Malls Plan for an Altered State of Shopping
For decades, Mall of America has set the gold standard for experiential retail, leaning heavily on entertainment, events, and tourist-attraction restaurants as the draws to get people shopping. But in the age of Covid-19, each of those points of pride is now a challenge—make that a mega-challenge for the largest mall in the land.
“It’s not an easy time to lead,” says Jill Renslow, MOA’s senior vice president of business development and marketing. MOA furloughed the majority of its staff after closing its doors in March, which leaves Renslow and her “small and mighty team” to field the hundreds of calls from mall tenants (there are 520 stores and more than 50 dining options at MOA), while stepping up sanitation practices, figuring out new services like curbside pickup, and thinking about how to move forward in a sector hard hit and potentially forever changed by the coronavirus.
This week alone, luxury retailer Neiman Marcus, which no longer has a Twin Cities presence, became the first department store to declare bankruptcy in the pandemic. Long-troubled specialty chain J.Crew also declared bankruptcy. Nordstrom, which has stores at MOA and Ridgedale Center, announced that it will close 16 stores in other parts of the country due to pandemic losses. The fall out is expected to continue.
Mall of America owner Triple Five Group has a lot at stake: its newest mega-project in New Jersey, American Dream—a topic of national curiosity—hadn’t even cut the ribbon on its retail section when the pandemic hit. Now, co-CEO Don Ghermezian says American Dream will shift its focus away from retail. Original plans called for the center, which includes an indoor ski hill, theme park and water park to be almost 50 percent retail; now, Ghermezian says that’s been revised to 30 percent retail; 70 percent entertainment.
MOA’s ratio of retail to entertainment is roughly the inverse of American Dream’s plan, but has been trending more towards attractions like Crayola Experience and immersive virtual reality games along with dining experiences that fall into the cateogry of “eatertainment,” like Sugar Factory with its $32 bubbling drinks. What happens now to roller coaster rides and escape rooms, not to mention store fitting rooms and restaurants?
“A lot of us are starving for entertainment right now. We want to get out of the house, have fun, and experience things you can’t do at home. That’s been the key to our success for so many years, we’ll definitely capitalize on that,” Renslow says. “Shopping will still have a unique place in brick and mortar—people enjoy that instant gratification. But it’s going to be a long road. We believe experiential retail will continue to be important, along with the essentials we need in our daily lives.”
A Deloitte retail advisory out this week urged stores to “challenge orthodoxies.” Suggestions included rethinking the store as a showroom for livestreaming online shopping events or fulfilling orders; selling services to go along with products, such as an online cooking class that comes with the purchase of kitchen gadgets.
“A crisis is the time to project forward and really look at what’s possible—new partnerships; elements of innovation even beyond technology,” Renslow says.
Globally, the MOA team is watching closely as malls overseas begin to reopen. In the U.S., Simon Property Group, the largest mall owner, has already begun a phased reopening of at least 60 centers primarily in southern states including Arkansas, Oklahoma and South Carolina. Locally, Renslow says she speaks regularly to other Twin Cities mall managers. “I think we’re all closely aligned,” Renslow says. “The focus is collaboration, not competition.”
In Minnesota, malls have not yet been given a set date for reopening. But the first step, curbside pickup, began last Monday with better-than-expected results. MOA, Rosedale Center and Galleria report strong consumer interest and smooth fulfillment from participating retailers.
“I think curbside will be an amenity we offer going forward. It’s been very successful,” says Rosedale general manager Lisa Crain.
Rosedale has been using the downtime for maintenance and improvements. “We’ve done extensive sanitizing, parking lot painting, some store buildout work has continued,” Crain says. New hand sanitizer stations will be installed along with signs reminding guests to keep a distance. Furniture in common areas hasn’t been removed as of yet, Crain said, but it’s being reconfigured to create more space between chairs and tables.
Rosedale Center is rethinking its public seating areas as it eyes reopening.
It’s possible that group size may be limited when the mall reopens, along with the number of shoppers allowed in a store at a time. Entrances could be limited as well, Crain says, to make it easier to monitor traffic flow. It’s likely fitting rooms will be off-limits, at least, at first.
At Mall of America, reopening will occur in stages, Renslow says. Retail first; then restaurants with limited capacity. Each attraction is being analyzed individually. Some Nickelodeon Universe rides might operate at reduced capacity; others might not open at first due to the number of touch points.
Both Rosedale and MOA have used their public spaces to host blood drives while the shopping centers are closed. At Rosedale’s new Potluck food hall, some local vendors have been able to use their kitchens to prep premade meals for sale beyond the mall. In recent weeks, Nordic Waffle has started wholesaling to local grocers; Smack Shack is hosting virtual cooking classes out of its Rosedale space. “We’ve been very impressed with their ability to adapt,” Crain says.
Both malls have shelved expansion plans—Mall of America is putting a planned water park on hold indefinitely; Rosedale, which had announced an ambitious $100 million plan for a hotel, grocery store, office tower and more, is pushing that off at least six to 12 months, Crain said. “We need to focus on our core business at Rosedale and make sure we reopen successfully.”
Both malls have also been talking individually to tenants that are requesting rent relief. “We’re doing our best to be as flexible as possible with tenants,” Renslow says. “We recognize it’s a huge challenge for the industry; we’re feeling the financial burden, too.”