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The Real Deal Los Angeles

How Westside malls are competing with the Everything Store

Retail landlords are pulling out all the stops to lure holiday shoppers

Some of the holiday festivities at the Grove and developer Rick Caruso (credit: Caruso)

How do you compete with one-click ordering? With Amazon’s e-commerce juggernaut gobbling up an ever-increasing slice of the holiday market, Westside retailers are trying live concerts, pop-up vendors, light shows and even giant reindeer to lure shoppers.

Rick Caruso’s Grove and the Americana at Brand kicked off the season with elaborate tree-lighting ceremonies, followed by a series of performances and special guests. Seth MacFarlane, Lea Michele and Rachel Platten sang at the Grove, and both retail centers hosted Santa and Mrs. Claus in picture-perfect houses, complete with nightly snowfall, said Liz Jaeger, a representative for Caruso, the company which owns both shopping centers.

In 2016, the Grove was ranked second in the U.S. for sales per square foot, according to an analysis of shopping centers by Green Street Advisors. It reported sales of $2,200 per square foot, up from $2,140 in 2015. The Americana at Brand made the top 15 in the same analysis.  

The International Council of Shopping Centers forecast a 3.3 percent year-over-year increase in retail sales at physical stores this holiday season, up from the 2.2 percent growth seen between 2014 and 2015. Holiday shoppers plan to spend about $685 this year, according to ICSC’s holiday survey, which estimated that 91 percent of shoppers will spend the bulk of their holiday budgets in physical stores.

That goes against the results of Deloitte’s annual consumer shopping survey, which said that 50 percent fewer consumers plan to visit malls when compared with 2015, Much of that activity will be absorbed by online retailers, the Deloitte survey said.  

Santa and Mrs. Claus will also pull their sleighs to Two Rodeo Drive in Beverly Hills. The mall has a string quartet and a jazz trio busting out holiday favorites. “We always decorate the place to the nines,” said Bill Wiley, an executive at Two Rodeo Drive, which is owned by Sloan Capital and managed by CBRE. “People always want to see what the theme is, and this year we have reindeer – huge gold reindeer, some as tall as 13 feet – around the property.”

Offering a range of experiences is key for retailers. Eighty percent of consumers in the ICSC survey said they’d participate in other activities, such as dining and movies, when visiting a mall. About half of adults with children under the age of 13 said they plan to have their child’s picture taken with Santa this holiday season, and social-focused displays are drawing shoppers’ attention, too.

Outside Two Rodeo, there’s a social-media friendly (#onlyonrodeo) photo booth that looks like a gift-wrapped box. The Grove and the Americana are trying to get more social, too: Both partnered with Uber to offer complimentary transportation for guests who spend more than $450.

Pop-ups are drawing another coveted audience — millennials — to L.A.’s mall scene. The Grove and the Americana, for example, have played host to Jessica Alba’s Honest Beauty, Nicole Richie’s House of Harlow 1960, Revolve, and other brands.

“Throughout 2016, consumers have demonstrated a tendency to shop across both digital and physical retail,” said Tom McGee, CEO of ICSC. “Even shoppers who purchase online favor retailers with a physical presence. Consumer intentions show that this digital/physical convergence will be critical for the health of the industry as we close out the year.”