Retailtainment has become a significant draw for consumers, especially now as many are being more cautious with their spending dollars. According to research from AIScreen, the experience has boosted store visits and sales by 30 percent.
PREIT, which focuses on businesses transforming traditional malls into more innovative districts, is at the forefront of this trend.
In-store shopping isn’t dead
Instead of sitting home and shopping, Joe Aristone, executive vice president and chief revenue officer told GlobeSt that “people are looking to have more social experience.”
“What you’re finding is that retailers are using their physical brick-and-mortar stores to support their online business,” Aristone said.
“So what they’re trying to do is to get consumers, if you are going to buy online, at the minimum, they want you to be able to return goods at the store.”
According to Aristone, retailers have been trying to improve their entertainment offerings to a broader consumer base and get people to stay on their property longer.
“Both of those things are being driven by how we merchandise the assets, the tenants we put in, and entertainment things you can’t necessarily do online to compete with that. And then also to have a really wide offering of retailers,” he said.
Where it works the best
But where is retailtainment working best? Right now, it’s the wealthiest suburbs, according to Aristone. So think Scarsdale, New York, which was ranked by GOBankingRates as the richest area in the country, with typical home value exceeding $1.4 million.
PREIT, which has properties on mainly the East Coast, has a major focus in Philadelphia. In that market, it operates up to 17 percent of entertainment theme concepts.
“If you look at Philadelphia, for instance, Cherry Hill, which is an eastern suburb affluent trade area, is doing very well,” Aristone said, whose firm operates the Cherry Hill Mall.
While he added that urban retail has been a “little softer,” – but he thinks the demand will “come back eventually.”
More about the current state of retail and malls
When speaking about malls in general, Aristone has been seeing higher-quality malls thrive the most.
“I think you’re going to see that the top-tier malls are going to continue to do well, continue to dominate,” he said.
But it’s a different story for lower-tier malls that are classified as C or Ds. He believes those properties might “become obsolete at some point.”
Another thing is, that in Philadelphia, Aristone has noticed that mall retailers are starting to downsize.
“We probably had 18 or so malls that were operating in the (Philadelphia) marketplace. And now we’re down to about, eight or nine,” he noted.
“What’s happening is that tenants are realizing that they don’t need to have a store, eight miles or seven miles away. They can kind of operate more efficiently out of one store.”
Eventually, Aristone thinks its mall portfolio in Philadephia will dwindle to five or six.
Overall, it’s been a strong first half for the retail sector in general, as vacancies in the second quarter hit a 20-year low. However, recently there have been growing concerns about the economy. For the fourth straight month, the unemployment rate has increased and the stock market has taken a hit.
PREIT has been tracking sales from its reported retailers and noticed the demand from those in the fashion space has been “softening.” JCPenney is namely seeing less demand too, according to the firm.
While Aristone sees a “mixed bag” with consumer confidence, he isn’t too concerned right now. He stated the trend is “nothing earth-shattering or alarming to the point where there’s a panic button.”
“I think enough strong enough sales is coming out of enough other categories that we can absorb these trend lines, and it’ll be fine.”
