Mall Futures

service design

Mall Futures Š 2010

MiD_MF_Book_Cover.indd 1

5/14/11 2:34 PM

Joshua Chadwick Giacomo Ciminello Andrew Grossman Benjamin Farahmand

Mall Futures

Published by

211 South Broad Street, 5th Floor Philadelphia, PA 19102 Copyright Š 2010

Copyright © 2010 by Joshua Chadwick, Giacomo Ciminello, Benjamin Farahmand & Andrew Grossman Illustrations copyright © 2010 by Joshua Chadwick & Giacomo Ciminello All rights reserved. No portion of this book may be reproduced–mechanically, electronically, or by any other means, including photocopying–without written permission of the publisher.

Cover design by Joshua Chadwick Book design by Giacomo Ciminello Masters of Industrial Design at The University of the Arts 212 South Broad Street, 5th Floor Philadelphia, PA 19102 First printing December 2010

Table of Contents VOL. I

MALL FUTURES

8 Project Introduction 16 History of Retail 22 The Mall Model 32 The Fall of The Mall 44 Observations from Nonshoppers 56 Understand the Client 66 Synthesizing Data & Proposed Solutions 102 Reflection

Fall 2010

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We used to build civilizations.

Now we build shopping malls. ~bill bryson

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chapter I

project introduction

As vacancy rates at regional malls rise all across the United States, mall owners and agents have been looking to develop new uses for these prominent retail spaces in ways that take into account the interests of potential tenants and shoppers.

iT STARTS WITH “hUMANTICS” In the summer of 2010, The University of the Arts (UArts) hosted a workshop on group dynamcs, interaction and communication. Almost a hundred individuals representing human resource departments from various companies across Pennsylvania were in attendance. These HR professionals were divided into small teams, given simple organizational tasks and asked to synthesise and visualize their results collaboratively. With the help of our student facilitators, the attendees thoroughly enjoyed their 2-hour exercise. One of these attendees was particularly impressed and saw 10

the benefit of sharing this design methodology with her company.

This attendee works at prominent mall developer (MD). After attending the summer workshop this attendee approached the Masters of Industrial Design (MID) program at UArts and proposed a collaborative effort in which MID students would design innovative solutions to address the challenges of mall vacancies.

Before the team of MID students fully engaged their client, they began studying the history of malls, retail and MD’s properties. Later, this allowed them to approach the problem without the client’s influence. The solutions they imagined and presented, consequently, were at the mall scale. Over the course of several weeks and meetings with MD, the team realized the need to address these issues on the corporate scale as well.

“…a collaborative effort in which MID students would design innovative solutions to address the challenges of mall vacancies.”

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mall futures team

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Giacomo Ciminello B.F.A Graphic Design

Andy Grossman B.A Modern Philosophy

Joshua Chadwick B.F.A Industrial Design

Benjamin Farahmand B.A Philosophy, B.S Aerospace Engineering

Background in advertising, art direction and interactive design

Background in not for profit magazine publishing and photography

Background in packaging design, product design and photography

Background in propulsion, sustainable design and metaphysics

our process

Mall Futures MID@UARTS

research evaluate research evaluate

observe

observe

synthesize synthesize

prototype

define

prototype

define

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project

Timeline Adjusted based on first meeting with client

Kick off presentation with the client

Received project brief

Broke into groups: office & malls.

WEEK GROUP RESEARCH OBSERVATION INTERVIEW MAPPING VISUALIZE BRAINSTORMING ANALYSIS PROTOTYPE

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1

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7

Second client presentation

Concept proposal presntation Obtained workspace in client’s office

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Closing presentation

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The project concluded with the potential to extend beyond the semester. The client expressed a desire for the MID team to run a workshop based on what they proposed. The project could also continue as an extended project in the next semester.

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chapter II

history of retail

Shopping centers have existed in some form for more than 1,000 years as ancient market squares, bazaars and seaport commercial districts. The modern shopping center, which includes everything from small suburban strip centers to the million-square-foot superregional malls, had its genesis in the 1920s.

