In the past, the suburban mall attracted shoppers with anchors such as mid-market department stores or big box retailers. How have traditional malls evolved to be more competitive and capture consumer attention? 

AB: The modern mall has been pronounced dead many times recently, but what’s really happening is more of a metamorphosis. Department stores have continued to downsize and close, so there is space available to developers to add more lifestyle and entertainment options to enhance centers.  Today, traditional malls are adding live entertainment and a variety of dining options to transform their spaces into a gathering place for family and friends.  A good example of a concept that incorporates retail, dining and entertainment is the Tommy Bahama “compound,” which offers both lifestyle retail,dining and live music. Many retailers are shifting to an entire lifestyle presentation that includes all sorts of soft and hard goods as well as entertainment and dining. Another brand that exemplifies this lifestyle goods presentation is Anthropologie. Developers that see this shift in retail and translate it into action are evolving their shopping centers to be a more lifestyle-inclusive “place.”Essentially, the transformation is starting with the retailers and moving up to the shopping center developers.

Over the past 12 months, the trend for shopping centers to become lifestyle hubs has been on the rise. How is Madison Marquette transforming its properties from retail-only to community destinations?

AB: Madison Marquette’s Wharf development in Washington, DC, is a good example of this. The Wharf combines hospitality [hotels], office space, residential condos and luxury apartments, and entertainment. It is creating a new district within “The District.”Lifestyle is the focus. The project caters to the people that both live there and visit with tons of great food options, an entertainment venue, and services like a grocery store, a drug store, a dry cleaner and a curated selection of retail soft goods. As it expands to become more of a lifestyle center, The Wharf provides a perfect model of where shopping centers are headed.

How is the national franchising trend benefiting shopping centers?

AB: People are somewhat “bored” with the same retail stores opening at most centers and sometimes within blocks of each other. Many of these retailers, like Gap, are closing locations because they expanded into too many locations, which diluted what originally made them unique. Franchising, however, puts the local businessperson on the front lines of customer service and fashion trends. For example, I recently visited a 700-square-footmen’s store in Fredrick, Maryland, that carried clothing you can’t find anywhere else; the store is in an historic district with a buildout that is “industrial chic.” Incredibly, the retailer also offered its customers a barbershop upstairs as part of its “lifestyle” presentation. It was a great example of what the “new urbanism” has done to reinvigorate downtown areas. It is that contentedness between retailer and consumer that has created a sense of place and a shopping experience that traditional malls don’t offer.

While consumer preferences differ across the country, are there any universal tenant choices that make sense whether in California, Texas or New York?

AB: The “ath-leisure” trend in fashion works in shopping centers across the country. Ath-leisure is clothing designed for yoga or the gym, but it can be worn outside of those environments as fashion, or at least it has become fashion. Retailer examples include lululemon athletica, Gap’s Athleta stores, and even DICK’S Sporting Goods’ ath-leisure line, Chelsea Collective. In fact, most clothing manufacturers offer some type of ath-leisure clothing options now. Another universal tenant choice is retailers that offer the so-called “boho-chic” fashion. We are seeing a lot of women’s stores offering boho-chic brands, and retailers such as francesca’s, Anthropologie, Hemline and fab’rikare becoming staples in many shopping centers throughout the country.

What type of retailers should centers be looking to add to their mix as an alternative way to drive traffic? 

AB: Creating consistent foot traffic is a leasing strategy that many shopping centers have struggled to fulfill. However, with the right retail mix, increasing foot traffic can be a viable solution to a dark corner of a shopping mall. For example, Apple stores always drive traffic. A mix of retailers needs to be experiential, offering a process of discovery. Vintage record stores and clothing stores mixed in with traditional retail adds a hip and cool vibe. Think Urban Outfitters as a one-store example of this with its airstream trailer coffee shop/café, unusual books and gifts mixed with soft goods. To drive traffic, a mix of stores needs to offer customers a unique selection of merchandise at various price points that you can’t find anywhere else.

The post 2015 Leasing Trends appeared first on PLACES.

Q. What trends are important to monitor in today’s real estate investment market?

M: It is very important to look at population growth as well as the jobs which drive the need for more office and retail space. In addition to tracking millennial trends, we also look at where people are retiring to and where young families are moving. To stay informed and make good decisions, it’s critical to examine where the growth is occurring.

Q. What are some of the most important factors institutional investors look for when making real estate investments?

M: They are looking for long-term durability, strong credit ratings and whether there are stable anchors. On the office side, in addition to larger private-sector credit tenants, some institutional investors look for General Services Administration (GSA) buildings – office buildings that have government agencies as tenants. While these kinds of investments have a low yield and low return, they are very secure, which is a plus.

