Shopping center owners look to foster loyalty, engagement and interest by utilizing local connections to the community
Everyone likes a hometown hero. It’s a reason schools tout their notable alumni, the home team will always have the larger cheering section and political candidates will almost certainly perform the best in their home state.
There’s something about a player being “one of us” that makes people like them more. It’s an unspoken bond that exists even if the only connection between an entity and a fan is the city where they both reside. This bond creates a sense of unity, familiarity and pride. And it’s a bond shopping center owners are trying to tap into as they stave off e-commerce and hope to welcome hordes of shoppers this holiday season. Many are doing this by creating, promoting and supporting a connection between consumers and their community.
They’re bringing in local retailers, erecting spaces that foster community interaction, and utilizing local services and employees to ensure a neighborhood-centric feel. This approach also ensures the center offers something consumers can’t find online.
“Being cheaper or more convenient isn’t enough as that is something that is easily competed with both online and by other competitors,” says Sandy Sigal, president and CEO of NewMark Merrill in Calabasas. “Being a place that people want to be, where customer service means knowing your name, your passions, and experiences that your family enjoys wins market share and long-term growth.”
Buying local can also offer a warm and fuzzy feeling consumers can’t get from the click of a keyboard or tap of a phone screen.
“A lot of people recognize we are living in an age of globalization and mass production, so the counter-balance to that in terms of retail is community-driven retail,” says Terrison Quinn, managing principal at SRS Real Estate Partners in Newport Beach. “Many shoppers, despite recognizing the value of national chain retail, like the concept of supporting local businesses.”
So today, centers are looking to offer an experience. A feeling. A sense of belonging and a reason to leave the house.
“In a post-pandemic world, we have learned that people are increasingly drawn to environments that reflect their communities in an authentic way, layering culture, history and activities for a better experience,” explains Mitra Esfandiari, partner at RDC architects in LongBeach.
J. Wickham Zimmerman, CEOof Anaheim-based design and themed construction company OTL, believes the pandemic helped push the need for connection and a sense of place into overdrive for many.
“One of the most powerful factors influencing consumers’ behavior since the pandemic has been the desire to rediscover their communities,” he says. “What people can’t get from online shopping is a sense of connection with others, and they’re hungry to have that experience again.”
BUYING LOCAL
Creating a sense of place starts with determining what that community’s identity is, then reinforcing its collective morals, hobbies and passions.
“Community-driven retail has be come indispensable in today’s market because it fosters a deep sense of belonging and connection,” says Ryan Lefton, COO of Agora Realty and Management in Los Angeles. “Local retailers better reflect the character and needs of the community, ensuring that shopping centers are not just commercial destinations, but places that resonate with the local community’s culture, values and aspirations. This creates loyalty, ensures longer footfall and contributes to a more sustainable business model in a world where online shopping is on the rise.”
Agora’s Plaza Del Valle in Panorama, for example, features Camacho’s Leather, which is helmed by a local leather worker who crafts custom-made hats and shoes.
“This artisan not only attracts customers looking for unique, high-quality products but also transforms shopping into an experience,” Lefton continues. “Visitors can witness the craftsmanship up close, understand the process and get a product tailored just for them. Such businesses don’t just generate sales; they craft memories and stories, making the shopping center a genuine landmark in the community.”
Christine Deschaine, Senior Vice President of Kennedy Wilson Property Services in Beverly Hills, has also seen what the local players can do for a center, its consumers and even neighboring tenants. Deschaine notes that a former 24Hour Fitness in Santa Monica was divided and re-leased to three tenants, including Tia: Women’s Health Clinic and two community serving tenants: Malibu-based AJA Winery and BodyRok Pilates, which has an avid following
“Locally owned businesses often serve as anchors of community identity, generating not only foot traffic but also a sense of belonging and loyalty among local residents,” Deschaine adds. “Having a successful one in your shopping center or on the block can drive demand in the area and, in turn, drive rental rates with the appeal of strong co-tenancy. The synergy between the three uses in our client’s building is further complemented by the surrounding area tenancy.”
