The anatomy of a shopping mall

Retailers hone strategies for prime locations to target shoppers

Thursday, Dec. 21, 2006

Click here to enlarge this photo Raphael Talisman⁄The Gazette Shoe stores, such as the Finish Line in the Centre of Forestville, often want to be located near other shoe stores in malls, says Larry Lund, principal of Real Estate Planning Group in Chicago. “The worst spots are near the anchors.“

As Maryland’s shoppers trek through their favorite malls to buy holiday gifts, they may be unaware that the mall developer has already mapped their shopping strategy.

Some stores are dispersed throughout the mall to increase foot traffic and encourage impulse purchases, while other developers like to group similar stores to make shopping easier for the time-strapped consumer.

It’s all a matter of preference, developers say.

Clustered vs. dispersed

Some national tenants use store location as a shrewd business tactic during leasing negotiations, said Thomas Maskey, senior VP of retail development for the Peterson Cos. in Fairfax, Va.

The company, which specializes in office, retail and residential development in Virginia and suburban Maryland, is building National Harbor, a $2 billion, 350-acre development in Oxon Hill, and was a big player in the redevelopment of downtown Silver Spring.

‘‘There’s not much science,” Maskey said of mall-planning strategies. ‘‘[Retailers] all have their quirks. We try to create spaces, and while we have some control, the retailers have tremendous control because they sign the lease.”

While there are no specific guidelines, shoe stores are normally clustered together and jewelry stores sit closer to the mall’s exit, Maskey said.

More and more shopping malls are taking the cluster approach, he said.

‘‘I don’t know if that idea is going to catch on, because it tends to make the shopping experience more focused, but I can see a pattern forming,” Maskey said.

Walter H. Petrie, chairman of Petrie Ross Ventures in Annapolis, says otherwise.

‘‘It’s a philosophical difference of opinion,” said Petrie, a 40-year retail veteran who has been involved in developing Silver Spring’s City Place and Annapolis Mall in Maryland, and the massive Great Mall of the Bay Area in California.

‘‘It’s more convenient, but I personally think they’re missing out on the impulse purchase,” Petrie said of the cluster strategy. ‘‘Some developers like to put similar stores in the same place, but I like to spread them out.”

Nearly 65 percent of mall purchases are impulse buys, Petrie said, and an age-old strategy is to develop anchor stores — which typically generate lots of foot traffic — at opposite ends of the mall to encourage such purchases.

‘‘Our job is to get the customer to walk,” Petrie said. ‘‘Malls are like department stores. All we’re really doing is placing retailers in a certain location to give customers a wider selection, but the whole idea is to get as many customers as possible to walk the full length of the mall.”

Department stores use some of the same strategies, he said. Typically, cosmetics are placed in the front to draw in the female customers, but men’s products are put in the back to encourage them to shop.

When Petrie’s company bought the 463,461-square-foot Forest Village Park Mall in Prince George’s more than three years ago, an old Kmart and J.C. Penney anchored it. But after years of declining sales, the company renamed the mall the Centre at Forestville and replaced the older Kmart with a more popular Target store, which opened last year to much fanfare.

The strategy is different for other types of malls, Petrie said. Lifestyle centers — such as his Woodmore Towne Centre in Landover, with the upscale Wegmans grocery chain to be its anchor — are mixed-use for customers to live, work and shop. Power centers comprise big-box retailers, while neighborhood centers, with small specialty shops, are designed for convenience.

Demographics a factor

Demographics, including the area’s income level, is a crucial criterion in developing a mall, Petrie said.

‘‘Draw a 7-mile ring around Forestville. Now draw that same ring around Tysons Corner [Va.],” he said, constrasting the respective income levels.

Years ago, developers anchored their malls with the more traditional Hecht’s and Sears stores. Not anymore, says Jie Zhang, an assistant marketing professor at the University of Maryland, College Park. For the past decade, Zhang said, developers have opted for retailers such as Best Buy and Target, a bigger draw for shoppers.

‘‘Their drawing power is much greater at malls,” Zhang said. ‘‘And shopping malls certainly are destinations.”

A mall that’s had a major makeover is in Hyattsville, where Pennsylvania Real Estate Investment Trust spent $6 million to renovate the rundown Prince George’s Plaza. Now called the Mall at Prince George’s, anchored by Target, county officials have touted the development as a major part of the area’s retail renaissance.

Keep them in the mall

During negotiations, national retailers will negotiate for space closer to anchor stores to benefit from the foot traffic and sales they generate, Kavanagh said.

Not a smart strategy, said Larry Lund, principal of Real Estate Planning Group in Chicago.

‘‘The worst spots are near the anchors,” Lund said. ‘‘When you walk out of an anchor, you don’t look to the right or left. It has to do with the way humans perceive space. When you’re done shopping, your focus tends to be straight ahead, and not on the periphery.”

Developers focus on the mall’s center court because of the excessive foot traffic. And despite competition, clothing stores and shoe stores actually tend to like being near the same kind of store, Lund said.

‘‘That’s the whole point of being there,” Lund said. ‘‘What you hope is that they don’t get what they want at another store, and then leave the mall. If you’re smart, that’s where you’ll locate.”

This report originally appeared in The Business Gazette.