Q. What are some of the most interesting investment opportunities for 2016 and beyond?

M: Emerging submarkets that are on the cusp of becoming primary submarkets are going to be very interesting. Recent examples of this include targets like Miami’s Wynwood District, Design District, downtown Brickell area and Flagler Street. Brickell and Flagler were part of a sleepy downtown Miami, and Wynwood and Design District were industrial areas comprised mainly of old warehouses and low-income housing. With the growth of the urban core of Miami taking off in the last few years, we have seen leasing take off in these submarkets with new, hip retailers and restaurants, along with some of the more desirable high-lux standard bearers, and in turn, we have also seen soaring property valuations.

Other interesting investment opportunities include secondary markets that have been devoid of a dynamic urban core environment, but are now experiencing an influx of young professionals from markets such as New York, Boston and San Francisco. Whether their relocation is due to their attending school in the market or because of a job relocation, they originally hail from markets with strong and vibrant downtowns, and therefore are driving growth in the urban core of their new cities and leading the change to a dynamic downtown. Sun Belt cities seem to have been the primary beneficiary of this trend.

Q. Why should real estate investors look to cities with an upsurge in millennials for new investment opportunities?

M: People in their 20s and 30s typically spend more because they have more disposable income. This is why millennials are a great target for retailers. There are great opportunities for those investing in assets that house retail stores, restaurants and bars since millennials tend to spend freely on things like clothing and eating out. On the flip side, millennials can be transient, and their patterns may change as they marry and start families, so you have to be mindful of this trend.

Q. Are retail-centric properties a safe investment?

M: Yes. Grocery-anchored centers are your bread-and-butter investment, especially if they are in a good location. So, if a center has the right grocery anchor, is well located, and has services and restaurants that cater to an affluent and meaningful local population, we consider it to be a safe, or core investment. Urban properties also tend to fall into the core investment group. Think about downtown assets in markets like New York City, San Francisco, Boston and Washington, D.C., where the foot traffic is significant at all hours of the day.

Q: How do you select the right asset to invest in?

M: There are a number of factors that must be taken into consideration when selecting an asset to invest in: Where is the location? What is the transportation situation? Where is the competition located? What is the makeup of the market? Madison Marquette likes to invest in coastal areas, for example, because they tend to have built-in barriers to entry, established or growing employment industries, and strong population growth trends.

The post 2015 Investment Trends appeared first on PLACES.

Q: What does it mean to activate a property? 

MM: Activating a property is the key mechanism for drawing people into the site. Before we can make a site a shopping destination, it needs to become a known entity. The goal is to make the property a part of the community and a place where people want to go.

With customers more frequently shopping online, visiting a shopping center needs to become more of an experience.  It’s not about just picking up a pair of jeans; you need to offer something more. Ideally, activation of a property will start before any development or leasing, and it should continue throughout the life of the property. When a new property is in development, for example, we engage the community right away and get them accustomed to coming to that space in their neighborhood. We do this by creating a thriving atmosphere with community open houses, pop-up stores in temporary spaces, music series and food events that play off the existing neighboring tenants. 

Q: What are some of the top trends in retail activation? 

MM: One of the biggest trends in retail activation right now is pop-up stores. This is a way for retailers to test a new concept on a much smaller scale, but it can also be used as an incubator to see what resonates with the public.

Because pop-up retailers bring a tremendous amount of authenticity and originality to the projects in which they are featured, shopping center owners use this as a way to create buzz about the property and draw traffic. Ideally, a shopping center would do this with multiple pop-ups – which can range from a week to several months each – throughout the year.

Another trend we’re seeing is online retailers creating variations of traditional brick-and-mortar stores. They’re finding that this is one of the best ways to test products with what is essentially a real-time focus group. One example is Birchbox which opened a successful brick-and-mortar store in SoHo in addition to its online platform. Previously, companies were solely brick and mortar with a minimal online presence; now, businesses are exploring a mainly online footprint with a sampling of brick and mortar. 

Q: To what extent are social media and other technologies used in activating a property? 

MM: In its simplest form, technology can be used to communicate anything out of the ordinary.  These messages can range from featured pop-ups to events and new promotions to the announcement of retailers, restaurateurs and services.  Social media is a great way to communicate key messages to the surrounding community and social influencers in your market.

In addition, technology can play an important role inside the shopping center.   No one shops alone; they always have their phone with them. Therefore, we are exploring ways to use cell phones and other mobile devices to bring people into our shopping centers.  Once they’re there, we want to help them navigate through the center, help them decide which stores fit their personalities, and answer any questions they have either through social media or specific “text for answer” applications on their phones.

