Features, Trends

The New Standard for Shopping Centers

RR Shopping CentersIt is becoming increasingly apparent that shopping centers need to provide stimulating, energized environments to lure consumers away from their computers and Amazon Prime accounts. There is nothing less engaging than a complex of sterile, half-empty common area rotundas and walkways with dreary soft rock soundtracks, antiseptic lounge areas and not a welcoming face in sight.

The time when shopping centers could serve as simple conduits to their retailers is gone. It’s not enough to provide ample parking, clean walkways and adequate lighting–although I’ve heard some senior industry executives maintain this is still the case. These same executives concede that the average store visits per mall trip have declined by roughly 50 percent over the past five years–from 6/7 to 2/3 stores per mall outing. Consumers have done their research online, and see the mall as a virtual fulfillment center for finalizing purchases and picking up merchandise they have already ordered.

Regrettably, the large majority of shopping centers continue to operate in passive mode–leaning on their retailers to engage and entertain their customers. But there is a growing awareness among the most savvy operators that the mall itself is a critical component of the shopping experience. Engaging customers in an entertaining and emotionally fulfilling visit will bring them to the mall more frequently and keep them there longer.

What constitutes an outstanding shopping center experience? Here are four breakthrough trends which demonstrate how some shopping centers are transforming into experiential destinations in their own right, together with outstanding examples of each. Many of these concepts have been pioneered in global markets before finding their way to the U.S. retail landscape. But they are definitely on their way.

1. Transcendent Customer Attractions

Entertainment is no longer a mall amenity–it is now a necessity. The most successful entertainment initiatives incorporate over-the-top attractions which generate substantial word-of-mouth and energize the entire mall environment.While these innovations typically require a significant up-front investment by the developer, they often can recover their initial cost many times over by boosting overall customer traffic and dwell time, while in some cases benefiting from hefty admission charges.

• Ski Dubai Snow Park

A 240,000 square-foot indoor ski village completely housed within the gargantuan Mall of the Emirates operated by Majid al Futtaim in Dubai. Initially designed as a traffic-building attraction for the mall, Ski Dubai has become a major profit center in its own right, with an admission charge of over $500 for a family of four. MAF has also positioned the snow park as the centerpiece of a high-end restaurant hall, with several full-service establishments overlooking the slope. The outcome: Mall of the Emirates is one of the leading family entertainment destinations in Dubai, exponentially boosting customer traffic, time spent in the mall, and number of store visits.

• Chi K11 Art Space, Shanghai

China has been a leading innovator in the incorporation of cultural institutions within major urban shopping centers. One of the most striking is the “Chi K11 Art Space” which has become a primary attraction at Shanghai’s “K11 Art Mall,” where it is a key differentiator for the mall within the highly competitive Shanghai shopping arena. K11 brands itself as an “art playground where culture, entertainment, shopping and living (in that order) revolve around art.” Chi K11 is listed as one of the top 10 museums in Shanghai, and its professionally curated exhibits communicate an aura of high culture and sensibility to the overall mall experience. K11 Art Mall engages its visitors in a compelling sensory and commercial experience–far beyond their actual shopping itineraries.

2. Personalized Concierge & Shopping Services

The common perception of a shopping center concierge station is two or three bored-looking employees sitting motionless behind an enclosed counter. Increasingly, however, forward-thinking mall developers are utilizing personal shopping services to help their consumers curate the diverse range of mall offerings to meet their specific interests and tastes.

A prime example of this trend is the Personal Shopper Service at South Coast Plaza, Costa Mesa, CA. It is ironic that South Coast Plaza, one of the largest malls on the West Coast with over 250 retail tenants and $1.5 billion in sales, has transformed that woebegone perception by installing a team of personal stylists available to any of its customers for wardrobe selection and image consultation.

No doubt SCP, owned by the Segerstrom family, has the ideal customer base for such a service: It’s the highest grossing luxury mall in California, located in the heart of coastal Orange County. But its Personal Shopper Service represents the type of large-scale investment in staffing, training and physical housing that most developers, even the largest, have been reluctant to commit. And yet the SCP Personal Shopper Service and related concierge services (i.e., restaurant reservations and tickets to the adjacent arts center) have contributed significantly to the center’s remarkable productivity as well as its competitive advantage within the affluent, international Southern California luxury retail marketplace.

3. Connection Within an Iconic Locale

Urban shopping centers often have the distinct advantage of being near or adjacent to historic buildings and institutions. Two of the most forward-thinking developers have effectively synthesized a dramatic connection with their iconic neighbors:

• The Grove L.A.

This legendary L.A. marketplace speaks “experience” so effectively that it’s a wonder its founding concept has rarely been duplicated. The Grove, owned by Caruso Affiliated, was constructed 12 years ago alongside the L.A. Farmers Market, together with an internal trolley system linking the complex with the market. The mall was thus able to capitalize on one of L.A.’s most treasured community institutions, as well as the aura of authenticity surrounding the market. At the same time, The Grove enhances the neighborhood with a vibrant open-air structure (not an enclosed mall!) built around a central plaza featuring choreographed water fountain shows. In the process, The Grove has become a community in and of itself.

• Westfield World Trade Center

There can be no more iconic location than lower Manhattan’s World Trade Center site. This 365,000 square-foot mall, opened in August 2016, is enhanced by a soaring cathedral-like ceiling which conveys a unique sense of spirituality and ethereality. The structure, known as the Oculus, connects on an emotional level with the adjacent World Trade Center Memorial site. From a practical standpoint, Westfield WTC connects seamlessly with one of New York’s largest transit hubs as well as the adjacent Brookfield Place mall in Battery Park City. And its tastefully curated assortment of retail and restaurant components maintains a level of dignity appropriate to its sacred locale.

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4. Coordinated Mall-Wide Customer Service Initiatives

It is not always necessary or possible to create a high-profile entertainment experience to deliver an elevated level of customer service. In fact, even smaller and mid-sized centers can significantly up their customer service game by coordinating their own consumer outreach initiatives with those of their retailers.

A sterling example is located in the far reaches of Eastern Canada: Halifax Centre, Nova Scotia has developed a fully evolved customer service program in collaboration with its retail tenants. Titled the “Together We’re More” Program, the center has engaged its retailers in an ongoing initiative designed to maximize customer service throughout the property. Mall representatives participate together with retail sales specialists in training workshops focusing on world-class customer service techniques. Over half of the center’s 150 tenants take part in the program, which has produced overall productivity increases of up to 20 percent for participating retailers.

Halifax Shopping Centre demonstrates that even properties with modest budgets can significantly lift the bar on delivering a highly personalized level of customer service. And the concept is really very simple: shopping centers, while essentially real estate constructions, can easily leverage the intrinsic customer service expertise of their retail tenants to provide their customers with a fully coordinated, world-class shopping experience.

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