Shopping Spree
Published: 02 June, 2011
Shopping Centre reports from the world’s largest commercialisation event, SPREE in Las Vegas.
RMUs have long been a feature of US malls, adding vitality to the retail mix while acting as a hothouse for emerging retail concepts. And given that commercialisation – or specialty leasing as it is called – is more mature there, it is perhaps no surprise that the world’s leading event for the commercialisation industry takes place in the US. SPREE – the Specialty Leasing Entrepreneur Expo – takes place in Las Vegas every Spring. It is first and foremost a marketplace where mall owners and managers go to meet potential RMU operators, where operators go to source this year’s hottest products and where inventors and product developers go to find a way of getting their new product to market.
And it’s the place where the large RMU designers like Stak Design and Creations Global Retail showcase their wares.
This year’s SPREE took place in the sprawling Sands Convention Center at the heart of the Strip. It hosted around 300 stands and attracted more than 2,000 delegates. And a busy conference programme ran in parallel with the exhibition.
The range of product categories on display would largely be familiar to British commercialisation managers – mobile phone accessories, hair and beauty products, clothing and so on. But there are others that are less so. Toys, especially radio controlled models, and sporting memorabilia seem more popular in the US than here.
Martin Kemp, managing director of spaceandpeople’s Retail Profile division, was one of the small coterie of UK commercialisation experts to make the trip, along with representatives of its German and Russian businesses. For him, it wasn’t necessarily the range but the quality of operators that stood out.
“Companies represented ranged from multi-national corporations, such as Cellairis, a mobile phone accessory provider which has almost 1,000 franchises in the US, to family run businesses producing handicraft items,” he says.
Kemp was on the lookout for new products that could translate to the European market. “As a result of SPREE, we came back with three primary and five secondary new product applications that we see as potentials for the UK market,” he says.
“We have organised four Meet the Management events throughout the country to meet with our current and prospective merchants in order to showcase these different products and will support any merchant who would like to trial retailing them on an RMU.”
Others are clearly doing the same because two exhibitors at the show – mobile phone accessory brands iPlayntalk and Cellairis – both said they had agreed deals to open in Westfield’s UK malls. Cellairis will be opening at Westfield London this Summer, followed by Westfield Stratford this Autumn with a nationwide rollout planned next year.
An issue for the phone accessory retailers is the increasing complexity of the mobile market. Two years ago there was basically one product in the smartphone market – the iPhone – and that changed once a year. Now there are the rival Android and Windows Phone systems, each supported on a plethora of handsets that are constantly being updated. The result is that the number of product lines needed to service all these different handsets is growing exponentially.
Change of Approach
The standard RMU is no longer capable of holding all the stock that is required, so Cellairis is now expanding into kiosks, typically 12ft by 15ft units.
So what is the mood of the specialty leasing market in the US? “Things are slowly turning around, but we’re not in the same position as we were in 2008,” says Amy Jo Hall, senior director of specialty leasing at GK Development, a Mid-West-based mall owner with a 5m sq ft portfolio.
Hall believes the downturn has forced owners to change their approach, and to become more creative. “We’ve had a lot of success with indoor farmers markets,” she says, “with traders paying up to $1,500 each for a two-day event.”
She has also successfully executed flea markets within malls, but she concedes “it’s something you have to address with your regular retailers.” And, in keeping with recessionary times, liquidation sales can be effective either in vacant units or in the parking lot. “They can drive a lot of revenue – up to $2,000 a day,” Hall says.
Perhaps because the climate in the US is not as unpredictable as Britain’s, mall owners are increasingly looking to exploit the potential of their extensive parking lots. “We’ve held ‘try & drive’ events for quad bikes, using an obstacle course in the car park,” says Hall, and we’ve also had car dealerships promoting new models.”
Other car park-based events that are growing in popularity include boat shows, RV (Recreational Vehicle) shows, antiques fairs, drive-in movies and food truck sales, where 10 to 20 different food kiosks set up in the car park.
But Hall warns: “You need to be cognisant of your parking ratios, and any agreements that you have with your anchor stores.”
And inside the malls, home-based business shows, craft shows and fashion shows are growing in popularity. “There are a lot of very creative people who could benefit from the traffic in our centres,” says Hall. “The onus is on us to find a way of working with them.”
A different international perspective comes from Deborah Kravitz, principal at Provenzano Resources. The US-based commercialisation specialist has built a strong business in the Middle East and North Africa.“
Because they started from scratch these markets are ahead of the US,” says Kravitz. “Unlike the Westfield model where every RMU is the same, every one is built individually for the merchant.”
For example, she has recently created an RMU that looks like an Airstream trailer, and an expanding RMU that grows from a 3ft by 3ft footprint to trade from 9ft by 9ft. And the latest innovation from Provenzano is the LMU – the Luxury Merchandising Unit.
In a region where the traditional market is alive and well, Kravitz says experiential marketing is a way of life. And she detects increasing demand from major brands for purpose-built units to house experiential events. “People who’ve invested in their brand don’t want to trade from an anonymous unit,” she says.
So what was Kemp’s verdict on his trip to SPREE? “I think it is so important to attend shows such as SPREE to build on the ever evolving concept of shopping centre commercialisation and to see what the front runners in the industry in the US are doing to develop the industry,” he says.
“I intend to go back in 2012 with some other colleagues to see what developments have taken place in the last 12 months and how we can incorporate these into the UK market.”