Interactive information is also of significant interest. Kate Spade was recently constructing a new store, and on the store’s barricade, they installed touch screens that engaged shoppers to explore which product lines were coming and to promote the brand. The interactivity tracked shoppers’ likes and dislikes, something which played a role in helping Kate Spade merchandise the store and gave the brand strong information about the market’s demographics and tastes prior to opening.

Q: Can you describe an example of an activation success story? 

MM: LaBrea in Los Angeles is a great success story.  Madison Marquette purchased a group of buildings, along La Brea Avenue just before the recession hit. One of the buildings included the former Continental Graphics building, previously a premier print shop and Los Angeles-area icon. The group of buildings had been targeted with graffiti, and the structures were being sold as a teardown. Because the property was closed off from the street, you couldn’t see the potential for retail. However, once inside the buildings, there was amazing existing architecture, beautiful vaulted wood ceilings and fabulous existing flooring. Despite its unrefined state, we saw the potential to create a unique urban shopping street that would offer Los Angeles something it had never seen before.

A big part of what made the property activation so successful was the informal LaBrea district business association Madison Marquette created to collaborate with surrounding tenants. We coordinated the activation and used carefully curated events and programming to bring the block alive. The efforts were timed so events would coincide with other in-market promotions, and we took the lead in communicating district-wide happenings to the public via social media and email blasts.

Madison Marquette also brought in a famous muralist, Shepard Fairey, the same artist who designed the famous Obama “Hope” poster, to paint an 8,800-square-foot mural.  The mural wraps around a corner of the property and really gives it a unique identity.  During the creation of the mural, we hosted a social event to further engage the community, and it continues to be a great story for us today when people ask about the mural’s origin.

After the mural was completed, we hosted a two-week art show on site that also included food trucks and pop-up stores. All of these events took place prior to leasing the spaces.  Even though we were making an investment in the location before even having operating tenants, we knew the type of retailers we wanted to attract and the merchandising vision for the property, and we had already begun communicating that vision to the public.

Q: Does the activation attract tenants as well as customers?

MM: Absolutely, yes. In an existing center, the activation increases current customer sales, but it also attracts new tenants. Ideally, we will have a strong enough vision and activation plan to allow ourselves the opportunity to be selective about which tenants we want, choosing the ones that best fulfill our vision and merchandising strategy.

Q: How is activation different in a mixed-use property? 

MM: Madison Marquette owns a mixed-use property called Bellevue Connection in Bellevue, Wash. The top floors are office space, while the lower floors are retail.  The property had an outdated traditional coffee shop on the ground floor.  We were able to replace that tenant with an attractive new food concept growing in popularity within the Seattle market.  Known for quality sandwiches and great breakfast options, the restaurateur also offers coffee, wine and beer, all of which make it a more desirable destination for on-site office workers and the surrounding community.

The key with activation for mixed-use is to find the synergies between the different groups. The retailers, restaurants and services have a captive audience, and the office workers are searching for destinations that offer them not only convenience, but also an engaging and unique experience.

The post The Value of Activation appeared first on PLACES.

Q: You’ve got a stellar reputation for helping numerous retail centers revitalize, reinvent and get back on track.  Where should a center in this position start? 

JDF: Start small. You don’t need a big budget to dramatically improve the “curb appeal” of your property. A few hundred dollars’ worth of paint and a day or two of work by your maintenance staff can make your entrance look brand new. A small investment in landscaping can give a property an updated look and feel. Something as simple as repainting curb cuts with yellow paint or adding lighting to the “eyebrows” above the windows at a mall entrance can dramatically refresh your look. At one mall, we got positive customer comments for weeks by adding $50 of pink dye to one of the water fountains to promote breast cancer awareness month.

Q: If you gathered everyone together to discuss potential changes, who would you want at that table? 

JDF: The lead investors and other important stakeholders, of course, but you might also want to include more junior people as well. Once you have all the stakeholders around the table, make sure everyone – not just the lead investors – gets a chance to speak. This isn’t just about being polite. Sometimes the most junior person at the table has the best idea. Maybe it’s the part-timer in the food court who notices that young moms tend to leave when they find out your center lacks a family-friendly bathroom or a store specializing in gluten-free baby food. If they don’t speak up, you’ll never learn you need to do more to attract and keep this key customer segment.

Q: Do you need to re-staff in order to redevelop a property? 

