As retail struggles to find new normal, mall remains strong despite headwinds | Business Observer
On September 11, 2001, as the country faced one of the most difficult and shocking times in its history, a mall was scheduled to open in Tampa.
It was International Plaza. It would eventually become a destination, attracting both tourists and locals. But that day, with the horrific news arriving from Manhattan and Washington, DC, and, shortly thereafter, from a field in Pennsylvania, there was nothing to be happy about.
No. September 11, 2001 was not a grand opening day.
“We were pretty much in shock with everyone in the country,” Aj Jemison, then managing director, told local media that day. “There is nothing to celebrate at this time.”
Instead, the mall quietly opened three days later.
Despite the delayed and inauspicious start, International Plaza has emerged as one of Florida’s top shopping destinations, rivaling malls in Miami and Naples for the number of luxury retailers on its list. During its two decades of existence, it has become a must-see destination for tourists who, according to mall officials, represent 50% of its clientele.
And, in an age when the death of shopping centers is widely and loudly proclaimed, it still manages to attract, on average, around 19 million visitors a year.
So why is this? Why does this mall, at a time when e-commerce is king, where physical retailers are closing in droves, continue to be such an attraction?
“It’s no secret that this is a destination for the elite of Tampa and, really, West Central Florida.” R. Christopher Jones, Professor of Economics at the University of South Florida
The easiest way to answer the questions is: International Plaza is no ordinary shopping center. You won’t see shoppers lining up for doorstep sales on Black Friday, and you won’t find an Arcade, Hot Topic, or Spencer’s Gifts.
It’s the type of mall that, rather than attracting groups of teenagers strolling the halls, instead draws world-class athletes looking to buy a little something from Tiffany & Co.
But, if you ask current Managing Director Gary Malfroid, he will tell you that in addition to the wide range of offerings, there is a much more fundamental reason why International Plaza continues to be an attraction: “ People love to interact with people, and that’s what malls give you, ”says Malfroid.
“You can’t get that interaction online, you can only get it in person. I always see it this way: you don’t buy all these beautiful clothes to look at yourself in the mirror. You have to go out so that someone can see them.
The assortment is the niche
Malfroid has managed the property for 15 years – a considerably long tenure for the general managers of the mall at one location. In addition to connections, he credits the mall’s success to both a wide range of retailers and to Bay Street, a sort of row of restaurants on the west side of the mall.
In total, International Plaza has 1.19 million square feet of gross leasable space, which includes the 125,000 square foot outdoor plaza. Mall officials say there are more than 200 stores and 15 restaurants and the mall is currently at “full occupancy.”
Mall officials refuse to disclose current sales data. As recently as 2016, International Plaza was one of the best malls in the country from a metric standpoint, with estimated revenue of $ 925 per square foot, according to a report by research firm Green. Street Advisors. And in 2019, Taubman Centers, then owner of the mall, posted average sales per square foot of $ 972 among its 21 U.S. malls. (Taubman still owns the mall, although mall industry giant Simon Property Group acquired 80% of Taubman in late 2020, in a $ 3.4 billion deal.)
Meanwhile, walking through the mall on a Tuesday morning afternoon in late September, shoppers filled the hallways on both floors and stores were busy. Several storefronts were barricaded as stores, including Gucci and Lululemon, were expanding and several others were preparing to open, including Yves Saint Laurent.
Malfroid says the mall offers the perfect mix of upscale luxury boutiques and stores the average shopper is looking for. He thinks this is a big draw, one that the mall can attract shoppers from almost all economic demographics by providing stores and experiences that they can’t get elsewhere.
And he might be right.
Yes, the mall has Neiman Marcus, Louis Vuitton, Breitling, Tiffany and Co. and Tory Burch as tenants. But it also has a Gap, Abercrombie & Fitch, Dillard’s, H&M and Foot Locker. And while The Capital Grille is on Bay Street, there’s a Chick-fil-A in the food court.
You can see both faces as you walk through the mall, with the high-end luxury stores close together and the pockets of the more standard fare.
Malfroid says it’s by design and largely market driven. Tenants, he says, like to be surrounded by other tenants who sell similar products for the sake of competition.
Due to the design of the mall, its store offerings and the Bay Street component, he says “it really (has) become the one stop shop.”
“You can do anything. You can spend a day here,” says Malfroid. “What we often hear is that if it rains on the beach, the beach flows into International Plaza.”
Rich is the niche
R. Christopher Jones, professor of economics at the University of South Florida and president and chief economist of Florida Economic Advisors, says the real secret to International Plaza’s success lies in much of Economy 101: it has carved out a niche for itself and that niche is not for the average buyer,
“It all comes down to one fundamental aspect… and that is the market that International Plaza is aimed at,” he says. “Your typical customer at International Plaza has a significantly higher family income than your average customer at one of our other shopping centers. “
“It’s no secret,” he adds, “that this is a destination for the elite in Tampa and, really, West Central Florida.”
Jones, unlike Malfroid who sees the mall as a utility shopping mecca, says the mall caters to shoppers in the top 10-15% of the buying public. These are buyers who are less sensitive to cyclical economic changes in the market. This means that when other malls grapple with the aftershocks of a recession or economic downturn, International Plaza does not take the brunt of it.
Due to the types of high-end luxury stores that the mall has among its tenants, it attracts prominent and wealthy people including executives, athletes, and artists. And this type of clientele demands a specific level of products and services that are simply not available in other malls in the region.
“For this richer segment of the retail buying audience, the shopping experience goes beyond just finding the product or service they can get for the best value for money,” Jones said.
“They are looking for personalized service and special attention in the choices they make. In the high-end stores of International Plaza, salespeople are trained to work specifically with this exclusive clientele to be, in effect, their personal shopper.
That same level of service is just not available at garden variety retailers, be it Amazon, Walmart, department stores, or malls aimed at middle-income shoppers, he says.
The future is the niche
Regardless of the average International Plaza buyer – ordinary citizen or wealthy shopper – the mall’s niche allows it to offer people something they can’t get anywhere else. And that’s the crucial lesson for retailers if they are to survive in a fragmented market.
The simple fact, experts say, is that in this day and age, when shoppers have so many options online, it’s not enough to just stock up on shelves, buy some advertising, and wait for people to walk away. present. Brick and mortar retailers need to find a way to deliver a value proposition, a niche, that will give buyers a reason to go out. The alternative faces the same fate as some of the most well-known names in retail – Kmart, RadioShack, Sears, Circuit City.
Many retailers have turned to omnichannel strategies to reach customers in their preferred market. Others have turned to a hybrid model, where customers buy online but pick up the product in stores. And then there are others who sell the kind of products that consumers just can’t – or don’t want – to buy online.
Doug Stephens, founder of the Retail Prophet website, sees a time when “brick and mortar stores will be used more as galleries, showrooms and event spaces.”
“We will be relying on physical retail only for the most convenient products and items that need more physical consideration, like fresh produce, for example,” he says in the National’s “2020 Hot 100 Retailers” report. Retail Federation.
Malfroid’s mall has grown almost alongside e-commerce, but it doesn’t see it as a threat. He believes that e-commerce and brick and mortar will work and work hand in hand, that people who buy an item online will pick it up or bring it back to stores and that there are still certain items that people will want to see. , feel and touch before purchase. “There is a place for both and I think people have figured that out,” says Malfroid.
“But I still think, and I really believe, that we are social people,” he adds. “We want to go out to see each other. We want to go out and walk around and talk and share experiences. And you can’t do that online.