Alexander Babbage has released its second quarterly report on the use of social media by shopping centers and it shows continued growth in both the number of centers using social media and the number of shoppers engaged. The report also highlights which developers are most engaged in social media and reveals how adoption varies widely among the largest property owners.
Foursquare is one of a handful of start-ups in the location-based social media space. They utilize a mobile phone’s GPS capabilities to allow users to “check-in” to destinations such as stores, restaurants and bars. In exchange, proprietors can reward users with special promotions. It’s an ideal platform for shopping centers.
Consider Madison Marquette’s recent Foursquare promotion at Marketfair in Princeton, New Jersey. The center has created a parking spot dedicated exclusively to the “Mayor of Marketfair,” – the Foursquare user who visits the center most often. It’s a small promotion, but is a great illustration of how shopping centers can use Foursquare to reward power shoppers. It is the first of many new promotions using Foursquare that Madison Marquette will develop in consultation with The Dealey Group.
Just as with Twitter and Facebook before it, there are some who doubt this platform’s future success. However, there is very little downside to experimenting since there is no cost involved and it requires very minimal staff time.
For centers that choose to experiment with Foursquare, there will be first-mover advantages, including local media attention and industry buzz. This ancillary promotional benefit was given to early adopters of Facebook and Twitter.
The shopping center industry has begun to embrace the use of social media. According to a new report by research firm Alexander Babbage, nearly a quarter of all shopping centers over 300,000 square feet now have Facebook pages. (See the full report embedded below)
To better understand how to best leverage social media for shopping center marketing, Madison Marquette has joined Alexander Babbage in sponsoring Center Social, a new website dedicated to providing market research for shopping center social media programs.
One of the interesting components of Center Social is its “Top Ten Social Centers” rankings. These lists rank the top 10 centers with the largest followings on Twitter and Facebook. The data comes from Alexander Babbage and will be updated quarterly in conjunction with their quarterly benchmarking studies of shopping center social media use.
Much of the Gulf coast’s economy, especially Florida, is heavily reliant on seasonal travel during the summer and winter months. The BP oil spill is a major threat to the tourist trade at a time when most of these areas are just now beginning to recover from the economic collapse.
Shopping is routinely ranked as a top tourism activity and so any impact from the oil spill on the tourism trade could be devastating to shopping centers.
Some tourism bureaus have been particularly proactive. They recognize that reassurances need to start now when many travelers are planning their winter getaways for 2011. The Fort Myers and Sanibel beaches have launched an innovative advertising strategy that includes daily videos that highlight how clean their beaches remain. As an owner of Bell Tower Shops in Fort Myers, Madison Marquette is helping spread the word by distributing the updates via our marketing channels, including email database, Facebook page and website. Owners in other areas should consider similar efforts to assist in the clean beach messaging.
Another opportunity that center owners and retailers in these Gulf coast communities should explore is the new $20 billion BP compensation fund. While the impact is difficult to quantify today, any reduction in tourism this coming year could be convincing enough to garner payouts. The Fort Myers and Sanibel Beaches are already requesting that the hospitality industry keep track of cancellations as evidence for possible future claims.
Apple recently unveiled its new iPhone operating system and with it came more details about iAd — a mobile advertising platform that could deliver substantial revenue to iPhone application developers (including shopping centers).
The mobile ad market for 2010 is estimated to be worth nearly $600 million. According to Steve Jobs, Apple’s new platform will start controlling $60 million of that market later this year. Through iAd, Apple will sell advertising to major brands such as Sears, Nissan, Citi and Target. Application developers will be able to place those ads within their applications. Advertisers pay a certain amount every time a user views their ad or interacts with it (early reports say a penny per view and $2 per interaction). The application developer gets 60% of the ad revenue and Apple gets the other 40%. One advantage of these major brand ads is that they will be well designed and not detract from the aesthetics of an app. The same cannot necessarily be said for rival ad platforms such as Google-owned Admob.
Today, most centers don’t have iPhone or other mobile applications. The economics of spending thousands of dollars on development have not been proven despite evidence that consumers are using their mobile phones while shopping. The economic slump is certainly a contributing factor. One of the exceptions is Madison Marquette’s iPhone app for its Boardwalk retail project in Asbury Park. It’s a great fit with that property’s target market and event-heavy programming. However, it is the first in the company’s portfolio and among a small number of retail centers in the country to have one.
Just like the early days of websites, there is a relatively large upfront cost associated with these applications. While that cost will likely come down as new vendors enter the market and applications become more standardized, there will always be a cost – mostly likely a monthly maintenance fee and long-term contract.
iAds could begin to bend the cost curve and improve the ROI of mobile applications. For the most trafficked centers, iAds could even make mobile apps a legitimate driver of alternative revenue for the property.
Echoing the sentiments of others, retail leasing activity was noticeably up at this year’s RECon.
Our Carolinas team reports that BCBG’s new tween concept is coming online and is showing great promise. In addition, JCPenney is rolling out a new store format that includes full size Sephora and Liz & Co. departments. They are taking a very long term strategic approach to their leasing decisions. This smart approach is a boost for JCPenney-anchored centers. Also heard on the floor is that Rue 21 will open 500 stores in 2011.
