Malls & strips: what’s the difference?

(Image from Fleskw - via The Conversation)

Whether you like them or not, malls have been pretty successful in capturing a sizeable share of the retail dollar in Australia since the first ones opened in 1957 at Chermside in Brisbane and Top Ryde in Sydney (Chadstone opened in Melbourne in 1960). Much of that success historically came at the expense of strip shopping centres, so it’s worth unpicking what it is about malls that attracts shoppers.

Both retail forms have their advantages and disadvantages from a consumer’s and an urbanist’s point of view. A week ago I took a general look at malls (What’s so bad about malls?) but what I want to look at here is a singular advantage that regional malls have over regional strip shopping centres: unified management. In one sense that’s a trite observation – it’s hard to imagine that a collection of small businesses could’ve gotten together in the 1950s to build collectively something as large as suburban Chadstone in Melbourne, currently Australia’s largest mall.

The Myer Emporium, however, had no such coordination problems. It was able to ignore the objective of the MMBW’s 1954 Melbourne and Metropolitan Planning Scheme to confine development to activity centres served by public transport. Ken Myer constructed instead a massive new retail centre on a Malvern orchard, well away from the nearest rail station.

Let me be clear that this is not a post about which is ‘better or ‘worse’ – it’s about understanding the differences between malls and strips and, in particular, why they’re different. I’ve chosen to look at management arrangements because I think that’s a key difference and space is limited, but it’s not the only one. I’ll try and look at other differences another time.

The real power of the management advantage enjoyed by malls is in operations. A stand-alone regional mall like Chadstone or Northland has a single landlord and manager who coordinates a wide range of key commercial variables, from infrastructure to the overall retail offer of the mall.

I think of malls as being a bit like clubs. The welfare of each retailer depends not only on his own performance but on that of all the others — they generate business for each other. That’s true of strips too, but in malls the tenants formally cede a considerable measure of independence to the centre manager in return for maximising the benefits of the mutual inter-dependency of the parties. The manager’s role is to maximise the benefit for all tenants and, consequently, for herself. If she doesn’t also satisfy shoppers then both she and the retailers will suffer.

One of the most important qualities of any regional centre for shoppers, whether it’s a mall or a large strip centre, is the range and choice of products and services on offer. The mall’s advantage is it is ‘designed’ or ‘engineered’ to maximise the retail experience.  Managers are able to optimise a range of critical variables important to customers, like the mix of shops/tenants, the mix of merchandise value, and the mix of floorspace allocated to different retail segments. Considerable research effort is devoted to the subtleties and nuances of what sells and what doesn’t.

The centre manager can create a unified marketing image. She can also engineer a defined ‘experience’ or ‘atmosphere’ comprised of the retail offer, associated services like cinema, and the design of the physical environment. She can control the level and management of car parking, often providing it for ‘free’. Moreover she can provide simple things like clean, safe and working public toilets; tenant directories; staffed centre management offices; and security services.

The management advantage also extends to the quality of staff. Malls are largely populated by national franchises that can afford to put effort into choosing and training staff and supporting them with sophisticated management systems, inventory control and procedures manuals.

All of these activities are much more difficult for a strip shopping centre. Strips are composed of multiple landlords and multiple tenants. Individuals within each of these groups may have different priorities. Further, circulation and parking spaces are administered by a range of public agencies, such as local government and traffic authorities. In many centres there are residential and other non-retail occupants in the centre with agendas which might be inconsistent with the priorities of businesses and organisations that serve the public directly.

This diversity of purpose makes it more difficult to get any sort of sustained, unified action. Publicly funded programs like Mainstreet have endeavoured to create some semblance of joint action by retailers and other players but the results have been small scale, short-lived and largely confined to ‘beautification’ projects. Even where they work, they seldom go to the core commercial issues. Read the rest of this entry »