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.

Critical commercial variables like the mix of tenants, merchandise value, floorspace and management skills of retailers simply aren’t optimised, on average, to the same extent as they are in the mall. Local government has a coordination role on infrastructure issues, but it may have other priorities or be unresponsive to the commercial implications of planning and investment decisions. Retailers who supply parking at their own cost and have to deal with ‘crowding out’ by customers of other shops (and in some cases even by commuters) may not always get a satisfactory hearing.

Nevertheless, the unified management model has its weaknesses – it can be rigid and slow to adapt to external changes. The decentralised decision-making of the strip can be more flexible and innovative. It’s possible that some of the well-known inner city ‘lifestyle’ strips simply wouldn’t have happened in their present form, or might at least have evolved more slowly, if they had been subject to the sort of unified management model typical of malls.

Malls have tended to follow a common model wherever they’re located (the common criticism that they’re all the same) whereas many strips have evolved into more specialised forms, particularly for food and dining (although in some cases specialisation has been at the expense of the needs of local residents e.g. Brunswick Street).

Let me reiterate that I’m taking an agnostic view. Both forms have an important role in our cities and, internet purchasing notwithstanding, are likely to be around for some time yet. Malls are the junior partner but it shouldn’t be forgotten that Chadstone is 51 years old and Northland is 45 years old. Go back that far in time and many of the inner city strips that are fashionable now were very different to what they are today.

BOOK GIVEAWAYfollow this link to be in the running for one of two copies of Jenny Sinclair’sWhen we think about Melbourne. Entries close midday on Saturday 3rd September.

9 Comments on “Malls & strips: what’s the difference?”

    • Alan Davies says:

      Thanks Lynne, great bit of historical colour. Hadn’t realised they constructed the Lonsdale St building at the same time. While it looks obvious in hindsight, there would’ve been considerable risk attached to constructing an entirely car-dependent mall in the suburbs in the late 50s because public transport was still a big mode. My understanding is Myer sought an in-centre location to begin with but land assembly was just too hard.

  1. Ah yes, centralised management. It’s amazing what it can do…

    I think of centrally managed public transport as being a bit like a club. The patronage of each mode depends not only on his own performance but on that of all the others — they generate business for each other. That’s true competition based models too, but in a centralised model the operators 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 operators and, consequently, for the network as a whole. If she doesn’t also satisfy the majority of passengers then both she and the operators will suffer.

    Amazing how well an argument like this can be adapted to virtually any argument for improving governance.

    Sorry to be cheeky…

  2. Oz says:

    For a few of us Op-shops are the icing on the cake of places to spend money. When there are Op-shops in a major mall it will be an indicator that providing for all the cross sections of consumer market segments that exist are in balance. There is a need for some sections of the retail sector to provide for individualism. Currently alternative experiences are too often only to be found in decaying shopping strips where the shop owner or people actually live above the shops.

    • Brent Palmer says:

      “… Where the shop owner or people actually live above the shops”

      You make that sound like a bad thing! 🙂

      • RED says:

        I lived above a shop in a strip for thirteen years, it was a fantastic place to live! Safe, lively, close to everything … perfect for a non-car owner.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s