Why mall developers must continue to be innovators
While COVID-related closures and restrictions have been an economic blow to many industries, retail and mixed-use centers have been among the hardest hit. The public engagement and social drive that underpins the design and operation of the best centers transformed almost overnight from a gender-defining asset into a crippling liability.
Fortunately, retail trade has largely recovered. Today, the appetite for innovation and experimentation is reinvigorated. Owners and operators are doubling down on recruiting immersive and engaging tenants and embracing inspired new brands that inject life into lifestyle center environments. Undaunted by historic disruption, they are showing renewed enthusiasm for experiential concepts and using different uses and new tenants to stay relevant in a rapidly changing business landscape.
To understand why this happens – and why it matters – we need to start at the beginning, with the origin story of the format: the genesis of the first Lifestyle Centers.
My Dad, Dan Poag and Terry McEwen created and popularized the lifestyle center concept more than three decades ago, marrying the convenience and security of easily accessible stores with designs that have upped the ante with national brands, restaurants and elevated architecture, landscaping and amenities. They coined the term “lifestyle center” to describe these open-air environments – antidotes to the closed suffocation of traditional malls and the sterile, transactional monotony of malls.
When the nation’s first lifestyle center, Saddle Creek, opened in 1987 outside Memphis, Tennessee, it featured many elements that would soon become synonymous with lifestyle center design, including public gathering spaces and landscaping that enhanced the consumer experience. The retail focus was on fashion tenants and restaurants, bringing national brands and household names to Memphis for the first time. Over the next two decades, lifestyle centers grew larger and more experiential, but the formula remained relatively unchanged: create large spaces, a strong dining component, and bring big brands into new markets.
Things started to change after the recession of the late 2000s. The experience became even more accentuated and national brands became more prevalent and less unique. The biggest change has been How? ‘Or’ What this experience was delivered. Lifestyle centers have begun to include explicit experiential tenants, new and different dining concepts, and dramatically expanded entertainment experiences, as well as creative and engaging new fitness brands. The common thread was the social element, moving lifestyle centers away from the transactional origins of shopping malls and creating true community gathering spaces. Lifestyle centers had already moved shopping malls from place to place. to buy in a place with things to do– now they were places for be.
But in 2020, pandemic restrictions and consumer concerns have crippled social interaction at the heart of thriving lifestyle hubs. Being outdoors allowed lifestyle centers to continue operating, but the experience was limited as people feared large gatherings. As the pandemic has subsided and normal life has (largely) resumed, questions have arisen. Would developers of living centers and real estate professionals change their approach? Would leasing strategies become more conservative, protecting bets against future disruptions?
Far from there.
An industry initially rocked by COVID shutdowns and public health limitations has instead doubled down on experience — and it’s working. The popularity of experiential concepts, far from diminishing, has increased. Not only has the need for these spaces and experiences persisted, but the industry has seen a resurgence of interest in New restaurants, fitness brands and creative entertainment concepts. It’s as if consumers, aware of what they were missing, made up for lost time. Restaurant sales topped pre-COVID numbers (before slowing with recent inflation concerns). The challenge for most restaurateurs hasn’t been demand, but hiring and staffing.
Innovative dining concepts like The X Pot at Roosevelt Collection in Chicago offer a truly unique dining experience. Brands like Postino WineCafe at LaCenterra at Cinco Ranch in Katy, Texas are specifically designed to make socializing a central part of the dining experience. New creative brands like the Museum of Dream Space (about to open at Roosevelt Collection) and its “immersive and creative playground” of exhibits and interactive experiences are also making waves.
It is possible to stand out by introducing more brands, experiences and environments that are conducive to storytelling and creating memories. Restaurants can become social hubs, as well as branding and cultural phenomena. Early Lifestyle Centers are very different from today’s Lifestyle Centers. The post-COVID experiential boom continues to gain momentum. Entrepreneurs and brands see what’s happening and they want to be part of it. Because innovation drives innovation and success breeds success, new concepts and creative ideas come together and create a critical mass of engaging retail, dining and entertainment businesses.
Going forward, lifestyle center owners and operators looking to keep spaces cool will need to be proactive and embrace these exciting new concepts. Those who do so will not only set a post-pandemic industry standard, but will also continue a great tradition that has placed lifestyle centers at the forefront of retail innovation for over 35 years.
Josh Poag is President and CEO of Memphis Poag Shopping Centers, a retail management and development company that operates a portfolio of lifestyle centers in multiple markets across the country. To contact Josh directly, email [email protected].