JDF: No, the people you need to successfully redevelop your property are already all around you. Now is the time to get to know them – or to know them better. The trash collectors might tell you which tenant is tossing out the loose paper that makes your parking lot look like a dump. Someone on the zoning board might tell you about a new municipal parking garage the city would help pay for that could attract new and different types of customers to your mall. A congressman might alert you to a military recruiting center or post office that can drive traffic as well.

And, of course, don’t forget your merchants and customers. Too many center managers spend too much time in their offices. You need to get out and learn the strengths, weaknesses and future plans of every business under your roof. Knowing that your anchor department store underperforms others in its parent company gives you an early warning to line up a replacement in case they close. Finding out which of their departments performs the best (athletic gear or children’s clothes, for example) signals there may be room for another specialty tenant selling that merchandise.  To find out what shoppers want, consider posting an online customer service poll or having your service desk keep a log of customer requests, then pay attention to them: The unfilled requests tell you what customers want but aren’t getting.

Q: Who else should you talk to?

JDF: A great resource is the brokers who sell retail space. To cut costs during the last two recessions, many mall owners outsourced their real estate function to outside brokers. Because the same broker may now represent multiple centers, the best of those brokers has a stronger understanding of industry trends, the market climate in your area and the best practices in retail real estate management. Interview every retail brokerage company in your area and ask them to prepare merchandising plans and creative uses for your center. Challenge them to identify specific, measurable goals and objectives for their redevelopment plans, and press for details such as their fees and whether they are willing to do short-term or temporary tenant placements. Worst case, you’ve gotten an outside perspective. At best, you’ve found a real partner who can creatively and proactively locate quality tenants for you.

The post Revitalizing a Retail Property appeared first on PLACES.

How did you develop the concept for Not Your Average Joe’s?

SS: In 1993, at my father’s request, I moved from Colorado to Massachusetts to help with the family business. I soon discovered that there was a lack of quality food at affordable prices in my hometown. At that time, if you lived in the suburbs and wanted good food, you had to travel into the city. So, I opened a restaurant that brought the city to the suburbs. Since I was new to the restaurant business, I was open minded about creating a concept that was previously unheard of in suburban life. 

DM: Steve’s idea was to bring an urban dining experience at an affordable suburban price to his neighborhood, which featured both American classics and global foods. What started out as an experiment with one location has grown into 23 locations that provide delicious made-to-order food in a comfortable and relaxing atmosphere.

What makes Not Your Average Joe’s unlike any other neighborhood restaurant?

SS: Not Your Average Joe’s is an elite combination of made-from-scratch food by real chefs in our restaurant kitchens, innovative structural designs and affordable prices. Each location is unlike the next – we don’t have a specific prototype. We wanted to truly create an experience based on the neighborhood we are located in. For example, at the Glen Mills location in Pennsylvania, we’ve incorporated communal tables made from reclaimed bowling lanes from a local bowling alley.

DM: The food really sets us apart. Not Your Average Joe’s features American favorites as well as a wide variety of dishes from the Pacific Rim to the Middle East and everywhere in between – we offer dishes from places all over the world. We also pride ourselves on special orders. We are known for listening to our customers and preparing food that meets their needs and satisfies their palates. Not Your Average Joe’s is sensitive to dietary restrictions, including gluten-free diets and allergies, too. Our chefs will come to individual table sides to discuss any accommodations we can make to give our customers a more comfortable and pleasurable dining experience. 

Not Your Average Joe’s has been successful in six states. Do you have plans to expand into other areas of the country?

SS: Geographically, our goal is to expand between Boston and Virginia on the East Coast, opening four to five locations a year.

DM: Not Your Average Joe’s expansion strategy will be hyper-selective. We want to be able to hop on a plane and, within a few hours, visit any of our locations.

What are the “must-taste” items on Not Your Average Joe’s menu?

SS: For appetizers, I always order the Edamame Dumplings in a lime chili broth. My salad choice is the Super Crunch Salad, which is filled with healthy ingredients such as avocado, pistachio and kale and has been a customer favorite on the menu for the last 15 years.

DM: My must-taste recommendation is the mouth-watering Fish Tacos, which features seared Ahi Tuna wontons. In the fall, the Coriander Rub Pork Tenderloin brings out warmer flavors for a hearty cold-weather dish.

The post Retailer Spotlight: Not Your Average Joe’s appeared first on PLACES.

Q: What are some of the key strategies for driving traffic in today’s environment?

