Is the future of malls outside?

Discussion
Photo: Westfield Valley Fair
Aug 03, 2020
Tom Ryan

On Friday, Westfield Valley Fair, the Bay Area’s largest mall, opened an open-air pop-up market in front of Bloomingdale’s.

The pop-up tents arrive as many enclosed malls, including those across California, remain closed as a preventive measure against the spread of COVID-19. Health experts have found people are significantly less likely to contract the coronavirus while outside.

Open from Friday through Sunday, the space features 17 retailers and restaurants — including Levi’s, Coach, Pottery Barn and Ann Taylor — with more expected to be added.

The mall has made cabanas available for about a half a dozen high-end stores. Kate Diefenderfer, director of marketing at Westfield Valley Fair, told KTVU Fox 2, “Clients can actually book appointments to visit our luxury retailers upstairs in private cabana spaces on our outdoor terrace.”

The pop-up will run from July 24 to August 16 and will be extended if successful. Other Westfield malls across the country are launching similar programs.

Enclosed malls were already seeing weak traffic prior to the pandemic due to the shift to online selling and struggles at department store anchors. With the spread of COVID-19, Jan Kniffen, a retail consultant and former executive at May Department Stores, in June predicted that a third of U.S. malls could close by 2021.

At many enclosed malls, only stores with exterior entrances have been able to remain open, and curbside pick-up remains a challenge for inside tenants. Landlords are being asked to upgrade air filtration systems to improve the quality of airflow.

At the same time, the social distancing ease of outdoor shopping has amplified the appeal of open-air shopping environments, including lifestyle centers, outlet malls and strip centers.

Open-air shopping environments were drawing steadier traffic than traditional enclosed malls in recent years in part because big box stores, grocery stores, salons and gyms can serve as anchors. Outdoor plazas also offer up more dining and entertainment options.

“Open-air malls provide a safe space for people to congregate,” Stenn Parton, chief retail officer at DJM, which manages open-air malls in Southern California and Texas, told Glossy. “The future of outdoor malls is very bright.”

DISCUSSION QUESTIONS: Are open-air malls and shopping centers better positioned for survival versus enclosed malls? Does Westfield Valley Fair’s open-air pop-up offer any insights into how enclosed malls may be reimagined amid the pandemic?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I thought open-air malls ('lifestyle centers') were already the future of malls! "
"It’s going to be challenging to retrofit existing malls into outdoor pop-ups."
"...there has been a trend toward “walking malls” for some time now and they have been thriving when traditional “fortress malls” have lost foot traffic and anchor stores."

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25 Comments on "Is the future of malls outside?"


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David Naumann
BrainTrust

Open-air pop-up stores are not a realistic alternative to enclosed malls, as there are big pitfalls. Pop-up stores can only offer a fraction of the merchandise of full-size stores and the weather in much of the country is not conducive to outdoor shopping for several months of the year. Malls are in a difficult situation that has been exacerbated by the pandemic. During the pandemic we will see some malls mandate and offer masks, enforce social distancing, check temperatures of shoppers before they enter the store, limit the number of shoppers in the mall or in specific stores, and install hand sanitation and mask stands throughout the mall. The best bet for malls is to make the environment as safe as possible for shoppers and employees, but it may not be enough.

Michael La Kier
BrainTrust

While open-air malls may be better positioned for survival than enclosed malls, saying that is like saying the seats in the middle of the plane are safest in a crash. Until a vaccine is found, all high-concentration retailers are at risk. Sales per square foot has long been an important metric in physical retail. As long as restrictions limit the number of people in retail stores, and the density of stores exacerbates the problem, there is a risk.

Michael Terpkosh
BrainTrust

Open-air malls are great, when the weather is good. However a mall is a place that can have large groups of people in a limited amount of space. Open air helps but, for most stores, you will need to enter a store to shop. It will be interesting to watch mall traffic with Back to School and the holidays right around the corner.

Dick Seesel
BrainTrust

Welcome to Wisconsin, where we typically enjoy four to five months of winter (if we’re lucky). I see no mention in the discussion about northern climates where outdoor pedestrian-driven shopping is a challenge. The one “lifestyle center” in this area has not succeeded — partly a function of the weather, partly because of the tenant mix as with many indoor malls.

Power centers and off-price (outlet) malls are successful in this part of the country, but they often require driving from one end of a big parking lot to another — not walking from store to store in the cold and snow. There is still a place for indoor malls, but their future depends on the health of the tenant mix as well as the relevance of the overall experience.

Dick Seesel
BrainTrust

Are there any BrainTrust members from regions with the opposite problem? Do shoppers in Phoenix go for outdoor malls vs. enclosed malls during the brutally hot summers there? It’s not by accident that the country’s first fully enclosed regional mall (Southdale) was built outside Minneapolis, or that the Mall of America also chose Minnesota as its site.

