightest of thinking and technology in the consumer
experience. We’ve written a whole story on how somebody will experience that
technology….That’s going to be, really, a test and we’re going to be making
that project available to some of the greatest technology companies around.”