 LC: Customer experience is always an important factor in driving traffic. Parking should be easy to find (and paid for if required), a dynamic marketing and activities program including events that appeal to the community such as farmer’s markets and children’s programs, and a clean and well-maintained center are all important elements to creating a valued experience. It is also crucial to keep the community aware of new tenants and center enhancements, which can be done through advertising as well as marketing and public relations initiatives. Customers have a lot of options when it comes to making purchases, so owners and property managers must create a warm, inviting environment to attract attention and build and foster loyalty.

KW: In today’s tech-driven age, social media is also a key driver of traffic and in building customer loyalty. Of course having the right merchandising mix is integral as well. As Lori noted, it is always important to create an atmosphere where shoppers want to visit and stay. Creating that special experience for a shopper is the advantage a shopping center will always hold over online shopping. With the ever-changing, fast-paced world we are now living in, we have to be quick to adjust to consumer needs on all levels to continue to provide that “experience” that shoppers crave.

Q: How has the millennial generation impacted the tenant mix, services and amenities offered at centers?

 LC: Customers today are extremely price sensitive and millennials desire information at their fingertips. Centers that offer mobile applications and social media incentives create a stronger brand which can help capture this new generation of consumers.

KW: The millennial generation is extremely tech-savvy and is typically well-educated and ambitious, but they also want everything now. As shopping center managers, we have to take the instant-gratification desires of this generation into consideration when deciding on tenant mix and what retailers, restaurants and entertainment options we are making available at the center. How do we get millennials into the mall and how do we keep them coming back are questions that must be asked when determining center offerings. Amenities such as Wi-Fi, mobile apps, marketing campaigns, and promotions that include social media are an important part of reaching this generation. Engagement is key.

Q: How do you enhance the shopping experience at your centers?

 LC: I manage neighborhood shopping centers and there are a number of things we can do, even in the absence of a marketing budget. We enhance the customer experience by keeping the center clean at all times, providing beautiful landscaping that is constantly maintained, providing common area music, and ensuring tenants adhere to the center’s design and operating standards. The easiest thing a Property Manager can do is to ensure their vendors are performing their duties to the highest standards on a daily basis. Customers will often forgo shopping at a neglected center.

KW: Different kinds of properties require different things to create an appealing experience. Events, merchandise and marketing must be tailored to the demographics and needs of the community. My centers are primarily mixed use, community centers, which are unique in that they have to appeal to residents as well as customers from the surrounding neighborhoods and communities. I find that focusing on grassroots efforts can ensure we are meeting the needs of our customers and residents. This can include paying attention to shopping/visiting habits and monitoring social media for customer feedback. Additionally, property managers must work with their merchants to enhance offerings and possibly create cross-promotional opportunities among various retailers.

Q: What can centers do to stay relevant?

 LC: Today’s shopping centers must embrace technology to stay relevant. At a minimum, shopping centers should offer Wi-Fi services as more and more customers rely upon an internet connection as an integral part of their shopping experience. Leasing plays a big role in merchandising the center. The merchandise mix and entertainment and dining options must appeal to the local needs and therefore having an experienced, effective leasing team, and working together with that team is a vital component of keeping a center relevant.

KW: We must follow the trends and listen to our customers. Whether through the center’s website, Twitter feed or Facebook page, property managers must make sure that we are engaging our customers and capitalizing on the viral nature of these outlets to tap into customers’ networks and appeal to broader audiences. These channels allow centers to promote sales, events, community involvement and foster engagement with the center, keeping it top of mind with consumers.

The post Property Management Best Practices appeared first on PLACES.

Q: How is the real estate investment market faring today?

 CE: The investment market is extremely competitive, particularly for the gateway markets. Prices for institutional properties appear to be back at peak levels, driven by a combination of the attractive debt markets, the tremendous amount of available capital and the relatively constrained amount of retail and mixed-use investment sales inventory.

I think what is particularly notable is the amount of capital targeting real estate – in terms of the breadth of sources and overall level. Nearly every category of institutional investor is below their target allocation for real estate, and this targeted allocation is on the increase. There is clearly tremendous demand for retail properties from all major classes of investor as well. One trend that will be important to monitor is the inflow of international capital into U.S. real estate. Foreign capital represented a growing percentage of core acquisitions in 2013 and we believe this demand is on the rise as foreign investors remain attracted to the U.S. for its stability and attractive risk-adjusted returns.

Q: Where do you see the most interesting investment opportunities for 2014 and going forward?

 CE: One area that we think is very attractive are opportunities aligned with centers for tech and creativity — the social media, gaming and other tech companies where urbanism, high-density populations and affluence are largely the demographic. In San Francisco and outlying areas such as Potrero Hill or recently revitalized neighborhoods such as mid-Market are growing rapidly due to Twitter and other impactful tech companies, and there is an opportunity to develop some significant retail around them. In Seattle you have the Amazon effect, where roughly 200 new employees are being added each week in South Lake Union.

