On a recent day this summer, visitors to Canada’s major malls may have been entertained by some of the most ambitious events ever produced at these shopping centres.
A Latin culture festival with live music and food kept Mississauga’s Square One patrons partying until midnight. At Toronto’s Yorkdale, fans of TV show Friends explored a 20,000-square-foot exhibit devoted to the sitcom. Bayshore Shopping Centre, in Ottawa, hosted an outdoor farmers market and, later that night, a free movie on a jumbo rooftop screen.
West Edmonton Mall, a leader of hosting mall events, featured a mini comic-con for kids and a mass fitness session, and a massive Soundwave electronica dance party featuring the world’s fourth-ranked DJ sensation, Steve Aoki is scheduled for November. (With a ticket price of up to $130, the event was 80 per cent sold out.)
Owners can actually increase revenue by treating it as a production centre and charging rent not based on sales but on consumer impressions, just like a media platform charges for brand impressions.— Doug Stephens, founder of Retail Prophet
As many Canadian shopping malls leverage more and increasingly formidable events and attractions to draw foot traffic, the role of owners of these assets is evolving, says John Crombie, executive managing director of retail services at Cushman & Wakefield.
“The job of the mall landlord has now shifted to be more hospitality-based,” Mr. Crombie says.
“The concept of the mall is changing from a centre of transaction to a hub where community gathers,” Mr. Crombie says. “So, landlords require a greater understanding of that community and what it takes to engage it.”
Shopping centres across Canada were reinventing themselves prior to the pandemic, as expansive parking lots gave way to master-planned neighbourhoods dense with towers. The e-commerce revolution, which accelerated during the crisis – when online spending more than doubled in one month – has further reshaped the function of malls.
Doug Stephens, founder of Toronto-based consultancy Retail Prophet, says with shoppers able to buy virtually anything from the comfort of their couch, “the retail centre in and of itself is no longer a draw.”
Rather than focusing on building space and leasing space, he says, mall owners now have to think more like an entertainment business.
“And that’s not exactly an easy lift for many of them. It’s a different skill set and it’s going to require, in some cases, reaching out to partners or hiring people with event production abilities,” he says.
Mr. Stephens envisions a time when the Eaton Centre in Toronto teams up with concert producer Live Nation to host after-hour concerts “that might spill out onto Dundas Street.”
He suggests malls could take a cue from toy shop Camp in New York, where just 15 per cent of the floor space is for shopping.
“The other 8,500 square feet is a playground for children with admission charged for special events. So, at Camp, they’ve said, we’re in the business of not just selling toys but selling a toy-buying experience: totally different thing,” Mr. Stephens says. “And shopping-centre owners need to look at it that way, too. They have space and they have audience. There’s no reason why the experience needs to be restricted to people coming in to buy merchandise. That’s a narrow way of looking at it.”
Tenants want to see an event crowd at a mall even if it doesn’t translate into sales because they covet brand exposure, he adds.
He compares the mall to a television network, newspaper or other media platform: “It may be that the purpose of mall landlords now is to attract large numbers of visitors so they can simply be exposed to the brands under their roof – just like a TV network’s entertaining content brings in people to watch advertisements.”
Given today’s omnichannel retail environment, the postevent brand purchase then happens anywhere, any time, Mr. Stephens says.
“If a retailer is exposed to 20,000 consumers on a Saturday afternoon at Square One, what is the value of that to the brand? That’s the way shopping centres need to start thinking. Owners can actually increase revenue by treating it as a production centre and charging rent not based on sales but on consumer impressions, just like a media platform charges for brand impressions.”
Maria Holly, senior vice-president in charge of retail leasing at Shape Properties, owner of Metro Vancouver’s newly redeveloped Amazing Brentwood mall, says Shape’s event-focused marketing is a draw for prospective tenants.
“The brands we’ve secured want to be a part of the excitement” that events create, Ms. Holly says.
Shape Properties’ revitalization of the 28-acre mall includes 11 towers but also a one-acre outdoor plaza and stage, which this summer hosted weekend music festivals and 17 consecutive days of events.
“We built the plaza purposefully as part of our leasing scheme,” Ms. Holly says.
“People do want to get together and connect, and these events and attractions provide more reason to go to the centre.” And while attendance can calculate success, website traffic and social-media impressions are also measured, Ms. Holly says.
It all adds up to a lease rate of $70 per square foot, more than double the national mall average of $30 (according to Colliers), and a vacancy rate of 5 per cent, almost half the average Canadian mall rate (with all unleased space under negotiation, Ms. Holly says).
Event planning starts with tenant collaboration, Ms. Holly says. Her work with retailers on the mall’s 2023 marketing plan included receiving “inspiring feedback” from the tenants.
“The landlord-tenant relationship, the wall between it, has broken down,” Ms. Holly says. “We really need to work together to make both the Amazing Brentwood brand and the brands within it successful.”
Amazing Brentwood at times uses third-party event planners to assist with events. And in some cases, the mall’s retailers, aiming to promote their brand, become event partners. TD Bank sponsored the summer’s weekend festival series.
That connection led Ms. Holly to consider approaching the prestigious TD Vancouver International Jazz Festival to offer Amazing Brentwood’s plaza as a festival venue. “In the future, we’d like to become part of these bigger-known Vancouver events,” Ms. Holly says.
An earlier versin of this article included incorrect information about a dance party. This version has been corrected.