The Greek Agoras - 1500 BCE

Trajan’s Market - 110 CE

The Burling Arcades - 1819 CE

From Neolithic to Modern

The story of retail begins with market places that facilitated the trade of commodities. The oldest record to date, 7000 BCE, is the Neolithic City of Catalhoyuk, which was a large settlement located in southern Anatolia (modern day Turkey). The Greek agoras (1500 BCE) were the next phase in the development of retail. These agoras were both a market place and a public forum. They promoted the exchange of material goods as well as ideas and were the hotbed of Greek life.

Taking a leap to the Roman Empire in the year 110, Trajan’s Market was a multi-leveled structure built with alleys and corridors to house a plethora of small stores and offices. It is believed that the higher levels of the structure 18

housed Trajan’s forum, making this market center also a political location.

In essence, retail locations began as the center for community life, a place where individuals and families spent time not only exchanging goods but also ideas and conversations.

Jumping forward fifteen centuries, we begin to see the development of the modern retail environment taking shape.

The history of the American shopping mall traces its roots to the arcades of the 1800s. These arcades were large enclosed spaces containing shops on either side of a walkway. The Burlington Arcade was one of the first arcades built, established in Britain, 1819. From there, the first introduction of the arcade

to America was the Providence Arcade, built in 1828. Moving to the 1850s, the advent of escalators and air conditioning paved the way for large stores that could be vertically built and remain active in the warmest and coolest environments.

These large climate controlled spaces provide convenient locations for people to spend time and money. Department stores such as Macy’s took advantage of these newly developed technologies and became the trend setters for the next hundred years. This period between 1850 and 1950 has been marked by the rise of department stores. To go to the city essentially became synonymous with shopping. (Reference: Harvard Design School Guide to Shopping)

Macy’s first opened on October 28, 1858.

First-day sales totaled $11.06 (approx. $287 in 2007 USD) 19

It wasn’t until 1950, with the end of the second world war and a shift in popular living from the urban to suburban that the department store model declined. This shift was triggered by urban core decay - the abandonment of downtown areas. As many families relocated to the suburbs, their shopping locations shifted with them.

Door-to-door salesmen were the norm and the convenience they offered could hardly be matched. This paved the way for the next phase in the development of retail - the rise of the mall.

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Enter the Mall 21

chapter III

THE MALL MODEL

The early malls moved retailing away from the dense, commercial downtowns into the largely residential suburbs. This formula (enclosed space with stores attached, away from downtown, and accessible only by automobile) became a popular way to build retail across the world. Gruen himself came to abhor this effect of his new design; he decried the creation of enormous “land wasting seas of parking� and the spread of suburban sprawl.1

Gruen’s Design, Dissatisfaction, and the Developer’s Dream Victor Gruen is considered to be the founding father of the mall. Although not personally interested in shopping, he proposed the shopping mall should be the basic unit of urban planning and could redefine the city. His Utopian vision imagined relocating the urban to the suburban, creating a sense of community within the mall, much like the Greek agoras and Roman market places.

He envisioned a multifunctional space for people to congregate; where people could learn, play and eat. However, when mall developers picked up his idea, they turned it on its head.

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Gruen’s precise vision never saw the light of day for a number of reasons.

Principal among them, he didn’t predict the boom of the automobile industry and the public need for sprawling parking lots, roads and highways. When the mall was built, it needed to accomodate the cars people drove. These parking lots inadvertently created a “moat” around the mall, separating it from the rest of the community. While the mall was intended as the center of life for the community, it became quite the opposite. Mall developers streamlined traditional malls into shopping malls by bombarding visitors with advertisements and creating

a sense of disorientation and confusion upon entrance. The mall environment was engineered to carefully direct traffic, leading the consumer to spend as much money as possible. This type of disorienting over-stimulation became known as the Gruen transfer. As people parked their cars, walked through the mall entrance and transferred into the mall space they would be confronted by advertisements, floor designs, and a confusing layout that would force the consumer to forget their original intentions for going to the mall. Gruen lamented this phenomenon.

The Cherry Hill Mall designed by Victor Gruen and opened in 1961 is still regarded as the model of retail shopping to this day.

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iceberg ahead

The shopping mall model revolved around a two-fold leasing plan: larger spaces would be leased out at a lower price per square footage in order to attract large department stores; smaller spaces would be leased out at a higher price per square footage in order to make up for lack of revenue from the large department stores. These large department stores acted as anchors, attracting consumers from nearby communities. By attracting consumers, foot traffic from the anchors would spill over into the enclosed shopping space shared by a several smaller retailers.