Additionally, significant opportunities can still be found in good infill markets that have strong remaining upside while offering the density, affluence and overall cache that can attract the retailers and expanded consumer base we often target. For example, we recently acquired a property in the Williamsburg area of Brooklyn, an area that is strong but with tremendous additional long-term upside opportunity as it becomes fully gentrified. In addition to South Lake Union in Seattle, we believe Bellevue has tremendous upside given the significant commercial and residential development either underway or on the books. The Design District in Miami is another example.

Recognizing these types of opportunities can be facilitated by an established local presence. We believe that our regional offices in our core markets help to spot trends, identify investment opportunities and then execute our investment plan. We see a local integrated presence — ranging from investment to leasing, marketing and management capabilities — as a very important competitive advantage of Madison Marquette.

Q: What are some of the driving factors in smart real estate investment?

 CE: We think key factors are the following: ensuring upside in rents and cash flows – the current cap rate and pricing environment is very aggressive and we believe it is critical to have comfort on the ability to grow rents. Urban areas have seen tremendous general appreciation in rents recently, but we also focus on increasing rents through driving sales. Focusing on changing consumer retail spending patterns, including a particular focus on the Gen Y consumer. We believe it is critical to differentiate between specialty and commodity retail and to continue to identify and work with innovative retailers and fashion-forward brands as part of merchandising strategy.

Understanding the impact of technology and social media – on both consumers and retailers. It is important to identify retailers in all categories who effectively embrace and use technology and a variety of social media platforms. Overall, we think it is critical that our projects are not viewed as a commodity. They need to provide our customers unique and specialized products and services that can’t be replicated elsewhere.

Q: How are demographics influencing retail real estate decision-making — including property types and tenant mix preferences?

 CE: Dynamic markets with a strong employment base are largely where affluent, tech-savvy, creative millennials are migrating. Blue chip companies like Boeing, Amazon and Microsoft are drivers for retail and restaurants, and tech is driving employment right now. Monitoring the continued migration patterns of the millennials will be key.

Also, boomers, who were the major consumer force in the economy, are retiring. Their living and expenditure patterns are changing and need to be considered. In addition, overall population and employment shifts merits monitoring. Right-to-work states and those featuring economic strength and a low individual and corporate tax base may become more attractive from an investment standpoint in our minds than in the past.

The post 2014 Investment Trends appeared first on PLACES.

Q: How did you conceive of the Charming Charlie concept?

 CC: There was unwavering need in the marketplace for a curated fashion brand specializing in accessible, on-trend fashion jewelry and accessories.

Q: What is unique about Charming Charlie?

 CC: Charming Charlie offers accessible indulgences that cross all trends, styles and categories. Our brand/stores are organized by color and trend tables which offer a unique and easy-to-navigate shopping experience.

Q: Charming Charlie has been a case study for success. Are there further expansion plans?

 CC: Yes. We currently have over 290 stores in the U.S., and we plan to open approximately 50 more locations in 2014. We are also building flagship stores, which is really exciting! They will be located at Fashion Show Mall in Las Vegas and on Fifth Avenue in Manhattan. Looking beyond the U.S. market, our first Canadian store will open this fall, and we are considering expansion in Latin America, Europe and the Middle East.

Q: What are your Charming Charlie favorites?

 CC: I love our Sandblast collection, infinity scarves, statement necklaces, whimsical tech accessories and boyfriend watches.

The post Retail Spotlight: Charming Charlie appeared first on PLACES.

Q: Can enclosed regional malls survive and if so, how?

 RS: Absolutely. Some malls will close, but this is largely a result of the landlord not keeping the center relevant to its primary and secondary trade areas. Maintaining relevance to its market through merchandising, marketing and community event programming is essential. As retailers start to expand again post-recession, there’s an opportunity to repurpose the space through accretive remerchandising.

JL: They can if their underlying real estate is in the right place. If a better use of that land is available, developers envisioning a greater investment could easily repurpose it. Ultimately, it’s all about location. If you are in an irreplaceable spot and can afford to put the capital in, there’s an opportunity for growth. The malls in poor locations won’t make it and will be scrapped and re-purposed as something else.

Q: What external factors impact the success or failure of regional malls?

 RS: An important factor is the strength of the local economy in the primary markets the center serves. If there is high unemployment, this will have an adverse impact on mall productivity. The proximity of your competition cannot be overlooked. The strength of the local competition will determine if you are the donut or the donut hole. What is the public perception of the center? The uptick of social media is important, but the ability to spread information through word of mouth is still one of the most powerful tools to employ.

