New Malls for a New Reality
Shopping malls have been an important part of people’s lives for decades. However, the current state of the retail industry demands they reinvent themselves in order to stay relevant and survive. But what distinguishes a thriving shopping destination from one that is outdated or even uncompetitive? At Unibail-Rodamco-Westfield, we spend a lot of time thinking about this, and over the past several years, have focused our strategy on making sure we have the best assets in the best markets with the best mix of tenants, creating opportunities for us to develop better, more engaging destinations.
One of the most important parts of our strategy involves changing the way we interact with our retail partners — from just being a landlord to being an active partner, invested in our mutual long-term success. We are providing digital services, out-of-home advertising opportunities, enhanced amenities, and retail curation to our retailers, restaurants and brands because we understand that their success is intrinsic with our own. Now, more than ever, it’s important to educate our partners on how best to fully leverage the advantages of a physical location.
Secondly, URW is working to make physical retail exciting again — whether that involves marrying brick to click retail or improving the in-store experience. We are embracing an omnichannel future where our destinations play a key role in the brand experience for both traditional and DTC brands. We have made short- and long-term investments to rethink the infrastructure of our shopping centers to help support the omnichannel evolution — from easier pick-up of deliveries by third party services, to industry-leading digital infrastructure at our centers, to even creating services or building capital infrastructure to help facilitate retailers’ e-commerce sales.
And let’s talk about repurposing shopping destinations — or rather, modernizing them to best reengage today’s consumer. Our vision to redefine what retail means in the modern world comes hand-in-hand with a commitment to constantly refresh and customize the offerings available at each center in our portfolio. We make sure our centers are places people want to be by improving both the physical and digital infrastructure, as well as the tenant mix itself — a combination of traditional retail with a focus on dynamic, industry leading concepts in food, health and wellness, fitness, and entertainment.
For example, Westfield UTC’s resort-like setting embodies the luxury La Jolla lifestyle with many prevalent and first to market brands — from Hermes, Alo Yoga, to SoulCylce, as well as diverse restaurant offerings such as Din Tai Fung and Javier’s Finest Foods of Mexico. Adjacent to the center is our 23-story residential tower encompassing 300 residences with high-end services. Westfield Valley Fair in Silicon Valley demonstrates unprecedented growth at 2.2 million sq. ft. of retail space with 42 stores and restaurants having opened this year alone. Its mix of prestigious luxury brands, digitally native start-up retailers, and best-in-class dining and entertainment holds the distinction of being the region’s definitive lifestyle destination. Westfield Century City in Los Angeles reached $1 billion in annual sales just after unveiling a modern makeover in 2017. This is a testament of our success in key markets and how reimagining an asset has redefined the way in which consumers prefer to shop, dine, and be entertained.
Our next project, at Westfield Topanga in Los Angeles, encompasses a former Sears box. Instead of trying to simply backfill the box with anchor tenants, we are completely transforming the front door of the asset using the opportunity to create a true destination. We think it will be a must-visit destination when it opens in 2022 with new market defining restaurants, exciting new retail, additions to our large luxury collection, and a chef-driven Food Hall showcasing some of the area’s top concepts.
So, what does all this mean? The new reality is that the modern-day shopping destination is not going to be the static, entirely enclosed fixture that it was known for in decades past. Change itself will be the lifeblood of its continued popularity and survival. The millennials and Gen Zers whose feet will provide most of the foot traffic in retail centers in the coming decades seek retail, entertainment, and dining with a point of difference. A destination with a cool factor is what gets them out of the house. To attract them, or to create them, operators must cast off formulaic tenant curations and designs and embrace change. Westfield’s purpose — ‘Reinvent Being Together’ — is perhaps more relevant now than ever, and keeps us focused on serving our communities, connecting with our customers, and reshaping how people shop, live, work and play.
Colin Shaughnessy, executive VP of Unibail-Rodamco-Westfield, heads up leasing for Westfield malls in the United States.