Is the Super Regional Shopping Center Taking a Plunge into the Deep End?

I’ve been around the retail block a few times. I have worked as a marketing director for 8 years, and opened my own retail consulting business, Creative Marketing Arts, 25 years ago. But one thing is clear to me as we emerge into a “new normal” for the retail industry: all of us old retail dogs are going to have to learn some new tricks. I think this is especially true for super-regional shopping centers. The shopping center trades say we are going to lose most of our major department stores because they are no longer relevant, and that super-regional shopping centers will no longer be in everyone’s neighborhoods. It appears that we may go from five to eight super-regional shopping centers to one or two in each community within the next two years. These shopping centers were already feeling the squeeze, but COVID-19 has escalated closures and forced already struggling retailers to shutter. News reports say over 25,000 store closures are in the pipeline by year end. Further, national research says only 33% of us feel safe inside a super-regional shopping center. Currently many of these centers are forced to limit the number of shoppers allowed inside, which forces consumers to ask if they want to mask up in the heat of summer and stand in line for a chance to snoop around Marshall’s, Trader Joes, T.J. Maxx, and Nordstrom. I fear most will struggle to accept the “new normal.”

The “new normal” we face saddens me. I remember the feeling of pulling into the parking lot of a super-regional shopping center 25 years ago—it was so exciting chills would run up and down my body when I walked through the doors. Everything looked so big and expansive, so clean and bright. The smell of Mrs. Field’s Cookies and Cinnabon filled the air with comforting aromas. I began my career as a marketing manager for many of these regional centers—it was like being a goodwill ambassador or mini major of the mall. I loved helping retailers with ideas and being their cheerleader. It was truly rewarding.

When I started my own consulting business, I could not imagine working with strip centers; I considered outdoor centers inferior because they could not control temperature or weather. Thank goodness after a few years of being in business for myself, I reevaluated and quickly turned to clients with outdoor lifestyle properties and local strip centers. Events in outdoor centers may be tricky to plan because we cannot control the environment, but now I consider outdoor community centers far more interesting. And with COVID-19, they are far more flexible and forgiving when trying to control social distancing. Also, our outdoor centers will have the benefits of a clear curb appeal providing easy access to retail and dining curbside delivery.

As always, retailers who can adapt and create new business models will survive. Landlords may currently be in trouble as co-tenancy clauses become a factor and tenants see their way out the door with no repercussions. But maybe that can allow for the reinvention of the super-regional center. Some have suggested these centers might become neighborhoods for the homeless.

Each center is already equipped with cooking facilities, bathrooms and space for an easy transition to house 250 square foot living quarters. The government might subsidize this venture, and landlords would successfully collect and pay their debt service. Perhaps this could be phase 1 in planning for the homeless, and address a national issue at the same time.

“Our creative retailers will remain strong and will continue to work smarter.”

Our creative retailers will remain strong and will continue to work smarter. The best will refuse to let consumers stand outside in hot sun or pouring rain and will find a way to showcase merchandise in a holding area while we wait. Many may provide water and free snacks to take shoppers’ minds off standing in line. Tech savvy retailers will become showrooms, galleries, and event spaces. Shoppers will be able to preview the merchandise and order online; retail will no longer be able to thrive without and accompanying e-commerce program. Stores will need less retail space with less inventory. Shoppers are still going to get in their cars and drive to shopping destinations, but they are not going to wait in long lines and be given a timer to hurry up and get out. Retailers must make the wait worth-while to keep us engaged, encouraged and amenable with waiting in line.

Source: Retail Dive, Daily Brew