It’s impossible to ignore e-commerce’s disruptive impact on traditional brick and mortar retail, particularly in shopping malls. Pundits went so far as to coin 2017 “the year of the great retail apocalypse”1 as retailers shuttered nearly 7,000 stores, which was an unprecedented number.2 Given that some experts predict America’s nearly 1,200 malls will be cut in half as owners try to prune underperforming properties from their portfolios3, it’s no surprise CBRE predicts shopping centers must reinvent themselves as mixed-use centers by 2030.4
As the malls of today transform into diversified developments of the future, forward-thinking mall owners must think more like city planners. In the same manner that urban areas have been reinvented, so will traditional malls. As a result, malls are incorporating hotels, residential units, bowling alleys, cinemas, higher-end restaurants, fitness facilities, and other leisure amenities into these shopping’ destinations. These proactive actions are a good start but they are still not enough to fill the void.
We at 1776 believe that the demand is still there for this gathering place – it just needs to be repurposed for the shifting economy. This is why we are excited to partner with one of our country’s leading mall operators, PREIT, to open a 1776 Retail Incubator at the Cherry Hill Mall in southern New Jersey. This new campus will expand 1776’s model of delivering flexible work environments and entrepreneurial incubation services in a suburban center of commerce. It’s only logical that the retail and work worlds will collide to create entirely new ways to use space as part of the continued evolution of live/work/play integration.
As the lines of ecommerce and brick and mortar continue to blur, delivering a 1776 campus within a retail center makes a lot of sense for founders, entrepreneurs, and retail companies.
I’ll hit a few of the highlights below:
The 1776 Retail Incubator will provide dynamic programming to help startups pilot products and technologies in a consumer-facing environment. Our unparalleled experience in delivering incubation services alongside our strong mentor network, will help iterate and refine an entrepreneur’s go-to-market strategies based on real world feedback. 1776 Members operating out of our mall location will have the ability to pilot new technologies, host product launch parties, gain real customer feedback, and have access to 1776 startup focused cohorts to help build their companies and be competitive in the marketplace. Being located inside a retail center will help reduce the risk of starting a retail company and act as a research and development arm with corporate partners – all while maximizing the reach and economic impact of true innovation.
Access to Amenities
By providing a work environment within malls, 1776 members will have access to an incredible amenity base – from parking capacity that is nearly unlimited (certainly far better than most office parks) to restaurants and bars, to the aforementioned leisure activities. Really, if you poll our members, all of the top amenities they require near our locations can be found in one shopping complex.
Better Space for Existing Tenants
The back office space in most retail stores is truly “back office.” Retailers strive to maximize square footage for their revenue producing products and services. The downside is that the office and management services are often relegated to dim and depressing environments. But that can change as existing retailers within a mall leverage the 1776 campus for office needs – for everything from inspiring work environments with plug and play functionality, to the ability to host meetings when out of town corporate superiors are visiting, and even a place to conduct job interviews. And let’s not forget the importance of collaboration and innovation our campuses are designed to promote, allowing managers and employees of one retailer to connect with those of another (as well as with startups and other corporations) has truly exciting potential.
We are excited to open the East Coast’s first Retail Incubator and flexible work environment at one of the most successful malls in the US. By partnering with 1776, PREIT (and other mall operators) can offer their existing tenants and consumers a differentiated amenity that drives increased traffic, which in turn drives increased sales at other retail and F&B stores within the property. The net effect is increased revenue flowing to both the retailers and the landlord while providing a great service to the the community.
In short, 1776 fundamentally believes that malls will continue to play a big part suburban communities. Mall operators must rethink how they deliver goods and services to both their consumers and retail tenants. 1776 is well positioned to be a strategic partner to this asset class – helping them reinvent how they service the community.