tenants Archives - Product Management Confabulation

Strip malls have come and gone, but could they be coming back?
Image Credit: Caribb

Once upon a time, being a product manager for a strip mall was a pretty good job. Your mall was a mecca for the local population and so it was easy to attract customers and all your product development definition said that you had to do was make sure that each of your stores was leased out. However, times have changed. As more and more people start to do their shopping from home, the need to go out to the mall has gone away. Strip malls have fallen on hard times. However, some may be starting to make a comeback. How can strip mall product managers breathe new life into their products?

The Problem With Strip Malls

In all honesty, a lot of people have given up on strip malls. Once upon a time you could find them everywhere and people flocked to them; however, that is no longer the case. Many stock-market investors have soured on the mall experience. However, some are still flocking to a more mundane type of retail: strip centers and grocery-store-anchored shopping centers. These centers, which predate the American mall, offer routine necessities such as groceries for dinner, a gym workout or a visit to the dentist, in contrast to special purchases typically made at indoor malls, like a toy or a new dress. In the past, being a strip mall product manager would have looked pretty good on anyone’s product manager resume.

Mall owners hope to entice customers to spend an hour or more browsing the property, strip-center product managers say they simply want to offer stores and services that bring back local shoppers more than once a week. Product managers want their stores in the line of sight when people are dropping the kids off, or going to the gym. Strip centers have a number of advantages over other retail. Online purchases of groceries have become popular in only a limited number of cities, making the centers more internet-resistant and potentially more resilient during a recession.

The centers are generally smaller than malls are and, depending on their location, could appeal to a wider selection of store owners who are looking for tighter spaces and more visibility on major roads. A good example of what a strip mall can become can be found at a strip mall called the Coral Creek Shops. This strip mall has a Publix grocery store, Bank of America branch, a UPS store and restaurants. Around 119,000 people live within a 3-mile radius of its stores. Even retailers with big e-commerce operations are often eager to have a presence in such locations, as well as in enclosed, busy malls, because online deliveries are becoming more costly due to the high percentage of returns and greater demand for speedy deliveries.

A New Life For An Old Mall

Both Walmart and Target have rolled out curbside pickup. Other retailers have been busy ramping up their buy-online, pickup in-store capabilities. When people think about how people buy things these days, the initial gut reaction is that it’s all going online. However, but sometimes, it’s cheaper to use the store as a distribution channel. Not all the centers are immune to factors pressuring the retail landscape. Average asking rents in the open-air shopping centers and strip centers in 77 metro areas in the U.S. rose 1.2% in last year, down from 1.6% and 2.0% recorded in previous years, respectively.

The vacancy rate at open-air shopping centers and strip centers reached 10.2%, up from 10.1% and generally in line with levels recorded in previous years. The vacancy rate in enclosed malls reached 9.7% last year, the highest level in 20 years. If vacancies continue to rise, they should not do so at a rapid rate. The reason for this is because consumers are spending more on fitness, entertainment and eating out.

What All Of This Means For You

Product managers who are responsible for strip malls have a real challenge on their hands. The world in which they live is undergoing some significant changes and the result of these changes is that more and more of their customers are shopping from home. This can mean that there are fewer customers who will be visiting their malls to make purchases. If this happens, then they’ll lose the stores that lease space from them and very quickly things could go bad for them. What do these product managers have to do to their product manager job description in order to save their malls?

It turns out that the future may not as grim as it may appear for strip malls. Strip mall product managers have realized that there are still products and services that their customers will need. These can be as mundane as buying pet food or going to the dentist. If their strip malls can offer services like this, then they can still attract the customers that they need. Unlike mall product managers, strip mall product managers don’t have to get their customers to spend an hour at their site. Instead, all they have to do is get them to visit more often even if it is for a short period of time. Strip malls are smaller than malls but generally offer better locations to store owners. Strip mall stores can be used as a distribution channel for a store. They can also be used to lower the costs of processing returns. Strip mall vacancies have remained constant over the past few years.

It’s never easy when the world in which your product exists changes dramatically. Strip mall product managers have had to readjust to a new world. However, the good news is that their product’s location makes it accessible to their customers. If they are able to carefully pick the right tenants, then they can attract customers and make their product successful. Nothing is ever easy, but it looks like strip mall product managers can breathe new life into their product.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World Product Management Skills

Question For You: Do you think product managers should lower their rental prices to attract more customers?

Click here to get automatic updates when The Accidental Product Manager Blog is updated.
P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

I’d be willing to bet that most of us really don’t spend that much time thinking about elevators. I mean, we walk into a building thinking about where we want to go, we press a button, an elevator door opens, we step in and ride to our destination. Done. However, it turns out that there is a lot more going on behind the scenes than we may realize. In fact, how an elevator behaves may impact how long we wait and how long it takes to get to where we are going. These are things that we really do care about. What can elevator product managers do to make our elevator experience better?

The post Strip Mall Product Managers Look For A Second Chance At Success appeared first on The Accidental Product Manager.

Gyms can make malls a go-to destination
Image Credit: Chun Kit To

If you’d like to sign up for a challenging product manager job, then perhaps you’d like to look into what it would take to become the product manager for a mall. Back in the day, malls where where everyone in town would go to do their shopping. They had movie theaters, food courts, and, of course, plenty of parking. However, times have changed. Now people do more shopping online and we don’t seem to be heading out to the mall nearly as often as we used to. Clearly it is time for mall product managers to update their product development definition. What’s a mall product manager to do in order to keep their product alive?