Strings of these smaller stores would be intentionally positioned between larger department stores. Once this working model for the shopping mall was developed, it stayed roughly the same throughout the second half of the twentieth century. It served as a place where people could find everything they wanted to purchase in one stop.

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Mapping Growth

Mall Development since 1960 28

800

39%

37%

700

Walmart

165 Billion in Sales

retail space in million square meters

600

3.6% of US Walmart

US Malls

1.5 Trillion in Sales

500

400

75 % of US 29% of World U.S. Malls 300

10%

200

100

14 % of Asia Japan

31% of Europe United Kingdom

0

United States 772,350,000 sq m

Asia 736,950,000 sq m

Europe 180,600,000 sq m

Global Retail Market per the Harvard History of Shopping (2001)

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Shopping malls eventually took three forms: the regional, the super regional, and the power center. The regional is an enclosed shopping mall with a 15 mile service area and 400,000 to 800,000 square feet of gross leasable area and at least two anchor stores. The super regional is also an enclosed shopping mall. It has a 25 miles service area with over 800,000 square feet

Regional

l Super Regiona

• 15 mile service area • 400,000 - 800,000 sq ft of GLA • at least two anchor stores

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of gross leasable area and three or more anchors. The power center is unenclosed, with a 25 mile service area. It ranges between 250,000 and 750,000 square feet of gross leasable area and contains three or more big box retailers and several smaller retailers.

per the International Council of Shopping Centers

• 25 mile service area • 800,000 + sq ft of GLA • three or more anchors

Power Center

• 25 mile service area • unenclosed • 250,000 - 750,000 sq ft of GLA • contains three or more big box retailers and various smaller retailers

ominous signs ahead

Big Boxes introduced in the late 70s began to chip away at the mall’s net worth.

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chapter IV

the fall of the mall

There is no single discernable event that marks the decline of the shopping mall. From the steady rise of Internet shopping to the 2008 presidential themes urging Americans to focus on saving their money and a more “green� consciousness, the shopping mall’s story has a growing list of antagonists.

Modern Work Behavior Work/play distictions blurred

140 k

120 k

Modern transportation infrastructure 100 k Road and parking congestion 80 k

60 k

40 k

20 k

1970

1971

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1975

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1978

1979

1980

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1984

Millenial Generation Those born during this era are more green-conscious, more aware of their consumption, carbon footprint, and being “sustainable�

Shopping Center Construction (square feet) 34

1985

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Politics/economy Campaigns urging conservative spending Fast-paced postmodern attitudes Going to the mall is/was/might be a chore

The Internet Instant gratification

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2

Average Mall

$250 $600 Mall of America

MoMA

$1,750 Heathrow Airport everyone wants a piece Retail Sales per Square Foot (annually) 36

$2,500

Consumer Electronics

retail experience comparison

Best Buy

39,000 sq ft per loc.

$876

Apple

6,000 sq ft per loc.

$4,616 Retail Sales per Square Foot (annually) 37

The Gruen transfer is dead,

long live Victor Gruen!

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the perfect storm

“It is our belief that there is much need for actual shopping centers--market places that are also centers of community and cultural activity. We are convinced that the real shopping center will be the most profitable type of chain store location yet developed, for the simple reason that it will include features to induce people to drive considerable distances to enjoy its advantages.” -Victor Gruen, 1948

from home. Leading up to the 2008 presidential election, Republican nominee John McCain and Democrat Barack Obama spoke frankly about the need for Americans to dial back their spending habits. The country borrowed less and saved more. The “green” conscious generation was increasingly concerned with sustainability and less interested in buying new and shiny products. Mall attendance was down.

The Internet’s accessibility created an atmosphere that changed consumer attitudes towards products and services. People grew to appreciate the convenience of private shopping 39

bRANDS TAKE THEIR BUSINESS ELSEWHERE As some brand names continued to use the mall and its anchors as a spring board to launch their stores, other brands set out on their own. This trend saw the rise of brand stores like the Nike, Puma, and eventually Apple. Large, old fashioned department stores were no longer able to attract people looking for specific brands and saw their foot traffic decrease. As these large anchor department stores were on the decline, overall foot traffic that once spilled into the interior mall walkways decreased as well. Currently, brand stores remain on the rise.

