Malls may not be headed toward extinction but the old model is definitely gone for good.
Once upon a time, it was enough for mall owners to scoop up two or three desirable department stores and populate the place with smaller shops looking to capitalize on their popularity.
It became so easy to open cookie-cutter centers, in fact, that they were popping up all over—even in declining markets. It’s one reason the wave of retail closures doesn’t worry Jackie Soffer, CEO and co-chairman of Turnberry Associates, which develops and operates retail and residential spaces. “Those centers shouldn’t have existed so there’s a correction that’s happening because there were too many centers built and there wasn’t really a high demand for them.”
Soffer, whose grandfather started the business, has been around the industry her whole life. Speaking at the American Apparel & Footwear Association Executive Summit last week, she said of the shopping centers that will go away, some of the harm was self-inflicted when you consider the developers who refused to invest in things like landscaping and entertainment.
“I believe the old business model has changed for shopping centers. But I do believe people want to get out especially when they’re on vacation,” Soffer said. “The mall isn’t going way. E-commerce is taking a percentage of our business but it’s still growing. In healthy areas, there will always be a need for shopping.”
Today, consumers have so many other things vying for their attention that a trip to the mall may never cross their minds, especially not when the UPS guy is all too willing to make frequent deliveries from all of their favorite stores.
To stay top of mind, property owners have had to get more inventive.
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Soffer’s solution is to turn the mall model upside down. Search her Aventura property on Instagram and you’ll quickly note the space is about more than simply shopping. Part museum. Part playground. Part restaurant row. The Florida property offers shoppers, tourists and families a variety of reasons to make frequent visits.
While other malls are looking for ways to downsize or otherwise exit the business, Soffer just wrapped up a 315,000-square-foot expansion to the center. Though the new space includes Topshop (a first for the Miami area), Zara and Under Armour, it also includes plenty of areas with a dining and experiential focus.
The biggest attraction, in size and in drawing power, is the Aventura Slide Tower by Carsten Holler. The 93-foot tower invites adults and kids alike to take a thrilling ride down. And of course, the steel structure also attracts the Instagram faithful—a fact that’s not lost on Soffer.
“Social media is important for the shopping center. It’s part of the reason why we do the art and slide, the amount of marketing value that we get out of SnapChat and Instagram,” she said. “The younger generation is focused in showing off where they are, letting people know what they’re doing and taking pictures of their food and taking pictures of themselves in front of artwork.”
In total, the mall features about 15 different pieces of art including another photo-friendly sculpture, the life-size Gorillas in the Mist art. Soffer also said kids also demand a trip to the property to splash around in the fountains.
On the retail front, Soffer built the addition with pop-ups in mind. “When we opened the expansion, we had Untuckit and Casper and we’re talking to Warby Parker,” she said, likening this section to the kiosks and carts of old that were designed to allow retailers to try before committing to a larger, long-term lease. “The direct-to-consumer brands, the ones that will be strong and be the most prevalent, will be omnichannel. And it’s important for people to experience the brand other than on their computers.”
Soffer is also big on drawing on the community. “Miami is such a unique market and there’s so much culture. We want tourists to get a local flavor,” she said. “We have a job to do in that we want to give people more reason to spend time in our properties and come to it initially.”
While mall operators work to diversify to attract a new consumer, Soffer said stores have to do their part too. “Retailer need to look at what the younger consumer wants and create a frictionless traction with them,” she said, pointing out her personal pet peeve. “The problem I have with some department stores is finding a sales person.”
Though she said leasing to Amazon would make her feel like she’s inviting in a “Trojan horse,” she concedes the Amazon Go concept is offering what shoppers want now: easy in, easy out. While she said a fully automated store isn’t necessary, retailers have to figure out how to avoid having long lines. “The brick and mortar side needs to be easy,” she said.
“As far as being successful in the retailer world, it’s a large changing environment and all of us need to adapt,” Soffer said. “There is a very strong future. People will always want to get out. It’s all about experiences and being around other people.”