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Investors, developers and retailers are taking a fresh look at B malls, especially those in areas with little competition. One thing that hasn\u2019t changed much about these lower-traffic shopping centers \u2014 along with their flooring, layout and signage \u2014 is the challenge of running a store in them.<\/p>\n
\u201cGet the hell out of there. Leave. Being in a B mall is not an optimal situation, just to begin with,\u201d Lee Peterson, executive vice president of thought leadership at WD Partners, said by phone. \u201cBut if you’re going to be there, there are certain thought processes that go into the A-plus stores that still need to go into those B stores.\u201d<\/p>\n
This flows from Peterson\u2019s notion that every store is a flagship.<\/p>\n
The idea is to maintain the brand’s vibe and meet customer expectations on a smaller scale and usually with fewer resources.\u00a0<\/p>\n
Every store is (not) a flagship<\/h3>\n
Above all, Peterson said, every location \u2014 whether in the Flatiron District in Manhattan or a B mall in Lincoln, Nebraska \u2014 needs top-notch employees. This requires incentive, and it\u2019s not a coincidence that the most beloved retailers, including Wegmans, Costco and Ikea, pay the best, he said.<\/p>\n
\u201cThe importance of associates in any store, and especially a store in a mall that could be struggling a little bit, is paramount,\u201d he said. \u201cIt’s No. 1. When a customer does go there \u2014 which they don’t do as much as they used to \u2014 and there’s an associate in there that really knows what they’re talking about, who is friendly, who remembers your name, who\u2019ll do anything for you, those types of things create a loyalty that is often missing from a B mall.\u201d<\/p>\n
Hiring, like merchandising, should be localized and personal, according to Peterson.<\/p>\n
\u201cIf associates is the No. 1 reason people go back to stores, then there’s a lot of work to be done in B stores,\u201d he said. \u201cAnd I can almost guarantee you that the way headquarters and now AI is analyzing resumes is a huge mistake.\u201d<\/p>\n
Merchandising the store requires thought, too, in order to maximize the sales potential and maintain the brand\u2019s vibe.<\/p>\n
\u201cIf a retailer puts certain flagship items in flagship stores and not in your B store, what do you think is going to happen?\u201d Peterson said. \u201cThat B store is going to fail.\u201d<\/p>\n
Still, while starting with a flagship mentality can be effective, a B mall store is likely to do better with less space and a smaller assortment, according to Peterson and Jeff Sward, founding partner at Merchandising Metrics. In some cases, it may be wise to shrink the space and assortment from what it has been, they said.<\/p>\n
\u201cAny retailer in a B mall wants to think in terms of the best possible brand storytelling, without succumbing to the exuberance of thinking it’s an A store,\u201d Sward said by video conference. \u201cYou’ve just got to make the math work in terms of the investment \u2014 in fixturing and visual merchandising and inventory \u2014 and buy accordingly so that it sells through and you make a buck at the end of the year. It\u2019s about telling the brand story as robustly as possible without tipping over into over-sorting and over-buying.\u201d<\/p>\n
This is a balancing act that requires not just data but also occasional store visits, he said.<\/p>\n
\u201cThere are no secrets there,\u201d he said. \u201cThe retailer\u2019s got to analyze the data through the eyes of the customer. That’s why store visits are so critically important for everybody.\u201d<\/p>\n
The idiosyncracy of location<\/h3>\n
Where a store resides in a B mall also matters, experts say.<\/p>\n
Considerations for anchors and in-line differ, for example, according to Bryn Feller, managing director and senior vice president at commercial real estate firm Northmarq.<\/p>\n
Box stores that have taken over space once filled by department store anchors thrive \u201cwith a low-capex, value-oriented model that fits the trade area and embraces alternative access points,\u201d she said by email, citing Burlington, Ross and T.J. Maxx\/HomeGoods as examples.<\/p>\n
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\u201cThe tenants who right-size their economics, embrace the community, and collaborate with ownership are the ones who carve out sustainable success.\u201d<\/p>\n
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Bryn Feller<\/p>\n
Managing Director & SVP, Northmarq<\/p>\n<\/div>\n<\/div>\n\n<\/div>\n
\u201cThey\u2019ve been able to step into carved-up department space, keep the build simple, and connect to exterior entrances,\u201d she said. \u201cFitness users like Planet Fitness and entertainment concepts like Round1 or Cinemark have also been very successful at stabilizing B malls because they create a dependable traffic engine.\u201d<\/p>\n
Meanwhile, successful in-line stores \u201care those that build a habit loop with the customer, giving them reasons to come back regularly beyond passive walk-by traffic,\u201d according to Feller.<\/p>\n
Both need a good partnership with the landlord, she said.<\/p>\n\n\u201cSuccessful tenants in B malls are the ones that proactively engage with mall management, share traffic and sales data, and adjust to where the center is going,\u201d she said. \u201cThat\u2019s often on the store manager and district leadership, it can\u2019t all be done from the corporate office. In B malls especially, being plugged into what the landlord is trying to reposition the property into is critical.\u201d<\/p>\n
Those stores also remain dependent on anchors no matter how the mall is rated, according to Sward. In one mall with a long-empty Sears store, nearby specialty retailers saw traffic and sales pick up meaningfully after Primark took over the space, he said.<\/p>\n
\u201cIf you’re in an A mall, tucked in the most remote corner where you don’t get much foot traffic, it might be a B store, just because of the location in the mall,\u201d Sward said. \u201cThat’s the idiosyncrasy of location.\u201d<\/p>\n
Retailers must appreciate such variables and remain realistic about any shopping centers\u2019 prospects, but particularly at B malls.<\/p>\n
\u201cThe tenants who right-size their economics, embrace the community, and collaborate with ownership are the ones who carve out sustainable success,\u201d Feller said. \u201cAt the end of the day, retailers succeed in B malls by leaning into what the mall is, not what they wish it were.\u201d<\/p>\n<\/p><\/div>\n
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