To the editor:
The digital age has presented mall operators in Kane County with their greatest challenge in a generation. Centers like the Charlestowne Mall that once dominated the local market are now rethinking their long-term plans as so many consumers across the region choose internet shopping over a trip to stores such as Macy’s, Sears or Kohl’s.
This is a nationwide issue that spans well beyond the St. Charles area and represents a sea change across the industry. As e-commerce takes more customers away from traditional retail, malls face the prospect of losing the foot traffic they need to remain financially viable. Operators are already developing new strategies for capturing consumer interest with attractions that bring people back to the mall and keep them inside.
One of the most promising strategies calls for replacing anchor retail spaces with recreation, entertainment and educational centers that give consumers unique, family-friendly experiences they simply can’t find or replicate on the internet. Data have shown that this approach is already emerging as a nationwide trend.
While overall shopping center space in America grew by 0.8 percent over the past four years, space filled by apparel stores fell by around 3 percent, according to an analysis by the CoStar Group. Over that same period, there has been a robust 6 percent increase in the amount of large shopping center spaces filled by recreation and entertainment tenants.
Mall operators are starting to recognize that they can create a crucial opportunity for themselves and their investors by repurposing a vacant department store into something fresh and new for consumers.
For example, as part of pursuing a recreation-oriented strategy, General Growth Properties became the first American mall operator to sign a deal with KidZania, an experiential learning center for children that builds real-world skills in an engaging environment. This concept, which has 24 locations overseas, is a prime example of a business model poised to transform struggling anchor spaces into thriving hubs of activity that give millions of families a new and compelling reason to visit their local mall.
The bottom line is that the new challenges facing retail do not need to mean the end of the Charlestowne Mall and other shopping centers nationwide. Like any other shift in the market, it is just an opportunity to find a new and better strategy for success.
Acting CEO of KidZania USA