Local Malls Reinvent Themselves in the Fight for Survival
Malls throughout Southeastern Pennsylvania are shifting the focus from strictly retail to creating an experience so they can continue to compete in the e-commerce era.
King of Prussia Mall.
Tom Comitta is sitting in a booth talking philosophy at the soon-to-be-relocated Pappone’s Pizzeria on Baltimore Pike in Middletown Township. But it isn’t a discourse on Kierkegaard or Schopenhauer. Rather, it involves the axioms of retail, specifically as they pertain to the Granite Run Mall—or, as it will soon be called, the Promenade at Granite Run.
As most Americans have been clicking their way to commercial bliss over the past decade, malls like Granite Run have been experiencing annual sales slides that have made them borderline obsolete. According to the New York-based International Council of Shopping Centers, the average mall visit in the 1970s lasted two hours and 15 minutes. By 2000, it was down to 19 minutes. Exploring had been replaced by seek-and-find missions.
The president of West Chester-based Tom Comitta Associates Inc. has served as Middletown’s planning consultant since 1979. Munching on a sandwich, he spreads out a schematic for the Promenade, which is being developed by BET Investments and will incorporate open spaces, residential units and greenery into a 21st-century retail concept designed to create a distinct town-center vibe. It’s not quite a last gasp against the ever-encroaching Amazonization of American shopping, but it’s close.
“Time will tell,” says Comitta, whose company represents 21 municipalities in the Mid-Atlantic. “What’s happening from a business standpoint is a feeling that people yearn to be in an outdoor setting. What’s not to like about an open-air, walking, shopping, dining and playing experience?”
Artist rendering of what the new Granite Run Mall will look like.
The Promenade is part of a regionwide rethinking of the retail concept. The hope is that the creation of mixed-use destinations will compel people to leave their screens and rediscover the shopping experience. Only this time, instead of putting everything under one roof, the various components will be spread across a “village” of sorts. It’s happening at the Plymouth Meeting and Exton malls, as well, and the concept has already taken shape at the King of Prussia Town Center. That sprawling “lifestyle” hub west of the original KOP facility boasts more dedicated retail space—eight department stores, 400-plus boutiques and over 40 restaurants—than any other mall in the country.
Developers are betting that breaking the traditional paradigm will spur an influx of visitors and spenders. “The traditional mall model was heavy on apparel and accessories, and department stores offered even more apparel and accessories,” says Heather Crowell, senior vice president of corporate communications and investor relations for the Pennsylvania Real Estate Investment Trust, which owns the Plymouth Meeting and Exton properties. “Over time, some of it became homogenized. We’re adding new fashions and other concepts, so the malls aren’t so cookie-cutter.”
The numbers indicate that consumers nationwide are becoming ever more tied to their computers and devices to purchase goods. In February, the National Retail Federation predicted that online sales would increase at a rate of 8-12 percent in 2017. A prime example of malls’ problems came last holiday season, when visitor numbers to brick-and-mortar stores dropped 10 percent through Dec. 17, according to the Prodco Retail Traffic Index. Over the first seven months of 2017, real estate investment trusts reported an 12-percent drop in sales, according to a report published in National Real Estate Investor. NPD Group, which tracks retail trends, recognized the consumer personality change and issued a challenge.
“Mid-tier malls are going to need to step up their game,” NPD chief industry analyst Marshal Cohen told Investor’s Business Daily. “The food court won’t be good enough.”
Today, the key word is “experience.” Consumers of all ages want more. That’s why the Promenade will replace the AMC movieplex with a CineBowl & Grille that includes bowling, movies, arcade games and food. After all, you can sit and watch a movie for two hours at home—and much more cheaply. Make it a destination, and the paradigm could change. People are still interested in going out, but they’re less likely to schlep from location to location. They want it all in one stop.
For proof, simply head up the New Jersey Turnpike to the 3-million-square-foot American Dream Meadowlands, a monstrous shopping-and-entertainment complex set to launch in early 2019. It will include a water park, a themed amusement park, an indoor ski center, an aquarium, a miniature golf course, a theater and an ice rink, plus dozens of high-end shopping opportunities. It’s what developers and owners think customers want. “Right now, people are talking about entertainment as the most important thing,” Crowell says. “I think you’ll see continued evolution, with health-and-wellness companies and smaller retailers coming in.”
Plymouth Meeting Mall.
Ninety-two million cars travel through the area around Plymouth Meeting Mall each year. That’s a pretty big number—and a potentially lucrative one, too. “The mall occupies the best location in the Philadelphia suburbs,” says Crowell.
Thanks to the confluence of the Blue Route, the Pennsylvania Turnpike, the Northeast Extension and the Schuylkill Expressway, along with the crowded residential areas that surround Germantown Pike, there can be little excuse for the mall to fail—unless it has the wrong collection of stores. Although occupancy has been high at the mall over the past several years—last December, PREIT reported 94-percent occupancy—it hasn’t been able to attract visitors interested in more than a quick strike. “People used to go to the mall for a leisurely experience,” Crowell says. “Now, they’re more focused. They research what they want to get online and then come.”
As a result, PREIT decided to offer something more experiential. By drawing people in with themed venues, the mall can better capitalize on shopping and dining options. That’s what started to happen a couple of years ago, when Plymouth Meeting’s personality began to change. The transformation commenced in 2010, when Whole Foods moved in, but it isn’t part of the mall proper.
The indoor portion of the property has been undergoing a dramatic change over the past year-plus. It’s seen some departures—like Macy’s—as well as some additions—most notably the 33,000-square-foot LEGOLAND Discovery Center. That attraction opened in the spring, signaling the beginning of the entertainment-destination concept for the property.
