Shopping Centers:
Categories and Classifications There are approximately 109,500 US shopping centers in the US, which can be categorized as “A,” “B” or “C” properties. “A” offers the highest quality, “B” above average and “C” average. Shopping malls are classified as two types: regional centers, featuring general merchandise and fashion, and super regional malls, with more variety than regional centers. Open-air shopping centers include 6 types: neighborhood, community, lifestyle, power, entertainment and value retail.
Winners and Losers Shopping center sales during 2012 exceeded $2.4 trillion, a 2.8% increase over 2011. Sales at shopping centers equal more than half of all US retail sales. Lifestyle centers, which are described as upscale, national specialty and entertainment increased the most of all mall types from 2008 to 2013, at 6%. Regional centers and super regional centers registered the largest decreases at 7% and 4%, respectively.
Vacancy Swings Large shopping centers (more than 200,000 square feet of gross leasable area [GLA]) increased 65% from 2008 to 2013. They are only 7% of all malls/centers, but hold approximately 46% of total shopping center GLA. More than 200 centers with 250,000 square feet or more GLA had vacancy rates of 35% or more during October 2012. Another 44 regional and super-regional malls had an average vacancy rate of 54.5%. It has been estimated that 10% of all US enclosed malls would fail by 2022.
Tenant Trends The type of tenants found in shopping centers hasn’t changed much since 2008, except for food stores and restaurants, which increased from 17% to 19% during the five-year period. Department stores are no longer reliable anchor stores, considering the sales losses and store closures facing Sears/K-Mart, JC Penney and others. Unanchored strip centers have the largest amount of shopping center space in the US: more than 3.4 billion sq. ft. Many tenants are “mom-and-pop” retailers, 75% of which obtain their initial funding from home equity loans.
Shopping Stimulators The Consumer Confidence Index® decreased during September to 79.7 as compared to August’s 81.8, although as recently as May 2013, it was 68. Consumers were more upbeat about employment, with 11.5% calling jobs “plentiful” compared to August’s 11.3%. The 32.7 percent who said jobs are “hard to find” were the lowest number during the past 5 years. Women are the primary shoppers at larger shopping malls while men prefer convenience/gas locations and often shop at warehouse clubs and grocery stores.
The Digital Mall Concept The US retail environment is forecasted to change significantly with the introduction of 3 digital mall concepts: “smart” vending machines, micro-markets and virtual stores. Micro-markets “are unattended, networked convenience stores” that are estimated to increase 9.3% through 2016. Their ideal sites are approximately 70,000 workplaces with 250 or more employees. Virtual stores display photographs of available products, which consumers can select and order with a touchscreen or mobile technology for home delivery.
Advertising Strategies Show lifestyle and power shopping centers’ manager/owners how television will continue to drive their growth of the past 5 years, boosting name recognition, brand loyalty and traffic. Social media is a must for any retailer. Facebook and Twitter both allow for immediate and personable contact with consumers, allowing for the exchange of pertinent demographic and preference information, while supplying line information as well as sales and promotional features.
Advertising Strategies Look for distributors or others developing or managing the 3 digital mall concepts and recommend the visual power of TV as the best method to attract early adopters and build long-term repeat traffic. Recommend television as the best advertising medium for large shopping centers to reach women, and warehouse clubs and grocery stores to attract men. To increase traffic, many shopping centers hold concert series. Coordinating the performances and in-store promotions to the event’s target demographic will increase the success of such events. These are great features to advertise on local television to generate interest and awareness.
Advertising Strategies According to Shopping Center Business, mall events, especially those that are kid- and family-friendly, are incredibly important to keep the community coming back. The magazine recommends seasonal and special events like hayrides, live TV broadcasts, Easter egg hunts, trick-or-treating, safety events, scavenger hunts, and sidewalk sales.