America De-Malled
By George Anderson
There are still plenty of the giant indoor malls scattered around the U.S. landscape, but the current trend in large retail development is open-air lifestyle centers.
A report by The Associated Press said that many current malls are undergoing changes to make them more pedestrian friendly. For some, such as the Huntington Beach (CA) Shopping Center, that has meant tearing down the existing structure and replacing it with something completely new.
In most cases, however, facility operators and developers have looked to tweak existing facilities with improvements such as outdoor streetscapes leading to existing entrances and destination points such as restaurants and cinemas inside the mall.
The Westfield Group recently announced it was acquiring 15 stores from Federated and it plans to demolish some and replace them with outdoor-facing storefronts and entry plazas.
“We’re having great fun with it,” said Kenneth Wong, president of Westfield’s U.S. division, “and we’re having great success with it.”
While lifestyle centers are growing in popularity even in geographic regions with colder climates, they still represent a relatively small percentage of square footage in mall facilities.
According to CoStar Group Inc., there will be over 100 lifestyle centers operating by the end of this year compared to 1,077 enclosed malls. Still, enclosed mall construction has slowed dramatically from 387 new facilities built during the 1970s to just 47 since 2000.
General Growth Properties CEO John Bucksbaum said his company recently opened an entrance to the company’s Alderwood Mall while creating an outdoor lifestyle plaza with restaurants and shops.
The times, said Mr. Bucksbaum, require change. “We shouldn’t be doing the same look architecturally or otherwise that we did 20 years ago, let alone 10 or even five years ago,” he said.
Moderator’s Comment: What recent changes to mall construction or other aspects of the business do you find most intriguing? How do you see malls evolving
in the future? – George Anderson – Moderator
The thing that most interests me about malls is that we still build them at all. What will happen to these malls in the (not so distant) future when all those Boomers lose their drivers’ licenses?
Ryan is right on Boomers; but maybe short term, the X and Y Generations may take the Baby Boomer’s place. They will still drive.
Big IF: “If these young generations decide the internet isn’t the total answer in shopping, and their impatient character, e.g. standing in line, is handled by superior associate service and knowledge, an indoor shopping arena under any type of banner may help the mall’s longevity.
Who am I kidding?! Neither Lifestyle, nor theme shopping areas will be supported with superior associate care, service or knowledge. So will anything build traffic to malls with these Generations?
Do we have a new paradigm to deal with? Hmmmmmmmm
There is something pleasant about being in an outdoor shopping center with the feel of a village. Let’s give Fashion Island in Newport Beach credit for leading with this concept many years ago.
When I checked out Bella Terra, the mall overhaul in Huntington Beach (referenced in the article), Burlington Coat Factory and Kohl’s were the only major retailers to draw people in. Sorry! I did not get past the Barnes & Noble located on the perimeter. This shopping center is also in very close proximity to Westminster Mall, a traditional indoor mall with JCP, Macy’s, Sears, etc. as anchors.
Ontario Mills is a relatively new, big indoor mall (outlet oriented) that is designed like a race track with stores on the inside and outside of the “track” with places to cut across, and 10 entry points from the outside. In terms of navigating, it feels pretty efficient.
Another new development, Long Beach Towne Center, has a long list of good tenants including Wal-Mart, Sam’s, Lowe’s, LNT, B&N, Michael’s, Pier 1, cinemas, restaurants and many smaller stores. They chose to place the parking lot in the middle and the stores around the perimeter. On the plus side, it gives visibility and access to each tenant. However, navigation and parking feel chaotic as design results in lots of traffic delays while waiting for an endless stream of shoppers in the cross-walks and even car-pedestrian near misses. When there, I find I am less likely to visit multiple stores because getting from one place to another is such an ordeal.
While I agree with the notion above that department stores aren’t a growth category, I see hope for them in these new-format centers.
Department stores grew originally in this country because they were viable and vital parts of the urban streetscape. Contemporary urban planners and architects are trying, with varying degrees of success, to re-create American urbanism — albeit a somewhat Disney-fied version — along nineteenth-century lines. In many cases, this is happening on land that formerly was home to regional enclosed malls (here in Denver we have several such projects in varying degrees of planning and construction, and they are compelling places). Should the department store of the 21st century become, through the efforts both of visionary executives and of empowered, superior customer service-giving associates, I see no reason why department stores couldn’t again become viable and vital parts of our new streetscapes. But the question still remains: can department stores still do this in an age where shareholders are more important than shoppers?
We operate 3 stores, all in enclosed malls. Traffic is light almost all the time, even though the malls range from decent to very nice. We often hear people say that they hardly ever come to the mall, or that they haven’t been to the mall in years. Yet when we offer suggestions to mall management, it falls on deaf ears. Mall property managers seem to think they have it all figured out, while retailers look out in the corridors and only find a half dozen people. The mall has become the premier destination for people with no money. It’s where people go to hang out and waste time, not spend money. The money is being spent online and at Wal-Mart.
Lifestyle centers are not going to take over the retailing scene, however. I personally despise them. In the south, it’s just too hot. I find no pleasure in walking on glaring, hot concrete with the sun beating down on me, 95 degrees in the shade with 90% humidity. Of course, the weather isn’t always like this…sometimes it rains, or snows, or the wind is blowing hard. The distance from car to store is almost the same as it is at the mall, without the benefit of being in an environmentally controlled space.
The enclosed malls could prevail if property managers and owners would get their heads out of the sand and begin focusing on what the shoppers want. Why not buy some golf carts and then have staff pick up shoppers with lots of packages, and drive them out to their cars? Why not put in more destinations such as bill payment offices, public libraries, or post offices, so that people get more in the habit of coming to the mall? Why not have some sort of entertainment going on everyday, such as bands or clowns and magicians, so that people know they can have fun at the mall? No, all the mall managers think about is how to fill empty square footage and collect rents. But the problem of shrinking foot traffic could be easily fixed with a little open minded thinking. Think outside of the box, and figure out what your customers want. Retailers have had to do it for years, and mall managers had better learn how fast.
Enclosed malls have been on the decline for years. One would think that enclosed malls would offer consumers relief from harsh weather and thus do well. Consumers dislike large enclosed malls for a number of reasons. They have a long walk from their car to stores. There is the long walk within the mall going from store to store. Last, but not least, is the security issue. This shopping process simply takes too long for our time starved consumers. Yes, there are consumers who like to make a day of shopping. These consumers are happy to shop the department stores. I think this is the first concrete sign of what is in store for the supercenter. Ageing Baby Boomers are unlikely and maybe unable to shop a two or three hundred thousand square foot store. Pre-shopping on the internet means consumers don’t need to go store to store to see what is available. They know what they want and want the shortest route.
Lifestyle centers benefit from having multiple big box specialty stores, compared to the dozens of smaller specialty stores within many enclosed malls. Many people would rather shop within 1 major big box specialty store than browse 2 dozen copycat small stores. And retail prices can be lower in a lifestyle center, where the rents and common charges are often more reasonable than a nearby enclosed mall. Furthermore, department store anchors are traditional enclosed mall traffic magnets, and department store market share isn’t a growth channel these days.
In the Southwest, West, and major parts of the South, the appeal of the outdoor, neighborhood or small town traditional downtown style makes sense. However, in the Midwest and Northeast, the appeal of the enclosed malls has always been appealing because of the amount of snow, rain, ice, and cold. Those elements still exist as negative factors for shoppers on many days of the year in those locations. While the idea of the format is equally attractive in all areas of the country, the reality of it is not equally attractive.