This same sort of synergy occurred in Brentwood when Elaine Kim Studio opened at San Vicente Place in 2022. Being that her first boutique had premiered on West Third Street in Los Angeles, Kim was already well known and loved in the area.
“With a loyal following, her brand was a great addition to our client’s shopping center across from Brentwood Country Mart because her target customer was right across the street,” Deschaine says.
Of course, finding local artisans who give back to the community where they operate doesn’t hurt, either. Though her store focuses on women’s clothing, Deschaine notes that Kim often uses her platform to discuss ecological restoration.
“Elaine is a generous community supporter,” she says. “She is passionate about re-wilding and native plants and hosts monthly native gardening meetings at her home in Los Angeles. You’ll often find Elaine at her Brentwood store helping customers and discussing sustainable gardening practices.”
Finding local retailers who appreciate the community is great, but Sigal believes shopping center owners need to embrace that mantra as well. After all, it is their destinations that are supposed to serve as community hubs to begin with. Sigal says owners can go a step further by integrating the local approach into their events, resources and staff.
“We support the local schools and ensure that we employ those from the community,” he notes. “We use local bands for our summer concert series, local artists for our mural installations, local resources for our kids’ club events. These provide an immediate connection to our communities – and they know we are part of the fabric – not trying to be the outsider coming to town.”
Newmark Merrill also highlights its local retailers through the Fostering The American Dream series. This video series showcases merchants as they discuss why they opened their business or moved to the community, as well as why they love interacting with their customers.
CHOOSING LOCAL
Thanks to social media and the internet, it seems everyone has a business nowadays. This can make choosing the right local tenant a challenge for landlords. It doesn’t have to be, Lefton as serts, if you let the community you’re trying to cater to lead in that selection.
“We prioritize businesses that reflect the essence and needs of the com munity,” he says. “When selecting tenants, we look for a strong local connection, be it in the form of products, services or the tenants’ background. It’s essential for us that the businesses align with our vision of promoting local talent while also bringing something unique, exciting and new to the center experience, especially when it is some thing that cannot be replicated online.”
Lefton is also a big believer in pilot programs and smaller spaces, both of which can ease a new tenant into a center. That’s why Plaza del Valle offers micro-food stalls, small to mid sized retail shops, and indoor and outdoor event space.
“A majority of the close to 100 tenants are first-time restaurant and shop owners thanks to Agora’s micro-site program that’s integrated into the heart of the center,” he adds.
Once the tenants are in, Lefton notes that their performance assessment is part science, part art.
“Foot traffic, sales figures and tenant retention rates give us an immediate sense of business success,” he continues. “However, we equally value feedback from the community, the frequency and success of community events, and the story that evolves around our space in local media and stories. It’s a blend of hard metrics and the intangible yet palpable sense of connection and pride the community feels toward the center.”
Sigal agrees with these performance indicators, noting there isn’t one tell-all metric that can point to a community retailer’s failure or success.
“Our KPls [key performance indicators) include things like what is the sentiment of the customer, gleaned through social media, Yelp ratings and a lot more data points, how does our traffic grow and where does it come from?” he says. “How long do our customers stay and do they cross shop and are those trends growing? What percentage of our customers are loyal – visiting more than once or twice per month. And, of course, sales growth. Finally, the most important, how many customers are smiling and having a great time when they visit?”
Deschaine notes that landlords can – and do – play a huge role in a local tenant’s success. She believes owners would do well to acknowledge the limitations some smaller or newer retailers may have, and how landlords can leverage their knowledge, resources and support to help them overcome these challenges.
“One of the largest obstacles an owner may face in pursuing community-driven retail is working with less experienced operators,” Deschaine says. “Taking a helpful, hands-on approach can help tenants get open faster, which, in turn, is a benefit to the property and landlord.”
A city’s permitting process, for example, can be a tough thing to navigate, particularly in California. However, landlords that maintain proactive relationships with their local economic development departments can often help new tenants avoid delays involved with bureaucratic red tape and regulatory complexities. Providing a warm, turnkey, vanilla shell space can also help tenants reduce their initial setup costs and open quickly, Deschaine adds.
