Enter the Daily Needs Mall
You’ve read the news: More and more spending is moving online and retailers that have not been able to adapt are falling by the wayside. E-commerce accounted for 8.9% of all retail spending in early 2017 and has nearly tripled its share of overall retail spending since 2008.
Yet retail market conditions remain positive. National mall occupancy has slowly declined since the recession but hovers at approximately 96 percent, with 2.3 million sq. ft. of net absorption in the first half of 2017. This demonstrates mall owners are finding ways to attract new types of tenants that will continue to bring consumers into their centers.
How? In part, landlords are pivoting to retailers that address customers’ daily needs and spending, drawing foot traffic on a more regular basis.
Grocery stores and regional malls make a great match. Grocers appreciate available spaces in retail centers with plentiful parking. Mall owners value a tenant that households visit on average 1.6 times per week. Both sides benefit when customers can enjoy efficient, one-stop shopping trips.
Mall owners increasingly see grocers as viable options to replace struggling department stores. Furthermore, for centers that still have high occupancy, replacing a struggling department store with a grocer could be a boon to the center. The grocery store can increase foot traffic and may draw a higher-income customer than the department store attracted.
Combined with the growing number of visitors, grocery stores bring in higher sales per square foot. For example, the average sales-per-square-foot at Sears’ stores was $103 in 2016. At Kroger it was $553. Another department store, Macy’s, averaged $150 in sales per square foot, whereas the typical sales per square foot at Whole Foods was $915 in 2016! True, the store footprint for grocers may be smaller, but they bring in consumers more frequently and generate a substantially higher sales volume for the territory.
Southdale Center in Edina, Minnesota, was the first modern indoor shopping mall. It was designed as a communal gathering place where people could shop, eat, and socialize. Southdale’s success has ebbed and flowed, but it served as the template for shopping malls in their mid-century spread across the United States and the rest of the world. This seminal retail center continues to demonstrate its adaptability, having recently announced plans for a Life Time Fitness to take over a 120,000-sq.-ft. space vacated by J.C. Penney. The fitness resort will feature a bistro, medical facilities, and rooftop pool.
Life Time Fitness is following in the footsteps of an increasing number of fitness centers and shopping mall owners. Active gym users go to fitness centers an average of 3.6 times per week, compared to the once-per-month that consumers typically visit a shopping mall. For mall owners, adding fitness tenants can significantly increase consumer foot traffic. Also, the average gym user has a median household income of more than $75,000 – 14% higher than the average American household.
For fitness-focused tenants, shopping malls can offer flexibility. Vacant department stores offer large spaces that can accommodate a variety of uses, from gyms with luxury spa facilities to rock-climbing walls. Inline spaces can be adapted to smaller, specialty fitness users. In both cases, shopping malls typically have plentiful surface parking to facilitate quick and easy access for gym users.
There is also an opportunity for fitness centers to create synergies with other mall tenants. For example, apparel retailers and fitness centers could combine marketing efforts to increase the sale of athleisure apparel and drive gym membership.
Sometimes, mall owners must look beyond retail users to fill vacant spaces in their centers. When that is the case, owners are increasingly marketing a portion of a mall – if not the entire property – as co-working space.
In San Francisco, Westfield opened Bespoke in 2015, converting 37,000 sq. ft. of San Francisco Center into co-working, event, and collaborative space within the larger 1.2 million-sq.-ft. mall. The property’s co-working members spend upward of $400 per month for their space, so the mall owner not only generates direct revenue from memberships but also drives revenue at the mall’s remaining stores and restaurants patronized by the co-working members. Staples stores also are exploring co-working and have a trial program underway that converts excess space in select stores into co-working space.
For shopping centers near office districts and transportation, co-working appears to be a viable method to fill space and adapt to new uses without significant construction costs. Co-working brings together office workers and clients in a retail environment. It is one more method to fill space, increase consumer foot traffic and, hopefully, drive sales at stores and restaurants within the center.
Brian Landes is Director of GIS/Location Intelligence at Transwestern, a full-service commercial real estate firm. Brian can be contacted at [email protected].
No comments found
Dyson to set up shop in the U.S.
The British brand best known for its bagless vacuum cleaners, bladeless fans and, most recently, high-tech hair-dryers is expanding its fledgling retail portfolio.
Dyson Ltd. will open a "Dyson Demo" store this fall at Yorkdale Shopping Centre in Toronto. Also in the works: a store at 640 Fifth Avenue in Manhattan, and one in San Francisco's Union Square.
Dyson has been exploring different ways to allow consumers to see, and interact with, its growing line-up of products. In August, it launched a partnership with Best Buy, opening in-store shops in some 90 Best Buy stores.
In July 2016, Dyson debuted its Dyson Demo freestanding store concept in London. The sleek, futuristic-looking space, on Oxford Street, is designed to allow shoppers to see and test Dyson’s complete line of products. It also has 64 different dust/dirt samples and four floor surfaces available on which customers can to test vacuum cleaners. The store features a salon-like area where shoppers can have their hair dried and styled with the company’s latest invention: the “Supersonic” hairdryer.
“We think it’s important that people can experience our technology, can see and understand the inside of our technology,” Dyson CEO Max Conze told The Telegraph. “Our products have to be so good that if you try it you intuitively understand it.”
Click here to see photos of the London store.
Just want to point out that Toronto and Yorkdale mall are in Toronto, Ontario, Canada. Not the US.
Online home brand opens first store at Short Hills
Boll & Branch, until now an online-only seller of towels and linens, has opened its first brick-and-mortar location at the Short Hills Mall in New Jersey.
Claiming to sell the “World’s Most Comfortable Sheets,” Boll & Branch also offers towels and will inhabit a 2,137-sq.-ft. shop at the high-end, suburban mall known as one of the few to house Nordstrom, Neiman Marcus, Bloomingdale’s, and Macy’s under one roof.
“We’re thrilled to open our first-ever retail location at The Mall at Short Hills, right in our home state of New Jersey," said Scott Tannen, co-founder and CEO of Boll & Branch.
Mon Purse has also opened its first stand-alone store in the U.S. at the mall, a 2,392-sq.-ft. pop-up that will sell customizable European leather handbags and accessories.
Two other first-to-market stores opened at Short Hills recently: The Juice Shop Kitchen & Juicery and Calzedonia, a seller of hosiery and swimwear.
No comments found