JL: The critical factor by far is location. When you look at Lenox Square outside of Atlanta – if that mall was in Macon, it wouldn’t have made it. But because it was in a high density, central location, you have the right demographics to support sales volume and foot traffic. People need to care about the center in order for it to remain an integral part of their community.

Q: What internal factors impact the success or failure of regional malls?

RS: The physical attributes of the center need to be representative of the community it serves and appealing to those who visit. If you don’t provide the proper upkeep, the center will lose its popularity and become stale. Landlords that did not or could not spend money over the past few years are now paying the price of this inaction. Tenant mix always plays a critical role in the center’s relevancy. Determining whether a tenant is additive, negative or neutral in the shoppers it draws is vital. Owners must be ahead of their competition, and property managers must ensure safety standards that comply with federal regulations. These internal factors should work in tandem for a regional mall’s long-term success.

JL: There also are cost-effective steps malls can take to improve the atmosphere that can still make a significant difference. We see many of our properties regain market share by effectively establishing their place in the community. Fewer and fewer communities today have active town centers, which creates a huge opportunity for malls to serve that purpose. Malls can offer more community events and programming, such as children’s clubs, holiday events or farmers markets, to drive traffic. Some malls even have community meeting rooms. Events and programs enliven the property and bolster its sense of community.

Q: What role does marketing play in driving traffic to enclosed malls?

 RS: There has always been a challenge in quantifying the success of marketing, so in the current economic environment where budgets are being cut the importance of marketing can be overlooked. What mall managers and owners need to remember is that marketing is an integral component to the overall success of the mall.

 JL: You need to have something you can’t get with a click. It’s more about the experience now than anything else. Why would I get in a car and drive 15-20 minutes for something I can order over the Internet and have delivered to my door? The tenant mix is not inconsequential. You have to have stores people want to go to, but it’s more about the experience and the community engagement that you can’t get by shopping online.

Q: What strategies have been effective in improving a regional mall’s appeal? Has that translated to a rise in traffic and leasing?

 RS: Try to reverse the frequency of visits to competitive centers through innovative merchandising, personal services and more “eatertainment.” It won’t eliminate the competition, but it can draw people in for other day-to-day needs, building the traffic you need to begin repositioning your center. If you don’t have a good story to tell, you need to create one. What does your center have to offer, particularly over the competition? If it’s not high-end retail, does it have community events or services for everyday needs? Understand the market and where your story fits into it. Once you have this narrative, you have more leverage to acquire better retailers and improve the merchandise mix. Having strong tenant relations and recognizing potential issues in advance like low stock, poorly designed window displays and late rent payments are all critical to the overall health of the center.

JL: Events, community engagement, happy hours, more restaurants—these are the social elements that retain customer loyalty and provide an integrated experience that can’t be found elsewhere. People go in to Best Buy to scan an item and find out where they can then get the best deal somewhere else. The shopping experience has shifted, and retailers need to be nimble enough to keep up with the consumer and the competition. If you have an abundant capital budget there’s no limit to what you can do. We’ve seen major redevelopments that have made the difference but have also meant $50 million in renovations. From a management perspective, we can add value at less cost. Structure lease terms around the individual tenant’s needs, go space by space looking at sales, and then look at the overall performance of the tenant’s category within the center.

Q: Are regional malls’ successes linked to the success of major department stores? If so, how can department stores and mall owners/managers work together to maximize the mall and store’s potential?

 RS: Retail has changed significantly from decades past. Over the past 15-20 years, everyone became vertically integrated. Department stores had a hold on certain brands, but now they’ve become homogenized so everyone has similar merchandise. They aren’t seeing as much revenue as years past—their sales and traffic are down. Therefore, they are no longer the foremost destinations they once were. The question becomes, what can be done to bring back the strength of the anchor store? The death knell for the regional mall happens every year in the news, but they have soldiered on. Shopping centers will maintain relevance, as people will always long for interaction. JL: From an ownership perspective we immediately look at value. If there’s no link, you run the risk of a department store leaving. This has a significant impact on the value of the center. Property managers watch department stores closely because the success of the center is linked to the anchors. The model for department stores of yesterday has past. Today, a collection of restaurants can be an anchor, like International Mall in Tampa, Florida. “Eatertainment” concepts are emerging, which can include luxury bowling alleys, comedy clubs and concierge theaters. An Apple store can be considered an anchor—the sales there are incredible compared to its square footage. The definition of “anchor store” has shifted dramatically from ten years ago.