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Domesticated animals and inventions like the wheel improved our ability to transport goods over greater distances.

Foot travel - our first mode of transportation.

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As train tracks crisscrossed the U.S. coast-to-coast travel became a reality.

The Wright Brothers achievement of flight ushered cheap inntercontinental commodity sharing.

Malls brought the arcade model to suburban communities.

Arcades provided a centralized shopping center and shortened shopping time.

U.S. highways introduced a versitile infrastructure that connected cities to the suburbs.

The Internet offers convenience, instant gratification and flexible comparison shopping.

speed of retail The speed of retail has evolved alongside technological advances. From having to travel by foot and carry goods by hand to animal-driven carts with wheels, trains, trucks, planes and the Internet, the length of time between desire and acquisition has steadily decreased.

Simultaneously, the ease with which we have been able to consume goods and services has continued to increase.

Combined, this makes for a powerful force in retail shopping - and one that threatens to bypass the shopping mall if it fails to adapt to the modern consumer.

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chapter V

observations from nonshoppers

If men liked shopping, they’d call it research. ~cynthia nelms

e u v e l l e B

ll i H y herr

C

e y ov r er l G l The Ga Willow

field work, living the dream and tapping our inner woman.

As a part of our research, the group visited several malls in an effort to better understand how a customer interacts with their retail environment. We stepped into the mall and began shopping. We ate, socialized and walked around. We also tried something less traditional to the mall environs: we worked at public tables. We sat down with all our necessary materials but couldn’t focus.

We felt out of place - we clearly weren’t acting within the current norms of a mall.

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Can we do our work in a mall?

Attempt 47

work produced in the mall 48

work produced upon immediate return to the studio environment 49

Social Class

Design

Range of Options

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Aesthetics

Age

Lighting

Anchors

Tenants

Kiosks

Architecture

We spot vacancies in more locations than expected

Approximately 70% of a mall’s GLA is empty at any given time.

true

false 51

problems observed The group noticed that some malls failed to adequately represent their communities’ concerns and desires. Say, for example, that citizens of a community request Aeropostale to join their mall.

If that retailer doesn’t see the ‘right’ conditions available in that particular shopping mall, such community requests will be left ignored. Traditionally, mall tenants (as opposed to mall-goers) have the final say concerning the occupancy of their mall. For example, Aeropostale may only move into a mall if they are guaranteed close proximity to an American Eagle. Aeropostale may even demand the mall finance and construct their storefront before agreeing to their lease. This retailer mentality, which perpetuated the disconnect between 52

shopping malls and communities, is discussed further in the section Not in Control of Their Own Malls.

Within a certain mall belonging to MD, the group noticed what appeared to be ineffective store placement, ignored demographics and aesthetic unpleasantness. A jewelry store was situated directly beside a fish market and directly opposite the subway tracks. We failed to imagine a happy jewelry store customer forced to inhale the aroma of shellfish and brake dust. Additionally, this jewelry store was separated from similar accessory retailers upstairs and could not take advantage of any such cross-traffic. The piped-in muzak was unchanged from twenty years ago.

We observed under-served groups such as husbands who sat on benches, idly waiting for their wives. And unique to the Gallery at Market East was the sheer volume of commuters who seemed always to hurry through the Gallery once they got off the subway. Blue collar and well-to-do alike never missed a beat and continued past the dimly-lit pizzerias and perfume kiosks. None of this, the group thought, was particularly conducive to shopping.

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4

Areas requiring attention

Identifying the need to focus our efforts and make the best use of our semester, we identified four key areas of intervention: the exterior, the interior, groups within the mall, and individuals within those groups. The exterior of the mall included the architectural facade, nearby communities, and street presence. The interior of the mall included retailer positioning and aesthetics such as lighting, music and common area foliage. Groups of people (depending on the mall) indicated huge income potential if they were categorized “under-served�.

Finally, the individual, while requiring a specialized degree of personalization executed in few malls around the world, represents the greatest opportunity for capitalization. The Internet has already paved the way for virtual personalization.

Using Amazon and cross-platform information exchange with social networks like facebook as our model, we imagined the mall as a prime venue for the physical representation of traditionally cyberspace-only affordances.

