Wednesday, June 3, 2009

The Future of Shopping Malls

Real estate developers, leasing agents and retail executives met in Las Vegas in May for the 2009 International Council on Shopping Centers. What is the future of regional shopping malls? This question is especially pertinent since the owner of the local Foothills Fashion Mall, General Growth Properties, recently filed for Chapter 11 bankruptcy.

According to a survey conducted by TNS Retail Forward, about 30% of primary household shoppers visit a regional mall on a monthly basis, down 4% from just three years ago. Gaining the most traffic, by a wide margin, is the power center (Front Range Village here in Fort Collins, where our new Council Tree Library is located)—with 60% of primary household shoppers visiting monthly (49% visit a strip mall with supermarket anchors monthly, and 42% visit online shopping sites). (SBG 10/08)

With tough economic times and rising food prices, consumers are gravitating more to power center retailers like Wal-Mart and Target, for convenience and one-stop shopping. And with Wal-Mart and Target adding food to their mix, power centers are increasing their one-stop-shopping appeal. This is one of the many issues facing the mall owners and leasing agents in Las Vegas.

The economics of a regional mall have, in the past, depended on the anchor department stores; once the customers got to the department store, they gravitated into the mall. With the arrival of category killers—from consumer electronics to bedding and linens—whole departments once owned by department stores have disappeared. The category killers and the power centers are forcing regional malls to find ways to become “destinations” again.

Which is where the International Council on Shopping Centers conference comes in. The ICSC held a design competition. Most entries evidently responded less to the future of the shopping mall than to the glory days “to which we’ve recently bid adieu.” (NYT, 6/2/09). For example, the role of technology in future mall life was largely confined to all the ways one could shop using an iPhone and body scanning; if a shopper expresses a desire for some retail object, it is automatically sent straight to the shopper’s home. CommArts Crossroads City, however, provided some groundwork for what the future mall might look like--generate sales, of course, but also grow food, create crafts, manufacture products, generate energy, and provide education. The mall can become a social center, a “spectacle of hands-on demos, lectures, performances, classes, tastings, parties and shows.” (NYT 6/2/09)

Outside of the ICSC conference, there are changes taking place in mall-world. The Miami-based extreme sports retailer, Adrenalina, has seen sales and traffic grow at its four mall locations because of its prime attraction: FlowRider, an in-store wave-making machine that allows riders to surf a 10 ft. wave while shoppers and onlookers watch through a glass partition. (Chain Store Age 5/09) Or, U.S. mall owners could borrow from their Australian counterparts and have grocery stores anchor the mall. The Newport Beach Film Festival is underway at the still-in-the-running Fashion Island mall in Newport Beach, CA. (WWD 4/28/09).

Custom events do appear to draw major traffic to the malls. Tysons Corner Center in McLean, VA introduced a quarterly women’s networking night called The Ultimate Girls Night Out. Biltmore Fashion Park in Phoenix ran a two-month Movies in the Park program, where classic films drew up to 700 people a week.

According to Nina Robinson, VP of marketing and communications for three Orange County shopping centers, “People still want to be a part of a community, gather, eat, shop and be entertained. They want to escape. The can come and stroll, shop, dine or watch a movie.”

David Holmes, director of the forensic research group for psychology and social change at Manchester Metropolitan University in Manchester, UK says that the consumers’ urge to frequent shopping malls regardless of whether or not they can afford to buy is primal. Human have been exchanging money for goods for 4,000 years. (WWD 4/28/09)

Architect Daniel Libeskind, of Denver Art Museum’s $90.5 million renovation fame, is taking on smaller projects these days. “The world is suffering. But this is exactly the time to do exciting things. It’s not the time to hide our heads…it’s when we use our imaginations to try new materials, new ideas. Not just add gold and chandeliers!” For his project in Switzerland, he wanted to reinvent shopping. He moved beyond stores and restaurants and added such offerings as housing for the elderly and a gas station. The floor plan is more a labyrinth than a series of straight lines leading from shop to shop. (Business Week Online 4/21/09)

On a less grand scale, the Galleria at Fort Lauderdale recently leased 12,000 sq. ft. to the Fort Lauderdale Children’s Theatre. The nonprofit occupies several of the storefronts in the mall’s east wing, and is considered by the mall ownership to not only be the most creative addition to date, but a safe bet.

A twin issue to reconfiguring the shopping mall is the change in suburban living. The Metropolitan Institute at Virginia Tech predicts that by 2025, there will be a surplus of 22 million large-lot homes (on 1/6 acre or more) in the U.S. (Time South Pacific 3/23/09). In a word, the suburbs need to be remade. Suburbs such as Lakewood, CO and Long Beach, CA have repurposed boarded-up malls as mixed-use developments with retail stores, offices and apartments. In auto-dependent suburbs that were built without a traditional center or a downtown, old shopping malls offer a chance to recreate downtowns without destroying existing infrastructure--by recycling what is known as underperforming asphalt. For example, in Austin, MN an old K-Mart is now the Spam Museum. In Denton, TX an old Food Lion Supermarket is now a public library. Baco Raton, FL turned a shopping mall into a mixed-use town center. In Mashpee, MA, a strip mall is now Town Commons.

An even more interesting movement that actually resembles CommArts Crossroads City from the ICSC conference is the Ainsworth Street Collective, a group of some 50 households in Portland, OR that came together out of a mutual interest in sustainability and community, and created a micro-economy within their few square blocks. They published a directory of services provided by neighbors from tax preparation to massage services to cat-sitting—encouraging local transactions. They’ve instituted tool-sharing, car-sharing, bulk food-purchasing and even own a farmer’s market that sells produce, baked goods and other items made by its members.

There will always be mega-malls but developers and architects should not ignore local, grassroots solutions to the empty or emptying regional mall. The question that has driven retailers for a thousand years is still the issue: how do we get people to buy stuff?

For these articles and more on the future of shopping centers, go to Business Source Premier via the Poudre River Public Library District business databases link: http://library.fcgov.com/adult/business/.

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