LIFESTYLE RETAIL RISING
by Lim Lay Ying
Property Times, New Straits Times
12th June 2004

Now, more than ever, retail property developers are dishing out shopping malls that do not resemble what we have come to expect malls to look like.

Boxy shopping malls are going out the window – retail property developers are literally, breaking the mould. You might even think that there is a race on to design the most outlandish-looking shopping mall.

The reason these developers are moving away from the conventional “enclosed mall” design for their properties is that they are looking for a paradigm shift in shopping mall design. Roofs are coming off to let in more natural daylight and breezes, and exterior walls are minimized so that the stores can be more visible to customers.

Developers of shopping malls are now changing the look of malls as part of their quest to attract shoppers and make them stay longer so that they will spend more money. Attractions such as amusement or theme parks in malls had fallen short of expectations in generating frequent visits. So instead of traditional boxy stand-alone, enclosed malls, new approaches are being explored to determine what works best to draw people to the shopping centre on a regular basis.

Adapting to Broad Market Shifts

Perhaps the greatest push for the design frenzy is that shopping malls are now viewed as a lifestyle attraction. Because retailing by its very nature is trend-oriented, subject to the changing whims of fashion and design preferences, malls are expected to adapt accordingly.

This need to keep up with market trends has resulted in the creation of new retailers and store types, the demise of old ones, and continuous change in the popularity of retailers and category types. The ever-changing marketplace caused by these broad market shifts in design preferences and retailing trends has led to substantial tenant turnover within malls. This happens even when a centre has not aged significantly in its physical condition but may have fallen short of customer expectations in terms of the range and quality of its tenant mix due to shifts in the surrounding demographics and competitive environment.

Today, in the shopping centre design arena, developers and architects are looking at demographics from a lifestyle approach instead of along the traditional age and income categories’ angle. Lifestyle patterns as well as the target group’s characteristics are now dictating the look of the centre.

“Anti-mall” settings

This trend was already evident in the United States some ten years ago when the Lab, a 50,000-square-foot retail centre in Costa Mesa, California was opened. Developed by Lab Holding LLC, it went after the youth culture which had the spending power and the unique cultural influences it has. When The LAB emerged, it offered young consumers “a place of their own” and next generation retailers and manufacturers a venue to reach these young consumers.

The LAB has taken all the characteristics of a mall, but instead of being anchored by big boxes, it is anchored by Urban Outfitters and Black and Blue, two hot retailers that generally avoid malls. Only 60 per cent of the space is devoted to retail business of any kind. The rest is used for events designed to foster a sense of community. Retailers such as the Habit apparel store and Dr. Freecloud’s music went into the “anti-mall” setting because of the boutique image they could portray instead of one that is of a national chain store.

The same strategy was applied by the developer in the development of The CAMP, another innovative “anti-mall” retail community. Opened in spring 2002, the 65,000-square-foot centre in Southern California, is the world’s first concentration of specialty retailers catering to authentic outdoor sports. The 3.5-acre, US$13 million (RM49.4 million) adventure-sports retail complex caters to outdoor, surf, skate, and snow sports enthusiasts.

Set up not only as a retail venue, the complex is part galleria, part town square (with a diving tank), and offers an educational campus environment. Visitors and shoppers are presented with a range of options – from scuba lessons, rock climbing demonstrations and lessons, to postings on local surf conditions.

The CAMP’s wood, steel and glass buildings house tenants such as Adventure 16 which sells climbing gear, Patagonia, and Cyclewerks bike shop. Complementing the retail attraction are an amphitheatre, a fire pit, and landscaping featuring Zen rock-garden vibes.

The Future of Retailing

In Los Angeles, another exemplary model for the future of retailing is showcased by The Grove, a 575,000-square-foot centre located adjacent to the historic Farmers Market. Created as an urban shopping village featuring outdoor retail and entertainment, developer Caruso Affiliated Holdings built two- and three-storey individually designed shops, restaurants, and a grand movie palace set along a main street and town square.

At the heart of The Grove is a lake with lively fountains which are synchronized to music. Mature trees, shrubs, and flowering plants common to Southern California further reinforce the design and theme. The Grove has become a very popular destination for daytime shopping and evening entertainment amongst the local residents and tourists alike.

The lifestyle-oriented retail development phenomenon is not just hot in the United States. The same trend is occurring worldwide – even in the United Arab Emirates. In Dubai, the Dubai Festival City offers 2 million square feet of gross floor area devoted to retail, leisure, entertainment, and cultural activities. There are also 400 over residential units, a 350-room conference centre hotel, and 400,000 square feet of corporate office space.

At the heart of the Dubai Festival City project is Festival Centre, a regional shopping centre that deviates from the traditional shopping centre stereotype. The shopping centre is planned for a variety of uses – half of which will be devoted to arts, culture, entertainment, cinemas, sports facilities, and restaurants, with the remaining to be occupied by traditional retail tenants.

To further connect Festival Centre to the Dubai community, a river that flows into the Arabian Gulf has been integrated into the development plan to allow for boat travel to the site. The entire project, Dubai Festival City, has been slated for completion in 2006.

Reinventing Retail Through Lifestyle

As lifestyles become more sophisticated and consumers demand more entertaining retail environments, and incredible array of new shopping experiences will emerge and pose lethal competition to conventional retail developments.

But is lifestyle retailing really a marketing hype for an upscale sliver of the overall market, or does it really represent a fundamental shift in how retail property developers are creating shopping and entertainment environments?

Whatever it may be, it is without a doubt that the lifestyle approach to retailing and entertainment can change the shopping experience and add value to retail properties and communities. Some of the ground breaking projects will undoubtedly be more successful than others, and this is because they have taken pains to understand and meet their consumers’ demands.