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Architecture What impressions did a mall’s outward appearance leave us with? Was the mall inviting or was it imposing? How well did it integrate the values of the community in which it was situated? Was it light and airy? Or did it appear impenetrable? If parking was offered, how convenient and integrated were the lots? Were those lots lit or covered?

Community

Groups

Individual

If a mall’s community did not embrace their mall, who did? A community is comprised of its citizens, visitors and commuters, and the mall’s success as a destination hinges on how a community presents their mall.

With distinct groups of mall visitors comes great opportunity to focus services towards them. We observed so many under-served visitor groups, it seemed curious that they should be in the mall at all. We imagined a mall that could identify and accurately target their mall-going groups would be a more successful mall.

Within these groups, of course, is the individual. And central to the individual’s shopping personality is their online shopping history and deadly accurate marketing. Our ideal mall would seamlessly integrate this modern paradigm into the fabric of brick and mortar retailing.

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chapter VI

Understand the client

Relaying our findings to the home office, the group discussed how best to proceed. We emphasized MD’s need to focus on three new themes: communication, identity and collaborative workshops. These would influence the final direction of our project deliverables.

who is preIt?

Founded in 1960, Pennsylvania Real Estate Investment Trust (PREIT) is self-described as one of the first real estate investment trusts established in the United States with a focus on retail shopping malls. PREIT is headquartered in Philadelphia, PA and their properties are mostly concentrated in the midAtlantic region of the Eastern U.S. In 2010 PREIT closed secured credit facility with $520 million of term loans, had a public offering of 10.35 million shares at $16.25 per share, with net proceeds of $160.6 million.

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View of PREIT’s home office lobby, third floor of the historic Belleview building, Broad Street, Philadelphia 59

Office

Our team concentrated its resources by dividing into two sub-teams: the office pair and the mall pair 60

Mall

“We don’t know our markets.”

interviews To compliment our academic research efforts and field observation, the group organized a battery of interviews both within the home office and on-site at the properties. Having created a template of questions beforehand, most interviews began with the understanding that we would not take more than half an hour of the executive’s time. This, however, was rarely the case: executives were eager to discuss the ins and outs of their daily operations; their work flow; their inter-departmental needs; and, most interestingly, the shortcomings and challenges their office presented.

Whether speaking with Development, Leasing, Marketing or Legal department, the group heard the same themes.

Money was tight but there was an obvious need for innovation and change.

There were more redevelopment projects in the works than development. There was no process in place to monitor a property’s health. Things could operate more smoothly and whether or not we prompted them, they each recognized the need for change. Some admitted MD would have a questionable future without some form of change - and fast.

To lightly paraphrase the majority of these many interviews, the group heard: “We’re not the biggest gorilla so we’re happy to represent our niche - solid C level properties,” “Spaces need to be more team friendly,” “I’m not the mall customer, I avoid shopping at malls...” and one point became clear: in a strong economy, a Real Estate Investment Trust (REIT) can afford to listen to its tenants.

But in a weak economy, a REIT must push its vision. At this the group was astonished. After 8 weeks the group still could not identify what this “vision” was.

And neither could MD. 61

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INTERVIEW CLOUD

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observations

To complete the picture of a mall, its history and its development we had to understand the process by which a mall comes into being. We had to take copious notes, pictures, video and strike up conversations with patrons. Our corporate interviews had to capture what MD thought of the mall-going experience in general as well as the experience at their own properties. We inquired as to the types of groups and individuals who frequented their properties. We poured over spreadsheets, market research, past redesign proposals and the inner workings of tenant contracts.

With each discovery came several more 64

variables. The question that became most pressing: how could we continue to manage the client’s expectations of our project? What were we truly seeing?

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chapter VII

synthesizing data & Proposed Solution

24

5

293 photos

186 sq. ft of paper

interviews

408

POST ITS

1,894 pages of text

4

14 malls

sleepless nights

weeks

Mall redevelopment starts at home For us - three twenty-somethings in graduate school (and one thirtysomething) - to evaluate this project solely as an examination of the mall and retail environment would be to miss the point. A larger issue emerged as we thought more about the big issues inherent to mall futures: it was about the 68

people who make decisions. And those people had invested in their futures at MD. The talent across departments was clearly impressive. They didn’t have to stay at MD but they chose to because they saw something there. They saw a future. And we saw that the future of mall (re)development depended on how

the company operated on a daily basis.

