As the retail industry evolves to adapt to consumers’ new shopping habits, so does the format and purpose of the traditional shopping mall. As retailers reassess how best to reach customers, vacant space in shopping centres are welcoming new non-retail tenants, including gyms, offices and restaurants, to create places where people want to spend their time, as well as their money.
1. Offices as a new type of tenant
Vacant shopping space in the is more and more being taken by companies looking to rent office space, giving employees easy access to restaurants, shops, leisure activities and parking. For example, Net-a-Porter moved their London office to space in Westfield Shepherd’s Bush in 2009, and John Lewis is currently reported to be considering a similar move in the UK in a bid to use extra square footage effectively. Similarly, in the USA, carmaker Ford is relocating to Fairlane Town Center in Michigan, adopting empty retail space as the workplace for almost 1800 employees. Having Ford as a tenant gives the shopping centre a long-term occupant and is likely to result in the opening of new food and beverage tenants, as well as the emergence of new retailers.
2. Logistics center
The perfect combination of online and offline hits a retailer’s sweet spot, and vacant space in shopping centres can facilitate this by providing physical warehouse space for retailers to store their goods. This can accelerate order fulfillment and, above all, reduce costs for the last mile – one of the most expensive stages of delivery.
3. Food and leisure
Shopping centres are now welcoming gyms, swimming pools, squash courts and climbing walls through their doors, allowing visitors to enjoy leisure activities as well as shopping. For example, Nike has incorporated a basketball court into one of its New York stores, and in the UK, Bluewater opened a dedicated viewing space where visitors could watch the Wimbledon tennis tournament on big screens whilst lounging in deckchairs. Other retailers have also embraced the trend of mixing leisure with shopping, with HMV, Waterstones and Selfridges all trialing cinemas in their stores.
The food and beverage sector is also playing its part in the transformation of the traditional shopping centre, with consumers spending more in the food and drink segment than any other retail segment in recent years. Increased consumer expectations and a shift towards preferring new, experiential food offers is leading to a larger number of cafés, bars and restaurants in retail schemes, and space dedicated to these types of stores could reach upwards of 20% of total space by 2025. A successful foodservice offering can lead to increased numbers of shoppers, dwell time and spend.