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 JT: We all know China’s e-commerce market is big. So big, in fact, that some analysts, including the Boston Consulting Group, believe that it will soon be the world’s largest.

Brick-and-mortar retail are being influenced by e-commerce consumption growth year by year, but they still have their special role in China. When I say influenced, I mean it in a positive light. At Cloud Mall, we believe the Internet is making a smarter consumer — especially in brand awareness, driving consumption both online and in brick-and-mortar retail.

Shopping preferences vary in group age, gender, income, localization and needs. According to iResearch China, a Beijing based research consulting company, “digital goods, books, food, sportswear, apparel and cosmetics are highly purchased online.” Apparel products are very popular in the offline market. Cloud Mall conducted a study in 2013 with men and women age 25-40 from Beijing and Shanghai, and the results showed that most women see offline shopping as entertaining, associating it with  social networking and even physical exercise. In a blind study, traditional shopping will never be 100 percent substituted by e-commerce. However, Chinese men seem to consider traditional shopping boring, time-consuming and tiring. They are more willing to replace physical shopping for a more comfortable way to shop such as online.

Shopping malls are usually located in convenient areas. They offer seasonal discounts, selective brands and additional conveniences to attract people to the mall from hair salons, gyms, and restaurants. To the average Chinese consumer, price sensitivity seems to be most important, unless they find something they really want because of status or need. Then they will purchase on the spot. Typically, the average consumer will take the time and compare online and offline pricing before making a final decision.

It is very popular for Chinese to navigate the web, and pictures have a big influence in online shopping in China. Studies show that many people are compelled toward impulse purchases even though their initial searches were for online leisure activities.

Q: In the United States, different age groups approach shopping differently. Is the same true in China?

 JT: I think the situation is pretty much the same in China. In terms of offline shopping, different age groups seek different shopping experiences. In big cities in China such as Beijing, Shanghai and Guangzhou, there are a lot of luxury and high-end shopping areas but also other segmented shopping locations for specific age groups and income levels. You can find diverse shopping malls distinctly offering electronics or clothing or home supplies, outlet stores, etc. For online shopping, like in any other society, the older generations are less likely to shop online than young people.

Q: Where does the Chinese shopper get their information on fashion and brands?

 JT: As in most societies around the world, China has many different channels: TV, movies, fashion magazines, billboard advertisements and word of mouth. Cloud Mall has found that Internet and social media applications such as Weibo and Weixin are extremely important. Chinese people are also easily influenced by the opinion of friends or family. Mobile platforms with social networking can spread word of discounts, deals and brands quite quickly.

Q: In the United States, shopping centers are increasingly offering luxury amenities like Wi-Fi access, concierge service and high-end dining and entertainment options. Is this a trend in China as well?

 JT: Modern and high-end shopping centers in China offer great services including free Wi-Fi, large food courts, coffee shops, bars, supermarkets, convenience stores. These additional services are premium, comfortable and convenient.

Q: Do shopping malls in China rely on social media and digital marketing to drive retail traffic, or are they more reliant on conventional advertising?

 JT: Both. People in China spend a considerable amount of time every day surfing the Internet and social media direct from PC and mobile platforms. However, basic TV time is always indispensable in an average person’s daily life.

Q: Are global brands facing tax or tariff hurdles to enter the Chinese market?

 JT: In China, there are 15 free trade zones (FTZ); these special zones provide exceptions to the usual customs procedures and allow for preferential tariff and tax treatment. All forms of trade conducted between companies in FTZs and areas in China outside the zones are subject to the usual rules that would apply to imports into China. Importing to China generally involves three types of taxes:

• Value-added tax
• Consumption tax
• Customs duties

Tax rates vary between different types of goods, country of origin or methodology and type of company that is receiving the importation of goods. Cosmetics and watches require a value-added tax plus consumption tax in addition to custom duties.

Q: What is China doing to curb the counterfeit trade, which impacts brand integrity both inside China and globally?

 JT: Counterfeit trade in China is illegal by law. Passing through Chinese customs with counterfeits, the traveler may face a big fine, the detention. Since 2010, the Chinese government has taken different large-scale actions against the counterfeit trade, both online and offline. Many markets originally at the center of the counterfeit trade are increasingly moving away from counterfeit goods, such as Silk Street in Beijing. With the continuous increase of income of Chinese citizens, the trend to purchase counterfeit products is decreasing, due to the quality issue and the image of the person. Both European and American Embassies have Intellectual Property Right (IPR) call-in lines set up in China, and together with the Chinese government are devoting themselves to stamp out counterfeit issues.

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