If they could incorporate some changes at home, those attitudes, strategies and values would consequently influence and be reflected in their properties. We held up the figurative mirror.

Series of

Offsite Strategic Leadership Forums

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Problems of note

The Offsite Onsite Vacant Spaces Store Misplacement Broken Escallators A Dated Aesthetic The Great Divide

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mall problems mirror the office As the group deconstructed core problems as they presented themselves in the mall and retail environment, it became increasingly apparent that many were mirrored in the MD home office environment. From vacant and unused spaces to broken lines of communication, the lines distinguishing our focus on the mall property versus the office space began to blur. Were we focusing exclusively on the mall property or should we take a closer look at the environment in which plans and their responsible departments come together?

Inter-departmental communication and

collaboration appeared to be poor at best and absent at worst. The physical aesthetic of MD’s corporate space was strikingly similar to their property’s and likely from the same period. If one needed a refresh, they both did. And that was precisely what we decided to underscore.

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problem analogy

The Offsite Onsite

MALL MANAGEMENT

THE MALL

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mapping influence of redevelopment decisionmaking MALL MANAGEMENT

Through a series of interviews and mapping exercises, we tried to determine where departments thought they had been heard or had influence in the redevelopment process.

Each circle represents a different department.

Overlaps show how much communication that department has with another. The larger the circle, the more influence that area has in the decision-making process.

MD CORPORATE

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! s y a s y e v sur What is the vision of the Gallery?

CURRENTLY? I’M NOT SURE. DEPENDS ON WHO YOU ASK. IT DOESN’T HAVE ONE YET. SOMETHING RELATED TO THE BIG PICTURE. TO MEET THE NEEDS OF THE COMMUNITY. UM, HMM. 74

SCENARIO

DEFINE YOURSELF A brand has the power to assign a shared understanding or focal point to an otherwise fragmented product. The mall property appeared to need this sort of assistance. The group rebranded The Mall to illustrate the benefit of a cohesive property vision.

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I live for my city. I dance in it. I walk in it. I own it.

I do more than dream about life, I live it. If its being done, I want to experience it, see it, play with it, watch it. I do not want to create fads, I want to be one. This is my city, and this is me.

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We delivered a branding package with statements and potential partners as an example of how The Mall could rebrand itself. The hope was to allow MD to see the potential in their existing product 77

problem analogy

vacant spaces

This project could just as easily have been called MD futures. With so much vacant office space, it struck us that the people responsible for leasing retail space are quite accustomed to seeing space wasted at home. This couldn’t be inspiring, we thought.

Vacancies throughout The Mall.

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well more than

40% of PREIT’s office space was empty

Vacancies throughout MD’s office.

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“I could definitely see the benefit of a project space.�

The same office system incorporated above used in a more efficient manner to create collaborative workspaces 80

SCENARIO

REFINE YOUR SPACE MD’s office layout had the potential to be far more open and creative than the group observed it to be. Without changing their furnishings, a modular Herman Miller-influenced layout would open up their claustrophobic floor design and encourage employees to peek around desks and over dividers.

Conversations could spawn new ideas

and old ideas could gain new traction.

Even private desks would allow for more work transparency. If someone could see their colleague working on something interesting, that awareness could then foster improvements in their work. The silent afternoons spent staring blankly at spreadsheets, playing computer solitaire and surfing Facebook seemed less than

productive to us. Refining the work environment is relatively quick, easy and cost-effective.

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A jewelry kiosk is curiously stationed beside a fish market

problem analogy

Store Misplacement

It’s difficult to properly place retail stores in a limited amount of space, restrictive leasing contracts to follow aside. But we had trouble understanding why the retailers were given such power to control their location within the mall when it seemed detrimental to the property’s overall well-being. We imagined a better customer experience in a mall with 82

refreshing variety, interesting mixes of brands and logical patterns of store types. The example above highlights just one particularly bad example of store placement, however it underscores the types of discontinuity we observed across the board.

“We’re divided up by departments ... and all those departments are scattered about.”

