Four Reasons Developers Love Lifestyle Centers
There are more than 115,000 shopping centers across the country but just over 400 lifestyle centers. It is predicted that over the next two decades, at least half of these traditional shopping centers will die – that is, unless this new trend toward lifestyle centers continues to grow.
Declining Taste for Traditional Malls
The decline began as the e-commerce revolution began. First, malls tried to combat this decline by incorporating what are called “anchor” stores in all of their malls – stores that would provide the bulk of traffic. Still that wasn’t enough to thwart online shopping’s allure, especially as shoppers typically can buy the same things and more from those stores online.
Then the economic collapse made bargain hunters out of middle- and upper-income shoppers. For a little while, discount stores and outlet malls started seeing the brunt of foot traffic. Yet it wasn’t enough to keep traditional malls from meeting this eventual fate as online retail began its takeover.
What’s left are often colossal remnants of once lucrative mall spaces. In an effort to stop the bleeding, developers are loving the idea of transforming these malls into “lifestyle centers”: places where shoppers go for an overall experience that extends beyond just retail.
Growing Interest in Lifestyle Centers
Initially, anchor stores were replaced with more niche and unique ideas aimed at attracting more shoppers. Things like food courts with outdoor and indoor seating plus music was one way to achieve this. Then specialty shops started promoting giveaways or hosting events on-site.
That helped a little, but it doesn’t bring the constant foot traffic that traditional malls bring. So, how do you build on those niche ideas? You create lifestyle “malls” that are wonderlands of entertainment, dining, and shopping. Developers love these lifestyle centers for four main reasons.
- Attract High-End Clientele. Instead of going downscale to attract bargain shoppers, lifestyle centers actually are attracting high-end shoppers. By including famous high-end boutiques and world-class entertainment, lifestyle centers like the Fashion Square in Arizona or the Victoria Gardens in California are giving luxury shoppers reasons to show up in person.
- Cater to Millennial Tastes. Developers are targeting millennials for day-to-day traffic to these lifestyle centers. By offering things that attract this group, including gaming centers, upscale lounges, and online retail on-site, developers are banking on providing new avenues for home and play for millennials.
- Cheaper to Revamp Than to Build New. The average mall spans close to a million square feet. These new lifestyle centers are only a third of the size. Because the infrastructure already is in place, they are much cheaper to revamp than to build from the ground up.
- Combine Home and Entertainment. In Silicon Valley, a new lifestyle center called Santana Row combines both entertainment and shopping with high-end condos and apartments. With a totally refreshed and detailed design, developers are using architecture and grand fountains to show off a cozy yet upscale lifestyle for residents and shoppers at their center.
Contact me today to learn more about the many reasons developers love these lifestyle centers.