Ancillary Retail

MAY 2018

Ancillary Retail magazine is the retail industry’s resource for ancillary income markets. Ancillary Retail will provide relevant news, best strategies and practical tips to help developers and retailers grow and sustain successful businesses.

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34 Ancillary Retail | May 2018 Five Ways Malls Can Make their Centers More Attractive to Retailers Make it easy for retailers to open quickly and cost-effectively. By Melissa Gonzalez I n a time when brands are looking to "test before they buy," leasing teams and mall managers need to embrace flexibility and creativ- ity in order to attract the next wave of up-and-comers. Not all retailers or brands are created equal, and the goals and purpose for why they open a store will vary. Some will be look- ing to test the waters (i.e., launch a pop-up store where sales may or may not be their key performance indicators), some are looking to open their first true flagship location, and others may be rolling out additional locations to match an already tested and proven formula that works for them. As a firm of strategists that have helped dozens of brands open brick-and-mortar pop-up stores, we see the potential advantages of open- ing in a shopping center with robust infrastructure versus venturing out to a standalone main street location where you are handing off the keys and left to fend for yourself. Regard- less of a brand's goals, here are a few key strategies for mall operators and leasing teams to consider to make their centers more attractive to retail- ers. Structures For the New Guard With the average lease term fluc- tuating, leasing teams need to find ways to offer more creative licensing agreement structures. Long-term leas- es continue to shorten while the av- erage pop-up license agreement term continues to lengthen — both on main street and in malls. What once lasted no longer than a month, the average pop-up license term requests are now ranging 3 to 6 months, and sometimes a year as brands are truly looking to test the viability of longer term leases. Digital natives are born with the ability to be nimble and iterate quick- ly as they grow, so they are looking for that when they dip their toes in brick- and-mortar retail. Another wave coming to market are traditionally wholesale distributed companies looking to open branded experience stores but haven't yet been wired to operate physical stores, so they want the opportunity to test be- fore committing to what their longer term physical brick-and-mortar foot- print will look like. Instead of looking at pop-up term license agreements with traditional economic infrastruc- tures, and focusing on the revenue potential today, leasing teams should see these tenancies as customer acqui- sition channels for them to attract new brands to prove the concept at their properties and open opportunities for them to sign longer term leases. Making the Must-Haves for a Standard Offering By standardizing the offerings pre- sented to retailers, mall managers also help make their centers more attrac- tive. It's often an onerous task to get some of the most critical amenities set up at a location so, by equipping spac- es with the must-haves, malls help make their locations infinitely more attractive to move into. Some key must-haves are: • Powerful wi-fi, with an emphasis on powerful. Basic internet won't cut it as connectivity consistency is a necessity. Today's brands are relying on creat- ing locations with "Instagram-able" environments, with Sonos playing songs on a loop and a reliable, mobile POS (point-of-sale). By investing in integrating fiber lines into properties, malls can deliver the high-speed envi- ronments on which brands and retail- Photo courtesy of Happy Returns A Happy Returns Return Bar. POP-UPS

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