BUILDING LOCAL
A community-centric mentality extends beyond the retailers and employees. It encompasses every part of a center, including its design, common areas and events. As with retailers, Esfandiari believes the community should lead the conversation.
“RDC’s general approach to conducting the design process for a space is not to jump on the drawing boards right away,” she says. “We start by conducting research into a center’s demographics, the needs of the community, users’ profiles, the site context and the cultural heritage of the area to create a vison for crafting an authentic storytelling component as the basis of our design and as a roadmap for the leasing team.”
This approach was recently executed at Sky Deck, a food hall at Del Mar Highlands in San Diego. Esfandiari notes the research led RDC to create a “maritime/industrial” roadmap that was inspired by the site’s proximity to the port of San Diego.
“We wanted to create a sense of community on-site by having visitors connect to the story of the place and immerse themselves in multi-sensory experiences through architecture, interior design, curated art, lighting de sign and environmental graphics,” she says. “Visitors can then share these memorable experiences with others in-person or through social media.”
RDC also worked with local artists on ROGarchitects Sky Deck, including Celeste Byers, who created a 100-foot long, hand-painted mural as a backdrop for a series of large found objects, such as boats, buoys, ropes, bottles, etc., that were hand sourced from a local surplus collector. These items were then curated in collaboration with local fabricator Tecture Inc. to achieve the maritime/industrial design concept.
“Our goal was to engage local businesses and artists in this creative process to foster a sense of community and belonging,” Esfandiari adds. “We believed this would give residents a reason to engage with their neighborhood and take pride in supporting local businesses, which will lead to a stronger community bond and a more vibrant place.”
Agora has carried out a similar strategy, prioritizing spaces throughout its centers for local artists to showcase their talents.
“This can be in the form of large and small scale murals,” Lefton explains. “Agora Realty has also partnered with schools and local organizations for on-site events, which can include everything from performances to health fairs, ensuring the community feels invested in the space.”
Sigal adds that a sense of community can be cemented with in a center when that destination becomes the go-to place for many of life’s milestones.
“We celebrate the Fourth of July, Easter and other holidays,” he says. “Our goal is that the community instinctively thinks of our locations as the place they celebrate weddings, anniversaries and other life highlights. If the customer knows our place is a celebration of their life experiences, then we have made a difference, and our merchants have a role in providing meaningful engagement.”
Restaurants that foster celebration or retailers that offer unique gifts can help position a center as a notable hub, but Zimmerman adds that the architecture can play a role as well. A beautiful mural, fountain, sculpture or other lnstagram-worthy backdrop never hurts when one is celebrating a big event.
“Inclusive, free entertainment features like state-of-the-art show fountains provide staying power for customers, tenants and shop owners – and allow patrons to not only support local businesses, but spend quality time connecting with people in the community while they do so,” he says. “This kind of shared experience with other people in the community encourages people to stay and visit many of the locally owned restaurants and retail stores, creating a virtuous cycle of consumer engagement.”
Zimmerman notes that, soon enough, these features can draw proposals, engagement photos and baby reveal parties as customers journey through life.
“These public, open retail spaces invite everyone in the community to be a part of important foundational memories,” he adds.
Supplementing with community spaces and events can be the final piece to creating a community-worthy retail destination, according to Greg Lyon, chairman and principal at Nadel Architecture and Planning in Los Angeles.
“We design retail centers specifically to enhance the overall community experience,” he says. “This includes children’s play areas, comfortable shaded lounges, and space for community events like farmers’ markets, cultural celebrations and concerts.”
Lyon adds that tenants love these features because they benefit from the increased pool of potential customers who might be there for another reason, while landlords love them because they create an exciting destination that reduces turnover and yields higher rents.
“People don’t go to farmers’ markets because it’s the only way to buy an avocado,” he continues. “They go because they like the experience. They like participating in the community, and they want to see what else is going on while they’re there. Essentially, it’s just a matter of giving people what they want.”
And isn’t that the point of shopping centers to begin with?
Article by Nellie Day for California Centers Magazine | October/November 2023 Edition
Click to read the original article here.