Malls Say Hello To The Gym

In the beginning, whenever that was, malls didn’t much like gyms. Malls viewed gyms as attracting low-rent people who were very unlikely to go shopping after they got done working out. However, with the loss of their anchor customers and a generally pulling back by many of the other firms that are traditional mall residents, mall product managers are starting to have to get creative in how they fill their mall spaces. Mall product managers are now willing to give gyms some of their most valuable real estate.

The reason for the mall product manager’s change of heart comes from two different sources. The first is that many of them are dealing with a large number of empty stores as the retailers who traditionally occupied the malls have closed hundreds of their store locations across the country. The reason for these closures are many, but the growth in online shopping has certainly played a role. The result of this is that fewer people have been going to the malls and mall product owners now have more vacancies on their hands. While all of this has been going on, fitness centers have been changing. They have grown in number and they have started to diversity. A new type of gym has also shown up. These are smaller boutique gyms that tend to draw higher end customers. These types of gyms are more attractive customers for mall product managers and they are also easier to accommodate.

The result of all of this is that more and more health clubs are moving into malls. When this happens, the gyms transform the mall into a local hub of working, living, and playing. In the past, when mall product managers offered their best locations to retail stores, those same retails stores prevented mall product managers from having anything but retail shopping in the mall. However, as the major retail stores start to take a step backwards, a new opportunity to reinvent what a mall is has arrived. For mall product managers who handle this correctly, they will have something to add to their product manager resume.

What’s Next For Gyms In Malls

Product managers are aware of this new movement. One of the largest owners of malls has announced plans to incorporate gyms into half of its 115 malls over the next decade. Another mall owner currently has gyms in 44% of its grocery store anchored malls. Originally, other retail stores in the mall viewed people who went to the gym as being teenager weightlifters who would be more likely to hang out at the curb than shop in the stores in the mall. The makeup of a mall is starting to change. Many of the new stores at a mall are gyms and specialty fitness stores. Where things get interesting is when you take a look at the size of these stores – most of them are no larger than your typical Starbucks coffee shop. Some malls are replacing their anchor tenets with large scale gyms that can measure up to 180,000 square feet.

Mall product manager need to realize that running a gym comes with its own set of risks. The arrival of streaming fitness services that customers can use remotely are on the rise – these mean that customers no longer have to come to the gym. Studies have shown that the growth of gyms is outpacing their growth in membership. Midprice gyms are starting to find that they are struggling to compete with the boutique gyms and bargain gyms. However, at the same time the fitness sector is booming. Currently, over 57M people belong to some sort of gym. This works out to be roughly 19.3% of the U.S. population. Memberships in gyms have gone up by 26% since 2009.

Mall product managers know that they need to make changes in order to boost foot traffic in their malls. Mall product managers are trying to reinvent their malls as centers of entertainment for the local community. This has been a challenge as more and more apparel sales have been moving online. In order to change things up, product managers are in the process of adding attractions to their malls such as ice skating rinks, restaurants, pools, and other things in order to get more people to come out and visit the mall more often. Additionally, it is starting to look like the people who go to gyms are the people that mall product managers want to visit their malls. More than 40% of gym members reported an annual income in excess of US$100,000. This is better than the 26% of the general population who can claim the same thing. Customers buy things at gyms. Customer spending at the gym climbed by 3.7% last year while spending on apparel only climbed by 0.5%. Clearly the time has come for gyms to be added to malls in order to boost both traffic and sales.

What All Of This Means For You

Product managers who are responsible for malls have a real challenge on their hands. Malls used to serve a center point for towns where everyone would go to do their shopping. With the arrival of online shopping, the number of people going to malls has significantly decreased. Mall product managers have a responsibility to look at their product manager job description and get creative to find new ways to get people to once again come out to the mall.

Not all that long ago, malls were places where you could find retail stores and that was it. As economic times have changed and retail stores have started to close stores, malls are now starting to think about inviting gyms to move into the mall. Mall product managers are more willing to allow gyms to come to the mall because they now have a great deal of open space. Additionally, a new type of specialty gym has arrived that takes up less space. As gyms move into malls, they are reinventing what a mall is and starting to attract more people to the mall. More and more malls are starting to include gyms. The smaller footprint of the specialty gyms allows them to fit into a space roughly the size of a Starbucks. Although gyms may make a great addition to a mall, mall product managers need to realize that running a successful gym can be a challenge. There may be too many gyms or not enough people may sign up to keep one in business. Mall product managers realize that they have to make changes to their malls to once again make them places that people want to go to. Gyms have the ability to attract the kinds of customers that mall product managers want to fill their malls with.

With the economic downturn and the arrival of online shopping, things were looking rather bad for mall product managers. They had too many empty stores and not enough tenets to fill them with. However, it is starting to look like adding a gym to a mall may be what it takes to get people to start to once again come back out to the mall. Once they are there, they will visit the mall’s stores and start to shop. Mall product managers may have finally found the way to get a workout for their product that will pay off in the end.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills

Question For You: Do you think that a single mall could handle having more than one gym located in it?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

I’d like to tell you that the calling to become a product manager is only received by those of us with the highest morals. However, I really can’t say that. What this means is that in the world of product managers, there are the good ones and the not so good ones. I like to spend my time talking about what the goods ones are able to accomplish. However, every so often the bad ones do something that is so clearly bad that I feel compelled to talk about it. It turns out that some of the bad ones work for Greenway Health and they have done some bad things.

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