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MD’s leasing process, abstracted - each color represents another department or group of people

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Not Always In Control Leasing and development’s problems are not exclusively their own. The land on which their properties sit is not always in their control. The inline tenants and anchors often renegotiate their lease agreements which reduces their rent and excludes them from paying into the marketing budget. Eleven properties in the portfolio have no marketing director. The city (RDA) presents years of negotiations and agreements to settle.

And MD does not own the common space separating inline stores. This alone limits the control they have over foliage, decorations, lighting walkways

and foot traffic through the property.

And although the specialty leasing department (which has no involvement in redevelopment) leases and maintains common space kiosks, these come and go with the shopping seasons.

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Communication Success

Communication Failure

One anectdotal example of successful communication we observed includes the serendipitous placement of White House | Black Market. A leasing agent with a marketing background was able to conduct open dialogue with his ear to the ground: aware of the leasing opportunity and the retailer’s interest, he brought the necessary departments together in time for the lucrative deal to go through.

Sometimes opportunities go unnoticed. When the mall was actively pursuing new restaurants to add to their lineup, a Melting Pot location chose a nearby venue instead of MD’s property. Had the two known about each other sooner, they very well might have partnered. This speaks directly to the limited perspective inherent to silo’d departmental thinking.

SCENARIO

TEAR DOWN SILOS Silos needed to come down if we were to imagine fewer missed opportunities in the future. MD’s home office appeared to have distinc silos and mall properties had offices which were not always well integrated to the property itself. Beyond this, the property managers and marketing teams weren’t always in sync with the home office. The company was seemingly trapped in very analog methods of communication: monthly property updates by phone or in print, face-to-face chats that required time consuming

elevator rides, memos, phone calls to confirm or ask questions and other redundant practices. While we are aware that each of these communication methods has its rightful place in the workday, we mean only to impress that the essential information exchanged must be centralized and updated in real-time. Then all of these time wasters could be eliminated. People wouldn’t feel so silod and the disconnects might be self-remedied.

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How do you know when an escalator is broken? When it’s a staircase.

problem analogy

broken escalators

It’s difficult to get around when your primary means of transportation is cut off. It’s difficult to get ideas off the ground when those transmissions are interrupted or cut off at the source. We want to encourage the free flow and exchange of thoughts, ideas, questions and contributions. If your customers can’t get around the mall, how many 88

alternative solutions will they seek before giving up? We aimed to bring an improved level of transparency - a clearer path - to the MD communication and action processes.

“When a mall is sick it’s too late.

That’s expensive. The trick is to find problems early and keep [malls] healthy.”

Strawbridge & Clothier is an anchor tenant that went bankrupt and left a scarring gap in the mall’s landscape.

How do you know when an escalator is broken? When it’s a staircase.

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SCENARIO

MALL DIAGNOSIS So how, the group wondered, does MD determine when a mall property is “sick”?

What quantifiable criteria define this stage and prompt reactionary measures? What figures trigger preemptive action to stave off obsolescence? The group couldn’t tell. Without a clear company strategy, MD seemed to be remarkably successful turning troubled assets around. But this

lack of overarching strategy does limit their ability to monitor the portfolio for “red flags”. The company fails to see when a “bleed” begins - let alone when a tourniquet is required.

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problem analogy

dated aesthetic

Perhaps the group was more sensitive to the aesthetic sensibility of the property than your average mall-goer, however it did seem particularly in need of a refresh. When we heard that the property had “a lot of physical life left in it� it was difficult to imagine just how much life MD foresaw.

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The appearance of The Mall is dated and in a state of disrepair.

Clients (retailers) truly have the landlords by the balls. This yeilds identical (cookie cutter) malls in multiple locations.

Antiquated Thinking The entire leasing process gives the retailers the power to dictate what a mall looks like. This results in many shopping malls which look, feel and work in the same manner.

MD’s control issues don’t end here.

Retailers also have an increasing amount of authority in the mall space. These

retail voices can be divided into one of two categories: the pioneer and the follower. Pioneers enter new, untested markets and blaze potentially lucrative paths for similar retailers. Followers, on the other hand, pay close attention to these activities and demand that other like-minded retailers occupy nearby mall space before agreeing to a lease. In

either case, it’s the aggressively penned leases that determine how much the retailer pays per square foot, whether MD must pay for and construct the storefront and what neighboring retailers they can assure tenancy. Bargaining power hardly seems balanced.

