The mall is likely the last place you want to be on Labour Day weekend as families, down to the wire, prepare for the start of the school year. But what if I told you that while at the mall, along with picking up new clothes and school supplies, you could also get your groceries, record a podcast, grab a glass of Prosecco, relax in a Turkish bath and try your hand at walking on a tight rope?
With the blows the retail industry has been taking of late, the thought of an activity-filled day at the mall may seem surprising. In the past decade, more than 1.3 million retail workers in the United States lost their jobs, according to the U.S. non-profit United for Respect. Shuttered or soon-to-be-closed retailers – often mall anchor tenants – include Sears, Payless Shoesource and Home Outfitters. And then there’s the growing appetite from shoppers for online shopping. Research firm Forrester expects online retail to double in Canada from five years ago, to 9.5 per cent of all retail transactions.
To stem the flow, mall-management companies are getting creative. Business of Fashion reported in early August that some malls are considering buying up troubled tenants to help them stay afloat, while others are in talks with banks to become lending partners for retailers.
And many are making use of what they already have – square footage – to capitalize on our seemingly insatiable thirst for experiences. And that’s where the podcast, Turkish bath and circus act come in. For the public, the mall isn’t just about shopping anymore. It’s now a place to have fun, to learn, to create. In other words, it is aiming to become the new community centre.
“There’s a lot of talk about the retail apocalypse, but when you look inside [a mall], you actually have a very different perspective,” says Jose Ribau, executive vice-president, digital and innovation, at Cadillac Fairview, which operates 19 shopping centres across the country.
One of CF’s biggest properties is the Eaton Centre in downtown Toronto. With 53.7 million visitors in 2018, according to that year’s Retail Council of Canada Canadian Shopping Centre Study, it is the busiest mall in Canada and the United States. Foot traffic doesn’t always translate into sales, however, and so Ribau’s team for the past three years has been thinking up ways to draw people to the mall, keep them there and get them engaging with retailers.
For the 2018 holiday-shopping season, the mall partnered with tenant Mercatto, an Italian eatery, to create a pop-up prosecco bar in a section of walkway on the mall’s upper level. It was simple – a tiled floor to indicate boundaries, tables, chairs and bubbly on ice – and it was packed. Who doesn’t need a bit of respite during a harried time of year? CF also partnered with Starbucks, another tenant, for the mall’s tree-lighting ceremony, creating special Instagram and Snapchat filters, and a special VIP lounge for customers.
Ribau describes these initiatives as “bringing the retail out into the hallway of the mall,” adding, “it’s about creating engagement, as opposed to waiting for the client to walk into a store.”
Smartphones and the increasing ease and convenience of online shopping has diminished the need to visit physical stores. Because of this, Ribau says, “mall operators have realized, ‘You know what, we have a role to play here not just in having beautiful spaces … but actually making [going to the mall] a warm social experience like it used to be.’”
It is all an effort to return shopping centres to being the coveted “third place,” a term created by sociologist Ray Oldenburg to refer to the place, outside of home and work, where we spend time gathering for social experiences and community. Massive bookstores and multiscreen cinemas don’t draw the crowds like they used to.
But what about an art gallery, which New York’s Hudson Yards mall boasts? A circus-themed recreation centre, which Cirque du Soleil will open this fall at Vaughan Mills in Vaughan, Ont.? A content studio, where you can book time to record a podcast or YouTube video, which was launched mid-summer at Toronto’s Eaton Centre? Or a world-famous food hall, such as the Time Out Market, the Montreal version of which which opens in October at Montreal’s Eaton Centre?
“It is critical that malls be about much more than stores,” writes Roberto Fantoni, Fernanda Hoefel and Marina Mazzarolo in the McKinsey and Co. 2014 report, “The future of the shopping mall.”
“We see the mix of tenant/public space moving from the current 70/30 to 60/40 or even 50/50.”
Celine Tadrissi, spa director for Hammam Spa, is opening the second location of her two-level Turkish-themed spa in mid-October at Bayview Village, in Toronto’s North York. Complete with a steam bath, at 13,000 square feet, it is roughly double the size of her flagship location downtown.
“People come in to to a brick-and-beam location for the experience; we’re lucky that what we sell is experience,” she says. Tadrissi admits she was hesitant to open in a shopping centre and has been in talks with Bayview Village management for eight years. The scene is a world away from her location on King West, where its neighbours are buzzy restaurants, bars and lounges.
Ultimately, it was convenience that won her over – Bayview Village placed no restriction on how she adapted the space (her spa sits in a former Indigo Books location) – and she thinks that same convenience is what will draw customers in: “It’s an extension of what someone is already doing.” Perhaps by coincidence, Hammam is situated beside a ballet school and across from a gourmet grocer, and it is rumoured an Equinox gym will be opening up in the centre, creating a small lifestyle hub in the mall.
All of these changes are necessary reactions to major shifts in the retail market, initiatives and partnerships to help ensure malls are still places where people want to spend their valuable time, but Cadillac Fairview’s Ribau is taking an optimistic view of it all.
“The compelling reason to do [these initiatives] is certainly the disruption we’ve seen within the industry – the changing customer experience and expectation,” he says, “but I think we are trying to embrace the disruption, and do something about it.”
Whether mall operators are innovating because they have to or because they want to, the end result is the same: It’s cool to hang out at the mall again.