We are living in challenging times for the shopping center industry. Growth is tepid at best and e-commerce has taken a bite out of the retail pie. Anchor weakness and the lack of national retailers, especially in the apparel sector, has weakened traffic, and the big baby boomer generation is past its prime spending years.
Most, if not all, B-Malls need to be re-thought and, better said, most need to be redeveloped or “de-malled.” Many power center projects have too much space to lease in a retail environment with a shallow tenant pool compared to years past. Lifestyle centers have been hammered by weakness in the apparel sector and fast-fashion retailers, such as H&M, F21 Red and Zara, gaining market share.
If your leasing campaign is coming up short or weak traffic is dampening your sales, you should:
1. KEEP MARKETING
Yes, it sounds simple, but continue to market the heck out of your retail project. Take solace in the fact that our world has evolved from the days when one would have had to fight for marketing dollars and then try to use a shoestring budget to market a center. Today, with the use of social media, you can promote your retail center and connect with your customers. You may not have the ideal number of customers, but zealously market to the ones you do have.
2. CREATE 4-6 SUCCESS STORIES
You may be thinking, “I don’t have 4-6 success stories,” but you do. Identify your successes and then amplify on them in your stories. Make sure your leasing team knows the stories and can recite them in their sleep. You don’t need a long laundry list of them or an impressive sales-per-square-foot number to get shoppers through your doors. A few, well-crafted stories are sufficient, and above all, play to your strengths.
3. GENERATE TRAFFIC
Other than select A-properties, all retail projects today could benefit from more traffic. Your center may lack needed key retailers, so you, in turn, need to generate footsteps. Get creative in thinking of ways to get shoppers into your center. Give your customer a reason to visit your center more often. Think about adding daily-needs uses, such as grocery/food merchants and service providers, and consider adding meaningful events, such as fashion shows, car shows, farmers’ market and art events. Adding services and events that integrate your center into the fabric of the community will help drive traffic to it.
4. CREATE ‘THE STORY’
A significant part of our business is advising owners on going-forward strategies and creating strategic plans for their properties. A key component of the strategic plan is the creation of “The Story.” It starts by considering where a center will be 5 years into the future and looking at the competition and the center’s fit within the marketplace. A well-craft “Story” is then developed around the findings, which is designed to position a mall favorably, put its best strengths forward, accentuate the uniqueness of the center and help distinguish it from competitors. Any center, A-Malls and B-Malls alike, would benefit from a skillfully constructed “Story.”
Retail Real Estate is different from other real estate asset classes. It is hands-on all the time. A retail property owner needs to operate their center with a keen eye on the bottom line – the NOI. The retail business is not simply leasing space and collecting rent; the retail business is generating revenue from multiple sources. Deploying the above 4 steps can serve as your guide to the retail success of your mall and/or center.