Since there are only nine LEGOLANDs in the country, this was a big get. The center boasts a theater, workshops, party rooms, activity areas and, of course, a store. Crowell says people drive from as far as two hours away to experience the attraction, and then stick around for more. They dine—perhaps at Dave & Buster’s—shop, and maybe stay for a movie and drinks. Unlike before, actually buying stuff is almost an ancillary pursuit. “The social experience is a huge part of the draw,” Crowell says. “Shopping is part of the appeal, but it’s not the whole thing.”
In May, PREIT reported that 5 Wits would be joining LEGOLAND on the attraction portion of the PMM ledger. An 11,000-square-foot facility conceived by an MIT graduate who once worked for Disney, 5 Wits is a higher-tech version of the “escape room” concept. Patrons can choose from a variety of adventures and work with others in a team to tackle the challenges. A decade ago, that idea would’ve been out of place in a mall, where a ball pit was considered an experience and people came to shop, not test their problem-solving skills.
A term like “activations” was once alien to the retail setting. Crowell uses it to describe the lures that bring people to malls. But some of the old axioms do apply. Even though the mall is no longer the shopping destination it once was, get people there, and they still have a propensity to expand their focus beyond a particular item. And no matter how exciting the new paradigm may be, with kids’ wonderlands and fun nights out for the grown-ups, the object of the game remains to boost the bottom line. “A lot of people are researching their purchases in advance, but the benefit of the brick-and-mortar model is that, once they’re there, people still tend to browse and buy more,” says Crowell.
As the Plymouth Meeting Mall continues to add attractions and merchants in a quest to become a more modern property, there’s one thing it isn’t changing: its indoor characteristic. Unlike other “town square” models, PMM remains primarily contiguous, with no open spaces or green components like the Promenade at Granite Run will have. PREIT is even working on connecting Whole Foods to the rest of the complex to keep visitors under one roof. Part of the reason is geography—the mall is confined by a rectangle of roads and doesn’t have room to open itself up without sacrificing retail or parking area. But it’s also interested in maintaining a personality that blends a variety of options into one relatively easily navigable space.
“It’s a very unique property,” Crowell says. “We’re not trying to go head-to-head with King of Prussia or anyone else. We have a great location, and we’re looking to make it a destination—or an adventure, if you will.”
Throughout the area, it’s easy to find evidence of the unending sprawl that characterizes the suburbs. Developments are being crammed into every bit of space in the hopes of selling another four—or 40 or 400— houses. The growing population will continue to choke the region’s already overcrowded roads and expand the footprint farther west.
Exton Square Mall.
Nowhere is that more evident than Exton, where hundreds of housing and apartment units are under construction in an attempt to meet the demand. Once the newbies arrive, they’ll need somewhere to spend their money—and that’s a big reason for the Exton Square Mall’s ongoing face-lift. “We’re rethinking the traditional mall model,” Crowell says.
Like its Plymouth Meeting cousin, the Exton property is being transformed into a destination, though the process is still in its infancy. The Whole Foods in Plymouth Meeting has been open for years, while its counterpart in Exton won’t be available to shoppers until sometime in 2018. Although PREIT has completed the outside of the property and permits have been issued for interior work, none of it has begun, leaving some residents wondering whether the project will ever gain altitude. Crowell rightly assigns responsibility for the store’s completion with Whole Foods, which was recently acquired by Amazon for $3.7 billion. But she is quick to say that the market will eventually be connected to the rest of the property.
Slow though it may be, progress is being made. Earlier this year, the amusement center Round 1 opened at the old JCPenney location, offering food and drinks, arcade games, karaoke, pool and bowling. It also continued the move away from large-box retailers to a more fun-and-games style.
Crowell believes a key to Exton’s success will be in the health-and-wellness arena, whether it’s from the sale of products and spa treatments or the creation of exercise spaces. She also considers Exton to be “underserved” by restaurants, so PREIT is encouraging growth in that area. As with other malls, the goal is to eliminate the seek-and-find characteristic of shoppers’ visits, in favor of an experiential approach. Someone might not necessarily go from Whole Foods to Round 1, but they may hit the nearby CycleBar and sign up for a future class.
“We’re optimistic,” Crowell says. “We’ve tried to be in front of this trend for a while, recognizing that going to a mall has to be much different than it was. If you spend the day at the mall, it’s a different model and a great destination.”
Tom Comitta likes to say that, if you visited the Granite Run Mall as few as six years ago in the middle of the afternoon, you would’ve seen a mob of Penncrest students hanging out after school, spending a few dollars at Auntie Anne’s or browsing smaller apparel shops. Twenty years ago, the corridors would’ve been lined with senior citizens trudging through their cardio workouts.
Those audiences will still be welcome at the Promenade, but they’ll be joined by residents of the two apartment complexes at either corner of the property, plus some of the visitors to the 7,000-square-foot Children’s Hospital of Philadelphia facility on the northeast side. Those looking to keep the muscles and joints moving will be strolling the paths, and diners could well be enjoying a meal at an outside table rather than crowding into a food court.
The new layout will break apart the old-style indoor model, in hopes of creating a community built around shopping and various attractions. It’s the new way—and when it comes to retail these days, it may be the only way. “The Promenade at Granite Run will evoke a sense of pedestrian circulation. That’s one hallmark of what we’re trying to accomplish,” Comitta says. “It’ll be mainly an outdoor shopping experience.”
And a look at the future.