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$$ A Troublesome Paradigm Retailers have an increasing amount of authority in the mall space. These retail voices can be divided into one of two categories: the pioneer and the follower. Pioneers enter new, untested markets and blaze potentially lucrative paths for similar retailers. Followers, on the other hand, pay close attention to these activities and demand that other like-minded retailers occupy nearby mall space before agreeing to a lease. In 94

either case, it’s the aggressively penned leases that determine how much the retailer pays per square foot, whether MD must pay for and construct the storefront and what neighboring retailers they can assure tenancy. Bargaining power hardly seems balanced.

$$ “The model can’t change.”

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MANY OF THE REDEVELOPMENT PLANS WE HAVE SEEN CALL FOR THE ABANDONMENTS OF THE TYPICAL “ANCHOR” TO BE REPLACED NOW BY SIGNATURE EATERIES. restaurant failure rate

year 1

year 2

year 3

57% 61% 70% 2007 Ohio State University study

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SCENARIO

RETHINK THE MODEL 97

11th Street 11th Street 11th Street

Big K-mart

10th Street

9th Street

Big K-mart

problem analogy

The Great Divide

Between two ends of one property in particular, a Kmart divides the pedestrian space. This makes it impossible to walk from one end to the other without traveling through the store or taking a different level. While such a proposition must be attractive to the retailer, we 98

couldn’t see this as terribly beneficial to the property at large (or smaller retailers at either end). Where anchors are traditionall placed on the outskirts of a property or in such a way that the shopper can enter or traverse the mall’s length without necessarily entering an

anchor tenant’s space, this anchor is splitting the mall. A mall divided cannot stand.

SCENARIO

BRIDGE THE GAP Taking this divide literally, the group observed distinct factions within the home office: employees appeared to have aligned themselves with one of the two presidents (kings), each with his own personality, business style and srengths. If PREIT could imagine unification and collaboration between the two; produce new and unique opportunities; rally previouslyopposed departments and get everyone involved in important decisions, big things could happen.

The mall stood to benefit.

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FORUMS TO TACKLE THESE ISSUES

SCENARIO

SCENARIO

SCENARIO

SCENARIO

DEFINE REFINE YOUR YOURSELVES SPACE TEAR DOWN SILOS SCENARIO

MALL DIAGNOSIS SCENARIO

RETHINK THE BRIDGE THE MODEL GAP

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chapter VIII

REFLECTIONS

“It’s hard to applaud after getting slapped in the face.”

- the client

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Everything that led up to the big reveal at our final home office presentation could be distilled into these problem scenarios and could be resolved, we hoped, in one or more of a series of forums hosted at UArts. They provide an opportunity for isolated departments and their constituents to step outside their silos. We hardly imagined this kind of “recess” would magically knock down these walls or eliminate the silos, however coming together for the shared activity is a powerful first step. Members see each other, they speak, they bounce ideas off each other and they ask questions of themselves. It would be the client’s responsibility to chose which of the proposed scenarios they wanted to approach.

Collaboration is difficult, even in the best environments and with the most open lines of communication.

Consequently, the group recognized the

need to underscore just how opaque MD’s collaborative process appears.

The recess would serve not only as an experimental proving grounds for project suggestions but also a figurative mirror: if MD can reflect on what it sees between its actors, the group can work to improve daily operations. Those small scale improvements would lead to beter execution of major deals (and hopefully fewer Melting Pot scenarios).

In order to be most effective, the brief forum would require that participants work in non-standard teams - people who wouldn’t ordinarily work or speak together. The fresh perspective this provides is one from within. Rather than four art school students suggesting interventions, the group facilitates the birth of new ideas from within the organization. By allowing MD to reflexively innovate, they become empowered to promote positive changes

in the future. Current projects see new vigor and future projects are approached with fresh perspective.

The entire project, whether thought of as mall futures, studies in organizational behavior or exercises in interviewing techniques, documentation and market research was a human project. It hinged on personalities, egos, incredible talent, cunning and skill. We know far more today about real estate than we did before the project began but still infinitely less than the helpful team at MD does. What we are sure of, however, is that our methodology and application of design thinking combined with perspectives informed by our discipline are incalculably valuable to organizations like MD and others. We each hope that the relationships we established over the course of our Fall, 2010 semester will continue to grow and that the learning carries on. $$ 105

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