Malls Embrace Modular Retail Tenants

Malls are providing digital native brands with the opportunity to rent space without the typical lengthy commitment. In one case, real estate investment trust (REIT) Macerich is bringing a concept called BrandBox to its Tysons Corner Center mall in a Washington, D.C. suburb. While Macerich’s normal lease term tends to span three years to a decade, its BrandBox spaces come with a much shorter commitment of between six months to a year.

The space can appeal to digital native brands that might want to dip their toes into the world of brick-and-mortar retail. Naadam, a luxury ready-to-wear cashmere brand, lived online during the first years and it is one of the brands joining Macerich’s Tysons Corner location. Naadam Chief Executive and Co-founder Matt Scanlan told CNBC, “We view BrandBox as a safe environment to test our brand in a mall environment.”

At the same time, the concept can help brands like Naadam mitigate the challenge of opening brick-and-mortar stores in different markets — and ultimately, running them. Scanlan said in a press release that working with the concept to enter the market in Washington, D.C. has really “streamlined the laborious process of creating a storefront that truly encapsulates our brand ethos.” Macerich has reportedly been able to significantly shorten the time it takes a retail store to get set up and running, after all.

With BrandBox, Forbes reported that brands can open stores in three weeks. By contrast, the complicated process of getting their own professionals and equipment to set up a store can take three to 12 months. Along with the faster setup, brands pay a monthly fee to Macerich that includes analytics tools to keep track of foot traffic and sales, among other variables. The spaces aren’t only smart — in the technological sense — they are also flexible.

To accommodate different brands, the space has walls that can move along with tracking systems that can accommodate a new setup. As a result, the space can be crafted to accommodate the needs of a number different of brands — that is, the space doesn’t always need to have the same number of brands within the same footprint. Macerich Executive Vice President and Chief Digital Officer Kevin McKenzie told CNBC that he sees the concept as a learning tool to apply to the broader world of shopping malls: “I think what we’re learning as an industry is that we need to have modular space that can be reconfigured.”

Mall Owners Get Flexible With Spaces

Macerich is not the only mall owner turning to more flexible retail arrangements for brands. Simon, for instance, is offering a “scaleable retail platform” called The Edit. The concept is similar to BrandBox in that it gives eCommerce startups the ability to test drive physical commerce in front of a live customer audience.

The Edit, like BrandBox, is also pitched as a turnkey solution, meaning that everything from fixtures to security to displays to background music are on offer for a monthly fee. And, similar to BrandBox, commitments range from one to six months instead of the 10-year lease that goes with a standard mall space.

Simon announced the launch of the concept last October, a few hours away from Washington, D.C. at Roosevelt Field, said to be New York’s largest mall. One of the latest brands to launch at The Edit is denim brand Revtown USA, which will offer a 30-foot wall of denim in a “complete range of washes and fits” along with a Shopify-powered checkout experience as well as a customer lounge. With The Edit concept, Revtown Chief Marketing Officer Steve Battista said in an announcement that the concept “expedited our journey into physical retail earlier than we initially planned.”

The idea, then, is that spaces with flexible lease terms can shorten the time it takes for a digitally-native online brand — or any retailer, for that matter — set up shop in malls across the country.