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As enclosed malls decline, ‘lifestyle centers’ proliferate

lifestyle center
Lifestyle centers have been developers’ go-to format for more than a decade.

Get ready for changes in the local shopping scene.

Trends here have matched retail shifts across the country for the past decade: the proliferation of “lifestyle centers”—those pedestrian-friendly shopping areas meant to resemble hometown Main Streets—the decline of traditional enclosed malls and the exodus of stores from downtowns.

The behemoth Mall of America, the state’s top tourist and retail attraction with 40 million visitors a year, plays by a different set of rules—as its staying power and ambitious expansion plans demonstrate.

The rest of the retail landscape, here and nationally, is being reshaped as consumer confidence grows and shoppers’ preferences shift.

The index of consumer confidence rose to 81.5 in August, up from 81 in July. June’s reading, 82.1, was the highest since January 2008.

Shoppers who are more willing now to part with their money can expect broad changes in the retail landscape, according to industry experts.

Among them: efforts to “reposition” regional malls to make them more welcoming and add attractions such as high-end restaurants and health clubs; tinkering with the lifestyle center format, including the addition of big “anchor” tenants and grocery stores; an end to fears that online shopping would be the death knell for many traditional brick-and-mortar stores.

Changes in metro area

There’s evidence that those changes are afoot here. A Whole Foods grocery store opened in July near Maple Grove’s lifestyle centers.

“I don’t think the physical store format will ever completely disappear,” says Denise Ogden, an associate professor of marketing at Penn State-Leigh Valley who recently rewrote a textbook on retailing.

Fastest-growing U.S. retailers

Based on domestic sales increases, 2011-2012

  1. Bi-Lo grocery chain
  2. Michael Kors
  3. Sprouts Farmers Market
  4. Lululemon Athletica
  5. Apple Stores/iTunes
  6. Under Armour
  7. Amazon.com
  8. H&M
  9. Helzberg’s Diamond Shops
  10. The Fresh Market

Source: National Retail Federation

“E-commerce is growing at a faster rate than physical retail real estate,” she says, “but people still like the experience of going into a store.”

It’s the sort of shopping experience they’re seeking that is changing. We found a difference of opinion about the future of lifestyle centers, which have been developers’ go-to format for more than a decade.

“We’re not seeing a lot of them anymore,” says Brian Arial, a principal at DLR Group, a planning, architecture and engineering company that’s working on the Mall of America expansion and changes to Minnetonka’s Ridgedale Center.

Brandon Norrell, senior vice president of business development at Buxton, a customer analytics company based in Fort Worth, Texas, that advises retailers on locations and customer bases, says he’s not seeing a “major downturn” in lifestyle centers.

Shoppers, he says, still want the convenience of parking near a store instead of roaming through an entire mall.

In the Twin Cities, Buxton is working with Famous Dave’s restaurants and Red Wing Shoes.

Looking ahead

Experts’ predictions:

  • New reasons to visit traditional malls. Arial says shopping center owners such as Westfield are upgrading food courts and health clubs to help offset the loss of one or more department store anchors. Ridgedale, he says, plans an interior facelift, the addition of new stores and making entrances more welcoming. Another mall change: the addition of new stores—“value components” in the business’s lingo—to vast parking lots.
  • More in-store “showrooming,” Norrell says. Richfield-based Best Buy is pioneering this trend by offering an array of electronics from different brands and at different price points and allowing consumers to touch and test the merchandise. Many customers go home to hunt for better prices online, but Best Buy hopes to reverse that pattern.
  • Smaller stores. Target and Walmart are among stores experimenting with fewer square feet of sales space. “A lot of it has to do with where they’re seeing opportunity. There’s growth in more urban settings,” Norrell says.
  • Survival of downtown stores that are willing to adapt. Merchants that will survive must “develop some kind of differentiation,” Ogden says. “Many times for smaller downtown stores it’s customer service: that good feeling people get when (store personnel) know them by name.”
  • Custom and personalized products. To counter the sense that goods are a result of mass production, Ogden says, stores are finding ways to make customers feel that a product has been tailored—sometimes literally—just for them. For example, a new Converse store in San Francisco offers custom-designed shoes. Sending personalized coupons to customers’ smart phones when they walk into a store is another way to make them feel special.
  • Pop-up stores. Specialty retailers who set up shop for a few weeks or months at a mall kiosk or vacant mall or downtown storefront can earn rack up sales without big overhead costs.

Online shopping

Arial says online shopping will never replace walking into a store. “Shopping online is not entertaining, it’s not stimulating,” he says. “Most of shopping today is about the experience. All retailers are trying to enhance the customer experience.”

Ogden says Cabella’s, the Nebraska-based outdoor store, has figured out how to return excitement to the shopping experience.

“They become a tourist attraction because it’s not just about shopping,” she says. “It’s about looking at lifestyle stories through their stuffed animal displays, trying different kinds of exotic meat in the restaurants,” which offer elk, wild boar and bison.

“That’s an experience,” she says.

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Comments (3)

Notes from a New Yorker

I love that these "lifestyle centers" are on the rise. I personally prefer to shop and socialize in a place that is more integrated into a neighborhood than a mall - there's more opportunity to get a feel of a unique area (rather than generic, sterilized "mall style"), to visit local shops (as opposed to chain stores), and meet the people from that neighborhood (instead of just an amalgam of everyone from surrounding towns). One thing I really appreciate about New York (and its borroughs - Jersey City, the 6th borrough!) is that necessity dictates that the cute new boutique is right next to the local grocery, and your favorite Chinese take-out place is next to the dry cleaner, across from a stylish wine bar. This means that you can get a bit of fun and whimsy while you're running your daily errands. So when I see the term "lifestyle center" I would hope that as much regular life (not just the cute boutiques and cupcake shops) can be incorporated into these places as possible - I feel it would increase traffic and vibrancy if you make the area not just a fun place to visit, but a necessary place to go to, with the fun stuff mixed in.

Not really part of the neighborhood

I think a lot of these examples are still just 'takes' on the standard shopping center. Look at Arbor Lakes out in Maple Grove. Sure, it isn't enclosed like a traditional mall, but it's still a concrete jungle far away from the residential area. It's not like you'd walk there.

All the store fronts face the street, with large windows and displays, yet all the parking is behind the stores. I almost always enter through the barren and non-descript rear entrances I'm already standing at, rather than walk half a block down, half a block up, and then back down the block to actually reach the store front. And some of the stores don't even have public-accessible rear entrances so you're walking just as far as you would to a mall entrance anyway.

And the large parking lots surrounding these smaller stores often means we have to drive from parking lot to parking lot to reach the stores we want. Our latest weekend adventure there with the better half involved a stop at REI, Baja Sol for lunch, and perusing Victoria's Secret and some of the stores over there. REI and Baja Sol are separated by a super market sized parking lot, but we walked over anyway after depositing our purchases in the car, and VS required driving to another parking lot.

I don't think Arbor Lakes is at all part of the residential neighborhood, pedestrian friendly, or an example of something I'd replace a traditional mall with. I don't see why anyone would prefer Arbor Lakes over a traditional mall for a day of browsing or multi-store shopping. It only holds an advantage if you want to hit one store (by car) and get in and out. Otherwise you're just driving from store to store since it's so spread out.

Important

this is obvious that malls will be decline in future too , as there is no point to start so many malls at one place i will write it about my upcoming website http://www.foxbiz.org