For Retailers, Safely Reopening Is One Thing, Keeping Shoppers Is Another

To keep shoppers coming in during the coronavirus pandemic, retailers are getting creative. 

Art walks in malls, drive-in movies in vacant parking lots and even hosting early morning yoga sessions, in which each participant takes up a parking slot as a way to follow social distancing protocols, are some of the events retailers have planned to attract customers to their properties in the midst of the coronavirus crisis.

“We are programming our properties with safe distancing type of events,” Vestar Vice President of Marketing Rachel Forman said. Vestar owns and manages 30M SF of retail space in California, Arizona, Nevada, Washington, Utah, Texas and Colorado.

“These are transitionary events,” Forman said. “Hopefully, in the coming months we’ll be able to invite groups back to the property.”

As states begin to reopen businesses, retail property owners and managers are coming up with inventive ways to bring customers back to the malls. They said they want to help their tenants generate business and remain community gathering places, even with new health restrictions and social distancing guidelines.

As of Wednesday, the U.S. had more than 2.65 million recorded cases of the coronavirus and 127,681 deaths, according to Johns Hopkins.  

It is no secret brick-and-mortar retail has been undergoing tremendous fundamental change. With the rise of Amazon and e-commerce and the ease of shopping online, many consumers are preferring to shop at home. Now, many are forced to stay at home and the trend of shopping more online could remain when the pandemic ends.

According to S&P Global Market Intelligence, e-commerce sales are estimated to reach $709B this year, up 15% from the previous year.

E-commerce will make up 14.5% of all retail sales this year, remain steady in 2021 before jumping to 15.5% in 2022. Citing market research company eMarketer, spending at brick-and-mortar is expected to drop 14.4% year-over-year, according to S&P Global Market Intelligence.

To offset the rise of e-commerce, malls and many shopping centers have had to reposition and become more than a place to shop, Progressive Real Estate Partners Vice President, Investment Sales Mike Lin said. Lin specializes in retail sales.

“Before COVID, what’s the one word every retail expert said [about malls and retail shopping centers]? Experiential,” Lin said. “It’s about getting people out there to experience and socialize with others.”

Before the coronavirus, on any given weekend and some weekdays, live community events, performances and various workshops were ubiquitous ways for retail property managers to bring crowds to their malls and shopping centers.

The purpose of events is to try to help a shopping center's tenants to get some foot traffic, Lin said. In turn, they can continue to pay rent to the property owner. 

But with concerns about catching the coronavirus, retailers have to come up with ways to host events in a safe manner to draw in business.

"We want these businesses to survive in this time when revenues are down," Lin said. "It’s also important to get people out of their homes because people are going stir-crazy."

There is pent-up demand to go out and do something.

In June, about 180 people came out to The District at Tustin Legacy retail shopping center in Orange County to watch Night at the Museum on a 20-foot inflatable outdoor screen, according to the Orange County Register.

The District spokeswoman Shannon Campbell said visitors had to reserve a spot, sit at tables that were apart and wear face masks, except when eating.

Rather than visitors bringing their own food from home, Campbell encouraged them to order takeout from the center's restaurants.

“We’re a retail center, and the point is to help our businesses,” Campbell told the Register.

The District, she said, also has plans to host other events such as concerts while taking social distancing precautions.

This month, in Texas, Kilburn Live, an experiential entertainment company, will begin to host drive-in movie nights at The Star in Frisco, which is the home of the Dallas Cowboys and a mixed-use development that includes restaurants and hotels. 

The company is encouraging visitors to arrive early and dine in restaurants at The Star before enjoying the movie.

“This is clearly a trying time for both our industry and our country, but we are thoroughly convinced people want to head back out and start reestablishing some return to normalcy while still adhering to safety protocols,” Kilburn CEO Mark Manuel said in a statement.

“The idea behind ‘Cinema Pop-ups’ is to provide people with an innovative out of home entertainment solution that offers our customers some peace of mind while the world adjusts to this interim normal.”

Forman of Vestar said the company plans to add several social distancing events to their portfolio of retail properties in the coming months. In Utah, Vestar has hosted several art walks, in which art work and other installations were displayed on the windows of retail storefronts.

"We were promoting people to come out of their cars and walk around," Forman said. "These are the types of events that are all being planned now."