The California leasing team is seeing an influx of Letters of Intent from prospective tenants and a big decrease in rent relief requests. Yet some of the big boxes are foregoing new developments in favor of relocating to existing centers with vacancy. Bed, Bath & Beyond appears to be relocating from A centers to C centers in search of lower rents. It will be interesting to see if that strategy is successful long-term.
Sports Authority’s new Elite concept left an impression on both coasts. The smaller footprint stores (approx. 15,000 SF) will have a suburban focus and fit some of the emerging trends in retail that PLACES described last year. The west coast team heard their focus includes Chicago and the Bay Area. Madison Retail Group’s DC office heard that Washington DC is also a focus. The DC market continues to attract restaurants and upscale specialty retail because of its relative strength.
A lot of the activity, according to Madison Retail Group’s New York office, is planning for movement in 2011 and beyond. They also say that ICSC’s regional conferences in the fall and winter are where most of the real deals are done.
Florida and Philadelphia leasing teams confirmed that there is modest activity in 2010 but that deals should really pick up for 2011 and 2012. This optimism will grow further if retail comp sales continue to gain speed.
Among the most popular means of expansion is franchising with established international operators. The expectation is that this approach helps reduce the risk of operating in previously unchartered waters. The biggest beneficiary recently has been M.H. Alshaya Co., who operates over 1,700 stores in 16 markets across the Middle East, North Africa, Turkey, Cyprus, Russia, and Poland. M.H. Alshaya Co. is the retail business of the Alshaya Group, which was founded in Kuwait in 1890.
One of M.H. Alshaya Co.’s recent coups was a multi-year franchise agreement with Williams-Sonoma, Inc. to launch their portfolio of brands in the Middle East. The first four stores are expected to open in Dubai and Kuwait in 2010 and will include the Pottery Barn and Pottery Barn Kids brands.
Collective Brands Inc. is also partnered with M.H. Alshaya Co. to franchise in the Middle East, but recently announced an expanded agreement to Russia where Collective Brands Inc. hopes to open 90 Payless ShoeSource stores in five years and up to 300 over the long run. Russia, in particular Moscow, seems to be gaining traction as a destination for U.S. brands.
Another risk-mitigation strategy is co-branding. Cold Stone Creamery recently pursued such a strategy when entering Denmark. The company partnered Michelsen Chokolade, the leading chocolate manufacturer and retailer of Denmark. The first two co-branded units opened in June 2009 in Copenhagan. Eleven more co-branded stores are in the works over the next year.
By Stephen Stephanou, Principal of Madison Retail Group
I recently returned from a trip to Paris and came away with a distinct sense that London is now the shopping destination for Europeans.
There were major trade shows in Paris the weekend that I was there so there were not only English, but German, Italian and Spanish being heard in addition to French. But the traffic and number of vendors at the shows was down this year. Charming hotel rooms could still be had – when in previous years, a late inquiry for a room for the weekend would be met with a somewhat cynical “non”. And as one Londoner put it, the shopping trip for those on the Continent now seems to be London – quote ” the cheapest place to buy a Rolex”. With the pound off its pinnacle, droves of shoppers are flying over on cheap fares or taking a long weekend via the Eurostar.
On the positive side, I did come across a brand new retailer with one store on the rue du Bac on the Left Bank (brochure here). The specialty is father and son clothes, only one store and not even a website yet. It had very nicely made casual clothes – denim and shirts and sweaters, sort of the J. Crew men’s store genre. It was also nicely located in the 6th arrondissement, a second home to many specialty stores that have locations on both the Right and Left Banks.
Another note, Polo is opening its third store in Paris on the Boulevard St. Germain. It is a stone’s throw from the local and affluent out of towners’ haunts like Brasserie Lipp, Les Deux Magots, and Cafe Flore. But the number of shoppers did seem down – and sales are presumably down as well.
By Whitney Livingston, Regional Director of Marketing
Bayfair Center in San Leandro recently announced Ben Wanzo and his TeachBar retail concept as the winner of its “Retail Star” competition. TeachBar will be a dynamic meeting place where people receive education and training while indulging in great tea products. Combining the community aspects of Starbucks with the seminar space of the Apple Store, it will become a destination within the center.
As the winner of Retail Star, Wanzo received $25,000 in start-up capital, free retail space for a year and up to $200,000 for build-out. TeachBar is scheduled to open in November and Wanzo already has a slate of classes ready to go for area high school students.
The competition attracted dozens of entrants and several of the finalists are being approached about traditional leasing opportunities at the center.
We are actively tracking public and non-public news about U.S. retailers to gauge their relative risk of bankruptcy or other major restructuring that could impact commercial real estate owner and operators. Below is a summary document highlighting recent commentary on each retailer and labeling them as either low, medium or high risk. As recent reports suggest, we expect additional bankruptcy filings in the months to come.
PLACES is a publication of Madison Marquette, a national retail real estate investor, developer and operator. Based in Washington, D.C., the company maintains regional offices in New York, San Francisco, Philadelphia, Los Angeles, Ft. Lauderdale, San Diego, Charlotte and Seattle.
Today, most centers don’t have iPhone or other mobile applications. The economics of spending thousands of dollars on development have not been proven despite 
