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class="copy-alert" style="display: none;">Link copied</div></a></li> </ul> </div> </div> <div class="entry-content"> <div id="attachment_174028" style="width: 810px" class="wp-caption alignnone"><img fetchpriority="high" decoding="async" aria-describedby="caption-attachment-174028" class="wp-image-174028 size-full" src="https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich.jpg" alt="To offset empty space, mall operators are offering short-term shared space arrangements to digital merchants. “BrandBox” from Macerich, a nationwide mall owner, is an example." width="800" height="300" srcset="https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich.jpg 800w, https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich-300x113.jpg 300w, https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich-768x288.jpg 768w, https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich-570x214.jpg 570w, https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich-150x56.jpg 150w, https://www.practicalecommerce.com/wp-content/uploads/2019/04/BrandBox-by-Macerich-500x188.jpg 500w" sizes="(max-width: 800px) 100vw, 800px" /><p id="caption-attachment-174028" class="wp-caption-text">To offset empty space, mall operators are offering short-term shared space arrangements to digital merchants. “BrandBox” from Macerich, a nationwide mall owner, is an example.</p></div> <p>Looking to rejuvenate their stores and slow the wave of closings, many retailers and mall operators have embraced experiential retailing — shifting from selling products to providing an “experience” that sometimes does not include selling anything.</p> <p>Instead, shoppers can drink wine, talk to a personal shopper, listen to music, meditate in a pod, view a small sample of products, and perhaps try on some clothes. I <a href="https://www.practicalecommerce.com/can-experiential-retailing-help-brick-and-mortar-stores" data-wpel-link="internal">wrote about this</a> 18 months ago, expressing skepticism.</p> <p>All these experiential efforts cost money, and after two years of hype, the attempts at personalization, immersion, and entertainment have not persuaded consumers to buy more.</p> <p>Indeed, up until the final three months of 2018, indoor shopping malls with “experiential” service-oriented tenants didn’t benefit from more shopper traffic, let alone sales, on a year-over-year basis when compared with indoor malls without any of experiential tenants, according to data intelligence firm Thasos.</p> <p>At some point, retailers need shoppers to buy their products.</p> <h3>Store Closures Soar</h3> <p>Through mid-April, U.S. retailers announced the closing of 5,994 stores in 2019 while opening 2,641, according to real estate analysis firm Coresight Research. That number is more than all store closings in 2018 when there were 5,864 closures and 3,239 openings. More than 2,000 of the closures this year are from Payless Shoes, which filed for bankruptcy.</p> <p>As quoted on CNBC.com, Deborah Weinswig, founder and CEO of Coresight, stated, “I expect store closures to accelerate in 2019, hitting some 12,000 by year-end. The slowdown we saw in 2018 seems to have been a brief respite in what’s a steady, long-term trend.”</p> <p>Retailers that are shuttering stores include Victoria’s Secret and Bed, Bath & Beyond, two chains that ranked among the top 10 in experiential retailing, according to a 2018 report from JLL Research. In February, Victoria’s Secret announced plans to close 53 stores this year. Same-store sales at the retailer fell 3 percent in the 2018 fourth quarter from the same quarter in 2017. This month Bed, Bath & Beyond reported that it plans to close 40 stores in 2019.</p> <h3>Saving Malls?</h3> <p>In an ironic twist, it will likely be online merchants that will lease space in malls. I’ve <a href="https://www.practicalecommerce.com/ecommerce-merchants-embrace-brick-mortar" data-wpel-link="internal">addressed this trend</a>, describing how ecommerce stars such as Warby Parker and Caspar were signing mall leases.</p> <p>Late last year mall real estate investment trust Macerich Company launched a new retail option called BrandBox at Tysons Corner Center in Virginia, near Washington, D.C. It offers retail space to digitally native brands that want to try brick-and-mortar.</p> <blockquote><p><span style="color: #993300;">In an ironic twist, it will likely be online merchants that will lease space in malls. </span></p></blockquote> <p>The physical walls within each BrandBox are movable, accommodating two to seven brands. Stores can range from 500 to 2,500 square feet. Each brand has its own mini-store inside a large space. Brands inhabit the stores for six to 12 months. This gives the brands a venue to test new concepts. Macerich provides shelving, data on foot traffic, radio-frequency identification tagging for inventory, and marketing assistance. Tenants pay Macerich a monthly fee for the prepackaged service.</p> <p>Macerich intends to expand BrandBox to locations in southern California, Chicago, Philadelphia, Portland, Oregon, and Scottsdale, Arizona. The company says it has identified more than 500 online brands that could benefit from such an arrangement and in a February earnings call, executives said they are in talks with three current BrandBox tenants for long-term leases.</p> <p>Other malls are experimenting with similar concepts. The Simon Property Group has a business model called “The Edit” at its Roosevelt Mall in New York. Another mall operator, French-based Unibail-Rodamco, which owns New Jersey’s largest mall, Westfield Garden State Plaza in Paramus, opened The Gathering Shops. The store has 15 to 20 boutique pods in which local brands can secure a portion of the 4,700 square feet in one of the country’s most successful malls. The Gathering Shops also provides store staffing and an ecommerce site.</p> <p>A start-up called Fourpost has partnered with Mall of America in Minnesota and West Edmonton Mall in Alberta to set up 20 to 30 Studio Shops that feature local brands.<br /> </p> <h3>Omnichannel</h3> <p>Mall operators are experimenting with methods to fill empty retail space. Retailers are trying to find ways to increase sales and find the right omnichannel balance between physical stores and online.</p> <p>Pop-ups and short-term mall rentals are likely only a temporary solution to a complex dilemma. Eventually the malls will exhaust the supply of short-term tenants because many small ecommerce merchants are not ready for brick-and-mortar. Larger digitally-native merchants such as Warby Parker and Caspar could help solve the empty space problem <a href="https://www.practicalecommerce.com/ecommerce-merchants-embrace-clicks-to-bricks" data-wpel-link="internal">by establishing permanent stores</a> in malls across the country.</p> </div> <div class="post-footer"> <div class="article-sharing"> <p class="sharing-label">Share this article:</p> <div class="article-sharing-link"> <input class="shortened-url" name="shortened-url" title="Shortened URL" value="https://pec-ly.com/?Jgz" type="text"></li> <a title="Copy URL" rel="nofollow" class="copy-pec-link" onclick="ga('send', 'event','Article Top','Copy');" data-link="https://pec-ly.com/?Jgz"><img src="https://www.practicalecommerce.com/wp-content/themes/pec/images/copy-link-icon.png" width="32" height="32" alt="Copy share link" loading="lazy" /><div class="copy-alert" style="display: none;">Link copied</div></a> </div> </div> <div class="post-navigation"> <span class="prev-link"> 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