Features, Strategy & Operations, Trends

How to Fill All those Empty Department Store Boxes?

rr_how-to-fill-all-those-empty-department-store-boxesTalk to any shopping center leasing executive these days and his/her biggest concern is how to fill the swelling quantities of surplus acreage arising from department store closures and the downsizing of in-line specialty stores.  In fact, most shopping center developers are so frenzied about this issue that they will seize virtually any opportunity, however unsuitable, to gain occupancy.    Thus, the proliferation of Christmas markets, Halloween shops and other temporary (and unattractive) tenants, which offer a dreary countenance to the center and further denigrate the customer experience.

And yet…the availability of geometrically uniform, well-positioned blocks of space offers an excellent opportunity to inject energy and a heightened customer experience into otherwise homogeneous and humdrum centers.  And experience is the key…the one irreplaceable characteristic of retail that cannot be duplicated on-line.

Stellar examples of creative shopping center space usage include:

  • “Ski Dubai” – a miniature indoor ski resort built ten years ago into a 250,000-sq.-ft. multi-storied block of space at the Mall of the Emirates, owned by MAF Centers, provides a unique attraction to both locals and tourists…fueling customer traffic and purchasing throughout this vast center.  Initially conceived as an amenity, Ski Dubai now constitutes a key profit center in its own right, as well as the hub of a high-end restaurant cluster facing the slope.
  • Westfield Bespoke – a 35,000-sq.-ft. co-working space fitted into Westfield’s San Francisco center, housing dozens of start-ups and serving as a showcase of retailing and tech. innovation.  The brilliance of Bespoke is that it serves as both a customer-engaging curiosity and a serious incubator of exciting new concepts bound to impact the world of retailing and beyond.  Tenants pay short-term rent and facility charges, covering a share of the investment and providing them access to the mall’s retailers as well as thousands of daily customers.
  • Liberty Center – the groundbreaking new center developed by Steiner + Associates in Cincinnati incorporates social, wellness and spiritual components into the overall retail structure.  These include a flexible “community house” accommodating meetings of local civic groups, a chapel providing religious services and indoor/outdoor spaces providing a range of fitness activities and yoga classes.
Westfield Bespoke co-working space, San Francisco

Westfield Bespoke co-working space, San Francisco

While many (even most) owner/developers will find it difficult to cost justify this level of investment, there are many less costly options for creatively utilizing both small and large boxes of vacant space.  Here are a few:

  • Customer Care Lounges – Why should customers have to travel through acres of passive space – garages, parking lots, entrance corridors, escalators and interior passageways – before encountering their first in-store customer service experience?  Some of the more creative mall owners (Westfield included) have launched customer lounges replete with comfortable seating, complimentary refreshments and package drop-off and delivery services.  An even smaller number of centers (including South Coast Plaza in Costa Mesa, CA) offer a full-fledged concierge service, providing customers with personal shoppers, restaurant and theater reservations and a package check.
  • Retail Start-Up Emporiums – Very often, the most innovative new retailers occupy the least attractive space – i.e., the kiosks and vending carts positioned in the mall’s common area.  Why not house the most attractive and promising of these (including food service providers) in an eclectic and high-energy space billed as the “Mall Innovation Center” replete with informal modeling, tastings and demonstrations.  It’s a leaf out of Westfield’s San Francisco book that could work for virtually any mall.
  • Mall as Cultural Center – Shopping centers in Asia and Latin America have created flexible entertainment venues suitable for concerts, art exhibitions, film premieres, book readings/signings and other forms of popular culture.  As a result, these properties have become premiere sources of art and entertainment in their trade areas…and what better way to engage the community than to embrace its highest values?

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