Brandon Rael
BrainTrust

The trends and movement to open-air malls and shopping centers were already in motion before the COVID-19 pandemic, and the Great Acceleration has made this strategy a necessity rather than a luxury. While open-air malls will absolutely help to draw traffic and give consumers a greater sense of comfort, this will only work for the foreseeable future — especially with the fall and winter months ahead of us.

Open-air malls are a solid contingency plan during the warmer months, however the mall owners will have to reconfigure the operating model for the enclosed structures, as they were built in another age and without the need for social distancing. There are far too many uncertainties regarding the long term impacts of the virus, and it will take plenty of short term innovation and creativity to draw consumers back and keep store associates safe.

Nikki Baird
BrainTrust
I thought open-air malls (“lifestyle centers”) were already the future of malls! Certainly in my neck of the woods, it is a tale of two completely different outcomes: Aspen Grove, the open-air style mall, was never really shut down, as at least its restaurants could be open for curbside. And now every shop can be open, because they all have external doors. July saw a return of the “Paris Street Faire” weekends where shabby chic and antiques sellers set up tents in half the parking lot. The best that Park Meadows (the big traditional enclosed mall) has managed is a temporary drive-in in the Nordstrom parking lot. The part of the mall that is doing the best is — the open-air restaurant row it added maybe seven years ago. The mall put a great amount of effort into their reopening strategy, maybe one of the most comprehensive out there, but even today capacity at the mall is still limited and not a lot of people are excited about going there. Definitely some creative thinking is… Read more »
Richard Hernandez
BrainTrust

I thought this too as well. La Cantera is a great example in San Antonio. It is a huge open air shopping center with events such as a Twilight Jazz series, art shows and the like. There is a lot of shade from trees as it can be 100 degrees for a large majority of the summer months in Texas. There are very few cold or freezing days in South Texas so it is well attended year round, and even now in this pandemic phase.

Lee Kent
BrainTrust

Yes, Nikki, those town concept malls have been a big hit here. We have several that also have some more that food court, upscale dinning. The thing is, most of them around here are pretty far out due to the land etc. and make them a “road trip” for many of us. So, we still dig the closed malls in the more convenient locations. I think the real issue in many closed shopping centers is how to handle the dressing rooms. The rest can be addressed fairly easily with guidance, masks, and hand sanitizers. But that is just my 2 cents and I could go on and on about it. I’ll spare you.

Neil Saunders
BrainTrust

Even though it is not a long-term solution, the pop-up is an interesting and innovative concept that I hope will draw more people to the mall. It also chimes with what consumers want: our survey data constantly shows that shoppers are far more nervous about returning to enclosed mall locations than they are to outdoor shopping centers.

However this is not just a health issue. One of the problems is that many covered malls are very dated and quite a few are basically big concrete boxes devoid of inspiration and natural light. That wasn’t cutting it with consumers before this pandemic and interest is now waning faster than ever. By comparison, many outdoor centers are more modern and quite a few are integrated into mixed-use neighborhoods which helps generate traffic.

Brett Busconi
Guest

The short answer to both questions is yes.

Survival, in part, is going to hinge on some near-term sales numbers and we can easily imagine more pathways to continuing operations through COVID-19 for open-air malls/centers vs. enclosed malls.

Westfield is working to try and bring their biggest property, in an area currently seeing cases surging, into a more accessible position for selling to their shoppers. This makes good sense – it will be interesting to see what the activities/numbers look like.

Bob Amster
BrainTrust

Nothing is ever black and white in business. Let us not forget why there are enclosed malls in the first place; inclement weather, climate control, multi-story footprint, and easy access from store to store to food court. In many regions of the country, those factors are going to continue to play in favor of the enclosed portion of malls. A hybrid concept might be a better idea, with seasonal stores on the outside, along with some form of outdoor entertainment. A pandemic should not dictate whether we do away with enclosed malls or not. The economics of having too many, too close, and too similar (too boring), will. This is where “knee-jerk reaction” applies.

Georganne Bender
BrainTrust

Pop-up open-air malls are fun and unexpected; town centers are more attractive because they mimic organic shopping areas that mix stores and restaurants. Right now, both are more attractive than traditional malls but that doesn’t mean enclosed malls are going anywhere.

This will obviously work in some places and not in others. In Chicago, for example, summer is too hot and humid to comfortably shop outside. During winter we deal with snow and extreme cold. Neither situation is ideal. But we are not in ideal times and customers are more willing to trade comfort for safety.

Jeff Sward
BrainTrust

Sounds like a solid short term solution for a defined number of locations. And a solid long term solution (already in motion) for a defined number of locations. But a short term COVID-19 solution is not the same as a long term e-commerce shift solution.

