Opportunities for Franchisors as Malls Evolve
Malls are changing in reaction to a radically different landscape—socially, economically and one that has many legacy retailers closing locations. To meet this new challenge, progressive mall operators are thinking of their facilities as mixed-use destinations that cover a lot more ground beyond just clothing stores and restaurants. As this evolution gains steam, I see major opportunities for franchisors of all stripes.
As I type this blog five minutes down the road from Rosedale Mall, a major regional center in the state that invented the indoor mall, I consider the reasons that bring me to the mall these days: grabbing dinner at Big Bowl (one of my favorite restaurants), catching a movie at the 14-screen AMC theater or running to Macy’s for something I can’t wait to have shipped—like new dress shoes right before a work function, a new tie for an upcoming wedding, etc. My last visit was hitting up a few ring stores to get sized for an engagement ring.
While I know I’m different than some shoppers, none of those reasons I listed beyond Macy’s involve heading to the mall for hours of strolling and shopping aimlessly without a plan. If I’m heading to a mall, I have a schedule and an intentionally limited timeframe—all business. But malls are changing, and so to will my reasons and motivations for visiting my local mall.
In terms of clothing retailers, if I don’t need it today I’m probably heading online. The exception is major purchases, like a suit. Hip clothier Bonobos opened a flagship location in downtown Minneapolis, and I’m planning to head there to check out a few suit options, rather than blindly pulling the trigger on something I hope will fit off another store’s website.
As franchising diversifies and malls transition toward wider, more mixed uses, they are looking to attract traffic-generating uses such as walk-in clinics and urgent care centers, medical maintenance businesses such as The Joint, childcare centers such as Primrose, fitness centers such as Anytime and Life Time, and newer specialty retail centers (exempt from the Amazon effect) like electronic repair shops.
We here at Franchise Times expect these new-wave medical, senior care and home service franchises to become a much bigger piece of the franchising industry in the coming years. Demographics support these categories, commercial landlords want their regular traffic draws and they are inherently immune to the impacts of online shopping.
Envisioning a mixed-use mall of the future boosted by franchised retail isn’t a difficult enterprise. Add some of the aforementioned daily-need franchises like The Joint, include childcare and senior services, something like American Family Care for the sick kiddos and maybe even a grocery store if traffic flow and parking allows. Throw in a food hall with more interesting choices than your run-of-the-mill food court and the job is largely done—I’m in.
There’s a lot of hand-wringing about what can get millennials off the couch (or their phones) and into stores. As many legacy retailers close locations by the dozen or hundreds, let’s concede that most retail is in for a bumpy ride. That doesn’t guarantee the end of malls. Focus on what people actually need in a given week and move forward. Franchising can be a big part of this next phase of indoor shopping centers.