The Internet is a big place, but most people only frequent a handful of websites during their lives and even fewer in a single day. However, a new report found that it’s much the same way when it comes to America’s top-performing malls.
According to an analysis put together by Credit Suisse and obtained by MarketWatch, the most profitable malls in the country are dominated not by a hundred or even a dozen but just six major brands. These include Lululemon Athletica, Apple, Cheesecake Factory, Louis Vuitton, Tiffany & Co. and Nordstrom. In fact, 62 percent of all Nordstrom brick-and-mortar storefronts are housed in so-called “MVP” (most valuable properties) malls that combine high foot traffic with high sales-per-square-foot ratios, and several malls, including ones in Boca Raton, Florida, and Short Hills, New Jersey, actually house all six retailers.
Credit Suisse analysts also identified an ongoing trend that is shaping the way department stores like Nordstrom and other retailers position themselves in response to growing consumer demand for, and production of, off-label brands. Instead of trying to beat those competitors in terms of style or production, Nordstrom and other retailers that snatch up high-visibility mall real estate are only making themselves more attractive options when it comes time for online-only brands to expand into the brick-and-mortar world.
“As emerging brands mature, select department store doors can serve as a physical distribution channel, in lieu of owned retail stores, or to supplement owned retail stores to reach new markets,” Credit Suisse analysts noted.
The question was once asked: Does life imitate art or art life? If more than just the big six in physical retail start jockeying for position, not out of competition to sell their own goods but to win the patronage of online brands, will B&M retailers be imitating online merchants or vice versa?
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