Mall Footfall’s Back, But in The ‘New Retail’ Centers Evolve or Devolve

Real Estate

Analytics firm Placer.ai reported that traffic in a 52-mall sample was up 86 percent over March, 2020. And while that still lags March 2019, mall owners believe we are in rebound mode. What is unknown is how long the pent-up demand will last. And as my colleague Pam Danziger recently reported, a survey of 1,000+ consumers by Nielsen noted merely three in ten consumers expect to do more in-store shopping in the months ahead. That said, Placer.ai marketing VP Ethan Chernofsky indicates that preliminary foot traffic for April looks encouraging.

Anchor Alternatives

While the downfall of many malls has been tied to a decade-long department store contraction, developers of leading malls have been hard at work replacing these moribund retailers with new, in-demand specialty players. Besides theatres, fitness retailers, and even grocery stores there are several categories that are in growth mode, among them sporting goods and home furnishings. Ironically, these are both product segments that the traditional department stores used to do well with.

As I’ve reported, RH

RH
(the former Restoration Hardware) is planting some of their gargantuan Design Galleries smack-dab in the parking lots of some high traffic A-malls. Edina Minnesota’s Southdale being a prime example. Many malls no longer require the vast parking lots they were “born with” and the real estate value of those prime malls make’s the development of destination brands appealing.  

Another home goods retailer finding accommodations at the malls is At Home. That 226 store home furnishings player is in a major growth mode, with plans to triple its size to 600-plus stores. Their newest unit, the first in New York City is a 100,000 square foot store in Rego Park, Queens. Another, along with Whole Foods

WFM
, will anchor a renovated center at the Station Twelve redevelopment in Amherst, NY.

Dick’s Lives Where Sears Did

In early April, Dicks Sporting Goods

DKS
took the wrappers of their first Dick’s House of Sport, in Rochester New York’s Eastview Mall. The hybrid store concept is heavy on interactive areas for testing equipment and regular instore fitness activities. Later in May Dick’s will open the second such store in the Knoxville TN West Town Mall. Both stores were previously Sears locations.

In my own neighboring Minnetonka, MN Ridgedale Center, the Sears is undergoing a major gut job, in preparation for a new 105,000 Square foot Dick’s store. Dick’s is expected to vacate the 101,000 square foot former Galyan’s store, less than a mile away. Dick’s acquired Galyan’s 47-store sporting goods chain in a 2004, $362 million buyout.

Not only has Dick’s been raiding empty Sears boxes in search of prime mall real estate, but in Chicago, it is taking over a former 50,000 square foot Carson Store, in Starwood Retail Partners’ Chicago’s Ridge Mall.

Plug and Play

My Forbes.com article of last April, entitled Rethinking the Retail Supply Chain At A Time Of Crisis suggested that many existing Sears Auto Centers were ideally sized and located to morph into hydroponic vertical gardens to supply fresh fruits and vegetables to area grocery stores, mere yards away. Apparently, I was not the only one thinking of repurposing these pad structures; so was Elon Musk. Directly opposite the new Dick’s House of Sports in Simon Properties Knoxville, TN West Town Mall, will be a Tesla Service Center, occupying the vacant Sears Auto Center.

This all speaks to the fact the future of the shopping mall is hardly “one size fits all.” Their survival is directly related to their locations, demographics, and the willingness of owners and developers to invest in their renewal. Their futures no longer revolve around storing and selling goods. Unified commerce reassigns these spaces into places of exploration, brand building, socialization, and community. It requires bringing new meaning and a broader purpose to the malls.

Community Placemaking

For the past two decades I have been writing about the inevitable evolution of many of today’s malls into a new “hybrid community form.” My book references a May, 1999 Metropolis Magazine article entitled “The Mall Doctor” where I along with architect Jon Jerde, whose firm specialized in designing some of the world’s premier malls, commented that the future of many of these mall environments may involve repurposing into “living-working-buying environments.” Jon Jerde referred to them as “gigantic placeholders awaiting their real life.”

Such transformation often involves cooperation between public and private sectors. Such was the case in my own neighboring Brookfield Properties, Ridgedale Center. The City of Minnetonka had been having discussions with both Brookfield and anchors JCPenney

JCP
, about selling off parking area to develop housing. This led to a 55-plus apartment building project and an additional 3-acre site, purchased back from the developer by the city of Minnetonka.

Minneapolis based landscape architectural firm Damon Farber was hired to design a community park, bringing a whole new vitality to what was acres of asphalt. This lovely green space, along with the adjacent housing will begin to turn a sterile parking lot into a walkable, people-place that complements the site’s mixed-use. These kinds of initiatives will reimagine the very best malls and centers, insuring their relevance and long-term survival in the era of “New Retail.” It further addresses our changing community needs and priorities.

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