The Future of Retail
Minnesota’s favorite alpine skiing champion, Lindsey Vonn, recently took the ceremonial first run at Big Snow, a new ski park in New Jersey. The slope is 1,000 feet long and 200 feet wide, with a 16-story vertical drop. The air temperature is a steady 28 degrees Fahrenheit, without any threat of the wind chills that Vonn grew up skiing through at Buck Hill. That’s because Big Snow is an indoor ski park—first in the nation—attached to a new shopping mall that will serve as a litmus test for the future of retail. It’s called American Dream.
Nearly three decades after opening Mall of America to awe and skepticism, the Ghermezian family’s Triple Five Group finally has its follow-up shopping mecca near the Meadowlands in East Rutherford, New Jersey, just 10 miles from Manhattan. Plagued by years of delays and once described by former New Jersey Gov. Chris Christie as “the ugliest damn building in New Jersey and maybe the whole country,” American Dream is smaller than MOA by about 2.6 million square feet; however, with a bigger emphasis on entertainment, it offers attractions you won’t find in Bloomington: a skating rink, a water park (MOA is due to open one of those in 2022), and the indoor ski and snowboard park. It, too, features a Nickelodeon Universe theme park.
Back in 1992, no one hailed the Ghermezians as visionary for prioritizing entertainment over retail. If anything, the roller coasters in the middle of the mall were seen as a novelty. Today, struggling malls would give up their Gaps and Victoria’s Secrets for a fraction of MOA’s entertainment power. It continues to draw firsts, onlys, and tourist attractions, some of the latest include the Sugar Factory, where patrons pay $36 to slurp 64-ounce goblets filled with drinks of rum and gummy worms, and McKinsey & Co.’s Modern Retail Collective, a laboratory that pairs up-and-coming brands with the next wave of technology designed to enhance the shopping experience.
Mall of America is working to get from a retail/entertainment split of about 30/70 percent to 50/50. American Dream starts at 55 percent entertainment. It’s no accident that Triple Five left “mall” out of the name. And yet, the Ghermezians’ fundamental strategy remains largely unchanged from the early days of MOA: Draw people with eye-popping attractions, and they will leave with full shopping bags.
Just not quite yet. American Dream is being rolled out in phases, and no stores will even open until March. Symbolic?
Experience has become the buzzword in retail. In November, lululemon opened one of its largest stores—second only to Chicago—at Mall of America. Beyond the racks of yoga pants, the lululemon “experience center” features a smoothie bar, a fitness studio, meditation room, and locker rooms. “This is built to be a mindful space, whether you come sweat with us, meditate, or hang out,” lululemon vice president of experiential retail Maureen Erickson told me before the store opened in November. “We are building a cool strategy around how people experience our products.”
The big question in this era of same-day delivery and conscious consumption: Do experiences drive sales?
You won’t hear Life Time founder and CEO Bahram Akradi talk about his new Life Time Edina at Southdale driving traffic into the mall. His focus is on completely rethinking best uses for that prime real estate. I recently stood on Life Time’s rooftop pool deck at Southdale—the same mall where I worked my first retail job in high school. As the sky turned pink behind the cabanas and bar that will spring to life in just a few months, I thought to myself: If this is the future of the American shopping mall, I’m on board.
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As we enter a new decade, TCB is asking some big questions about what the future of retail will look like here in the Twin Cities, from Nicollet Mall to Grand Avenue (see “20/20?: No Clear Vision for Retail”). And join us Jan. 21 for TCB Talks: Retail 2030, where we’ll continue looking forward with experts in marketing, product development, e-commerce, and commercial real estate. Our event takes place at MOA. While you’re there, check out McKinsey’s retail lab and b8ta, another new store that showcases the next wave of retail technology and startup brands. Consider rounding out your afternoon with a workout at lululemon. After all, it is January.
And when it comes to goal setting, read “Secrets of Success,” filled with insights on how local business leaders manage their time, inspire their teams, and, perhaps most importantly, find balance—something we could all use more of in 2020.
Happy new year!