Sharing an article from the Wall Street Journal
Decades ago, of course, most tenants of neighborhood shopping centers were locally owned small businesses. But competition from national brands that sold the same goods or services at lower prices made it challenging for them. Today, the tide is changing again, and Bernstein sees local merchants providing distinctive items and services in ways that appeal to today’s shoppers. “You still have to be price-competitive—and service and selection still matter,” he says. “But local merchants are competing, and I think that’s exciting.”
Some large retailers are even understanding the emerging benefits of having smaller-footprint stores with merchandise curated for a local community’s needs. For example, Target Corp.—which has more than 1,800 stores across the country—has prioritized adding small-format stores to dense urban and suburban neighborhoods, as well as college campuses, says Laurie Mahowald, vice president of real estate for Target.
Melissa Gonzalez, founder and chief executive of The Lionesque Group, which creates pop-up retail experiences, says the revival of locally owned businesses is a “win-win-win situation” for entrepreneurs, national brands and shopping centers.
“There’s a nationwide initiative for malls to rethink space and place-making,” she says. “A lot of that place-making is building community and creating a place of discovery”—which local businesses help achieve.
A locally owned business might open in a shopping center for the exposure, but it also helps the shopping center owners attract other tenants, Gonzalez adds.
“A fresh, imaginative store that’s beautifully designed makes a strong showroom for a mall’s leasing department to sell other spaces,” she says. “It helps create stronger adjacencies for existing tenants. It changes the energy of that floor or wing of the mall when a locally owned retailer has a cult following that they can activate and drive to their location.”