By Nellie Day
LAS VEGAS — Competition among retailers may be fiercer today than ever before when it comes attracting a consumer’s dollars. Although the recession might be solidly behind us, the average shopper has access to a plethora of online and bricks-and-mortar retailers, as RECon panelists and attendees pointed out during this year’s show, which took place May 18 to May 20 at the Las Vegas Convention Center.
Many popular retailers are once again in growth mode. Shopping center owners are vying for their attention – and for good reason. More outposts means the consumer has more conveniently located shopping centers with comparable tenants from which to choose. It may also mean your center is out of luck if you fail to recruit the top talent in retail.
The top talent in retail, meanwhile, is looking to wine and dine its prospective shoppers — both figuratively and literally. This strategy often begins before a tenant has even committed to a space, leaving the responsibility for a fun, friendly and entertaining atmosphere to fall directly on the shoulders of the center’s operator.
Below are five key strategies outlined by RECon panelists and attendees that detail how a center can remain competitive for both key tenants and shoppers. These strategies also highlight just how many changes the average American shopping center is likely to face as leases expire, new concepts roll out and the fickle consumer becomes no less predictable.
1. Technology is Here to Stay — While most retailers have made major strides when it comes to streamlining the online browsing and buying portions of their companies, shopping centers have fallen behind. Many luxury lifestyle centers and shopping malls are embracing social media, but that investment should be apparent not only online, but also at the actual property as well, according to panelists.
“The Internet is now a part of our business,” said Edward Coury, vice president and director of leasing for Starwood Retail Partners in Chicago, and a participant in the “Acquiring and Then Revitalizing a Challenged Center” panel.
“Barriers to the Internet and to e-commerce sites are very minimal, but barriers to building a great property are gigantic. If you’re a static mall owner, that becomes boring and your customer gets that. If you constantly invest in your center, however — adding new components, more tech-savvy features, building out apps, installing charging stations — the customer will come,” emphasized Coury.
Simon Property Group provides free Wifi for shoppers at many of its malls, such as the 185-store Arizona Mills, which it bills as “the state’s largest indoor, climate-controlled outlet, value and entertainment mall.” No passwords are needed. Shoppers simply have to agree to the terms and conditions.
Simon also offers a mobile app for iPhone and Android users. This app keeps customers up to date on deals, helps them find their favorite stores at a given property and tells them about upcoming events. Charging stations can additionally be found throughout many of Simon’s malls.
2. Consumers Expect an Experience — Shopping has once again become a social activity. No longer do consumers simply drag a buddy from store to store before they hit the food court for lunch, however. Many now look to centers to fulfill other needs, such as holiday outings, daily exercise routines and concert viewing.
“Shopping and eating — retail and restaurant — aren’t the only activities occurring at a center anymore,” said Bryan McFarland, a fellow Challenged Center panelist and principal at Greenwood Village, Colo.-based Alberta Development Partners LLC. “We have to create an entire experience that may or may not be based around shopping.”
Starwood’s Kitsap Mall in Silverdale, Wash., tries to draw shopping back into the mix by offering Girls Night Out events. The women can watch a free comedy show, vote in the Kitsap County Cupcake Wars and obtain gardening tips from a local guru. The event also offers free “Swag Bags” to the first 500 guests, which contain samples, gifts and coupons encouraging them to patron many of the mall’s tenants.
3. Pop-Up Shops Provide Diversity, Bail Out Lingering Vacancies — The concept of a pop-up shop is still relatively new outside the seasonal or holiday stores. Like the shopping centers they often call temporarily home, these stores have also embraced technology and cutting-edge trends.
“Pop-ups tend to be consumer-interactive stores, which provide a great experience,” said Russ Miller, founder and co-owner of Pleasanton, Calif.-based Vacant LLC and a participant in the “Pop-Up Stores and the Changing Retail Landscape” panel.
“You can maximize your vacant space with a pop-up in your shopping center. There is more of a growing demand now for independent designers and emerging brands. They’re not just for Fortune 500 companies. They’re interactive, they’re branded and they have touchscreens.”
Westfield Labs, an entity of the Westfield Group, introduced three digital storefronts in partnership with eBay Inc. at its Westfield San Francisco Centre this past November. Merchandise for Sony, TOMS and Rebecca Minkoff was displayed in three digital windows. Consumers were able to touch the glass, make their selections, transfer the orders to their smartphones and pay securely with PayPal. They could then choose either in-mall pickup or free home delivery.
“At Westfield Labs, we want to define what the future of retail will look like through social, mobile and digital innovations,” said Kevin McKenzie, global chief digital officer for Westfield Group. “For our first pilot, we are excited to partner with eBay Inc. and brands that are pushing the boundaries of online and offline retail to showcase new technology that redefines shopping.”
The Westfield Group has embraced pop-up shops, which not only add a refreshingly new mix of merchandise to a center, but also temporarily absorb vacancies. Westfield San Francisco Centre introduced three digital pop-up shops this past November, including Sony, TOMS and Rebecca Minkoff.
4. Alternate Uses Become More and More Creative — Many industry professionals have heard by now about the medical offices and health clubs that often backfill centers. Many of the RECon attendees, however, predicted this envelope will be pushed even further in the near future.
“I have had people pitch me on swimming pools,” said Yvonne Jones, managing director of asset and property management at Chicago-based McCaffery Interests and a participant in the panel titled “Tackling Today’s Marketing and Leasing Challenges — From the Management Perspective.” “It was very out-of-the-box thinking, which I liked. It was an interesting idea, but we didn’t do it,” said Jones.
Even though Jones says her centers are not quite ready for large swimming pools, she did think another concept might be poised to take off.
“Car showrooms,” she said. “There might be some legs to that. There is probably some room for Tesla at many of these centers. It’s got such a popular product right now. People could come in, they could put their cars together, and they could actually see some of the finished results.”
Windward City Shopping Center in Oahu, Hawaii, offers a variety of city services through one of its tenants, a satellite city hall. While it may not be as sexy as a swimming pool or showroom, the center has embraced useful, convenient services it can offer to retail shoppers. The office provides many permit, utility bill, and DMV services, including car registration, titling and plates. The U.S. Army, Government Air Force and Navy recruiting stations all have a presence at the center as well, alongside traditional retailers like Payless ShoeSource, Sally Beauty Supply and Longs Drugs.
5. Centers Can Test Consumer Loyalty — Incentives have become a major draw for shoppers, even post-recession. While many panelists argued it was too difficult to calculate the return on investment (ROI) with regard to social media efforts and technology investments, others came up with creative solutions to see if anyone was listening.
“If we have prospective tenants or otherwise important people coming through one of our malls, we tend to get anxious about whether we have enough people in the mall,” said O. Randall (Randy) Woodbury, president of Salt Lake City-based Woodbury Corp. and moderator of the “Management Perspective” panel. “We’ve gone to the mall’s Facebook page before and offered $20 gift certificates to the first five people who show up at our centers at a certain time and place.”
Woodbury has also partnered with some of the tenants at University Mall in Orem and The Meadows in American Fork, Utah, to offer time-sensitive discounts via social media that may increase foot traffic to particular corridors.
“It’s surprising to see the results,” Woodbury said. “You can run these little tests to see how many people are actually paying attention to your center’s Facebook page. That has been a real interesting thing for us.”