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Challenge to Malls. Time pressured society makes it impractical to wander malls Fashion apparel sold in malls experiencing limited growth Malls are getting old and rundown – unappealing to shop Anchor tenants are decreasing due to retail consolidation Strategies?

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Challenge to Malls


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    1. Challenge to Malls • Time pressured society makes it impractical to wander malls • Fashion apparel sold in malls experiencing limited growth • Malls are getting old and rundown – unappealing to shop • Anchor tenants are decreasing due to retail consolidation • Strategies? • Make shopping more enjoyable (e.g., sofas, children’s playing areas) • Great food destination (fast food and full-service restaurants) • Tailor make its offering to cater to changing demographics (e.g., repositioning older shopping centers for Hispanic markets) • Mall renovation and redevelopment

    2. Lifestyle Centers Photo provided by ICSC and used with permission of Aspen Grove Lifestyle Center Attractive to specialty retailers

    3. Stores and Restaurants at Lifestyle Centers Williams-Sonoma Victoria’s Secret Restoration Hardware Barnes & Noble/Borders Coldwater Creek Pottery Barn The Gap Banana Republic Bed Bath & Beyond Eddie Bauer Panera Bread Ann Taylor Starbucks Dick’s Sporting Goods Hallmark Aeropostale Johnny Rockets

    4. Lifestyle Centers • Usually located in affluent residential neighborhoods • Includes 50K sq. ft. of upscale chain specialty stores • Open-air configuration • Design ambience and amenities • Upscale stores • Restaurants and often a cinema or other entertainment • Small department store format may be there

    5. Fashion Specialty Centers • Upscale apparel shops • Tourist areas/central business districts • Need not to be anchored • Décor is elegant • High occupancy costs • Large trade area • Ex. Phipps Plaza in Atlanta The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

    6. Outlet Centers These shopping centers contain mostly manufacturers and retail outlet stores Courtesy of Beall’s, Inc.

    7. Theme/Festival Centers • Located in places of historic interests or for tourists • Anchored by restaurants and entertainment facilities

    8. Larger, Multi-format Developments: Omni-centers • Combines enclosed malls, lifestyle center, and power centers • Larger developments are targeted • to generate more pedestrian traffic and longer shopping trips • To capture cross-shopping consumers

    9. Mixed Use Developments (MXDs) • Combine several different uses into one complex, including shopping centers, office tours, hotels, residential complexes, civic centers, and convention centers. • Offer an all-inclusive environment so that consumers can work, live, and play in a proximal area

    10. Other Location Opportunities • Airports • Resorts • Store within a Store • Temporary or pop-up stores

    11. Alternative LocationsAirports • Airports: Why wait with nothing to do? • Rents are 20% higher than malls • Sales/square ft are 3-4 times higher than malls • Best airports are ones with many connecting flights Kim Steele/Getty Images

    12. Alternative LocationsResorts Captive audience Well-to-do customer Customers have time to shop Royalty-Free/CORBIS

    13. Alternative LocationsStore within a Store • Located within other, larger stores • Examples: • Grocery store with service providers (coffee bars, banks, clinics, video outlets) • Sephora in JCPenney

    14. Alternative LocationsHospitals Patients cannot leave Gifts are available Royalty-Free/CORBIS

    15. Matching Location to Retail Strategy The selection of a location type must reinforce the retailer’s strategy be consistent with • the shopping behavior • size of the target market • The retailer’s position in its target market • Department Stores  Regional Mall • Specialty Apparel  Central Business District, Regional malls • Category Specialists  Power Centers, Free Standing • Grocery Stores  Strip Shopping Centers • Drug Stores  Stand Alone

    16. Shopping Behavior of Consumers in Retailer’s Target Market • Factors affecting the location choice • Consumer Shopping Situations • Convenience shopping • Comparison shopping • Specialty shopping • Density of Target Market • Ex. Convenience stores in CBD; comparison shopping stores next to Wal-Mart • Uniqueness of Retailing Offering • Convenience of locations is less important • Ex. Bass Pro Shop

    17. Convenience Shopping Minimize the customer’s effort to get the product or service by locating store close to where customers are located The McGraw-Hill Companies, Inc./Andrew Resek, photographer

    18. Comparison Shopping Customers have a good idea of what type of product they want, but don’t have a strong preference for brand, model or retailer. Typical for furniture, appliances, apparel, consumer electronics, hand tools and cameras. Competing retailers locate Near one another Ryan McVay/Getty Images

    19. Category Specialists Offer the benefits of comparison shopping Consumers can see almost all brands and models in one store Destination stores The McGraw-Hill Companies, Inc./Andrew Resek, photographer

    20. Specialty Shopping Customers know what they want Designer labels Convenient location matters less The McGraw-Hill Companies, Inc./Andrew Resek, photographer

    21. Virtual Shopping

    22. Environmental Issues “Above-ground” risks - such as asbestos-containing materials or lead pipes used in construction. Hazardous materials - e.g. dry cleaning chemicals, motor oil, that have been stored in the ground. Retailers’ Protection Stipulate in the lease that the lessor is responsible for removal and disposal of this material if it’s found. Retailer can buy insurance that specifically protects it from these risks.

    23. Other Legal Issues Zoning and Building Codes Zoning determines how a particular site can be used. Building codes determine the type of building, signs, size, type of parking lot, etc. that can be used Signs Restrictions on the use of signs can also impact a particular site’s desirability Licensing Requirements Some areas may restrict or require a license for alcoholic beverages