Peter Charness
BrainTrust

Malls need to solve curbside pick up as a collective service for their tenants. Open-air is great, except in winter — and for most malls it’s just not feasible. Post-COVID-19 (someday …) the need for curbside will still be there. The need for open-air? I’m not so sure.

Kathleen Fischer
BrainTrust

The trend towards open-air malls and shopping centers has been in the works for a number of years. Shoppers want the convenience of parking near the store or stores they want to shop so they can quickly take care of their business. The pandemic is simply hastening that trend.

Ben Ball
BrainTrust

Pop-up malls are not the long term solution due to the obvious — weather vagaries. But there has been a trend toward “walking malls” for some time now and they have been thriving when traditional “fortress malls” have lost foot traffic and anchor stores. Essentially upscale strip centers set in clusters or pods, these malls offer outdoor access and some feeling of open space that traditional malls do not. Sure, you still have to walk into the individual store or restaurant and that requires masks, etc. for now. But you don’t have to come into contact with everyone going to every store in the mall.

Rich Kizer
BrainTrust

In desperate times, companies must take some desperate measures as they listen to their most creative minds. Most of the time these measures are incredibly creative, and many times successful. Open-air outside store representations can likely make an impactful sales contribution. However I think that much effort in those open-air representations should center on creating consumer desire to go inside for the big show. I think the open-air stores in the warmer climate areas will have the advantage of impacting customers, and will make a profound longer term contribution for the anchor stores.

Gene Detroyer
BrainTrust
The success of malls going back to the 1950s and ’60s was driven by a change in lifestyle. The mall was not only a place to shop, it was a place to go. The challenge malls face today is the exact same thing. It is a change in lifestyle. I do not know if it will solve any real mall problems in the long term, buy I imagine in today’s environment (putting COVID-19 aside) that open-air generates more energy for the patrons than the traditional closed malls. It may be an aside, but I want to reflect on what has happened here in Manhattan with outdoor dining. It may be the same in the other parts of NYC, but I can only speak to Manhattan. In the current re-opening phase, the state does not permit indoor dining. However outdoor dining has been permitted for about a month now. The response has been extraordinary. Tables are set up on sidewalks and in the street. (Yes, they are taking parking spaces away and closing traffic lanes.) The… Read more »
Oliver Guy
BrainTrust

This is a fascinating perspective and certainly outdoor malls have their benefits. But climate and weather have a big part to play. Indoor malls are often a way to get away from extreme weather – rain, cold, heat. In hot and cold climates, outdoor malls will really take a lot of getting used to – and I really question whether this can work.

Lauren Goldberg
BrainTrust

I do think outdoor shopping areas are the future because they are more convenient for services like BOPIS and offer more entertainment options, like concerts and festivals. It’s going to be challenging to retrofit existing malls into outdoor pop-ups. Because of weather concerns, logistical issues and issues with space for merchandise, these pop-ups can be a short term solution to traditional malls current woes, but I don’t see them as a permanent solution.

Kenneth Leung
BrainTrust

Some of the malls in urban areas have no choice for outdoor alternatives. Also, when winter hits, outdoor malls aren’t going work very well in many areas. If there are big parking lots right now, pop-ups are obviously a short term solution. Also, if you have large crowds gathering outside, you still have an issue of spreading COVID by proximity. Long term is, we need a cure/vaccine for COVID.

Ethan Chernofsky
Guest
1 month 16 days ago

Yes, outdoor centers are critical to the future of retail, but so are indoor malls. And both are going to undergo really significant transformation in terms of the types of tenants and experiences they provide. The either/or debate oversimplifies a much more complex evolution.

Craig Sundstrom
Guest

It seems like an unfair comparison, since outdoor malls, aka “lifestyle centers” or outlet malls, are usually newer and smaller than their brethren; so just by that alone, they are on average faring better. But this example seems to be about something else: turning an EXISTING (and very successful, I might add) indoor mall into a modern version of Scarborough Fair. Unfortunately the numbers hint at the limitations: 17 vendors out of the usual of array of ~200; housed in ersatz facilities, while the weather is good (let’s not forget the reason Victor Gruen developed Southdale in the first place). So while I can appreciate this is an emergency experiment, I don’t see it being viable long-term.

Ralph Jacobson
BrainTrust

Yes, open-air malls are popular, especially during pleasant weather seasons. However, I believe this crisis will pass and the wounds from it will eventually heal enough for people to want to shop indoors, especially during inclement weather. Remember, we never stopped shopping in supermarkets, DIY, etc.

wpDiscuz
Braintrust
"I thought open-air malls ('lifestyle centers') were already the future of malls! "
"It’s going to be challenging to retrofit existing malls into outdoor pop-ups."
"...there has been a trend toward “walking malls” for some time now and they have been thriving when traditional “fortress malls” have lost foot traffic and anchor stores."

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