Are malls within malls the future of retail?
A unique retail concept involving the creation of a mini-mall within a larger shopping centre is gearing up to expand to other venues after its successful debut at the West Edmonton Mall.
The Retail as a Service (RAAS) concept was launched at West Edmonton Mall last fall in just over 5,000 square feet with a minimum of 20 local retailers to as high as 30.
Mark Ghermezian, RAAS founder and CEO, and part of the family that developed the West Edmonton Mall and other big international shopping centres, said the concept was introduced to help emerging and local brands that started online.
“We wanted to create that sense of community and relevance in a bricks and mortar experience in our environment and bringing them all together under one roof,” said Ghermezian, adding it’s a place where those stores can open a physical location but also be supported by a community the mall is creating.
“We’re still learning a lot. We’re introducing this new concept that never really existed before . . . It’s been successful but there’s still a lot that we need to learn and refine and figure out and understand.”
Another similar RAAS concept opened in another Ghermezian family shopping centre, Mall of America in Minneapolis, in November.
Michael Kehoe, an Alberta-based retail specialist with Fairfield Commercial Real Estate in Calgary, said the RAAS project is a great incubator for startup retailer entrepreneurs and established retailer brands who wish to pop-up to test drive specific merchandise lines in a new market.
“The concept is transferable to other shopping centres or non-retail venues. RAAS is a throwback to the great Souks of the Middle East that were the world’s first shopping centres, some dating back over 1,500 years,” said Kehoe.
“Many retailers who get their start in locations such as the RAAS where store sizes are small, rents are often affordable and lease terms likely flexible go on to lease bricks and mortar stores and become long-term shopping centre tenants.”
Kehoe is a commercial real estate professional with over 40 years of experience. He has worked for many years as a mall manager, marketing director and retail leasing executive. He is an Ambassador for the New York based International Council of Shopping Centres where he has been a member since 1982.
Besides the West Edmonton Mall and the Mall of America, the Ghermezian family also owns American Dream in New Jersey and American Dream in Miami.
Not Only For Malls
Mark Ghermezian said the RAAS concept could grow to other locations beyond traditional enclosed shopping centres including street level locations.
“We wanted to create a platform that empowered and gave relevance to emerging and local stores. We really felt that there is a whole market of so much talent and so much good products out there and they’re prohibited today from opening up a brick and mortar store,” said Ghermezian in an interview for Retail Insider.
“The plan is to democratize retail and create a platform that really allows these brands to be successful in a brick and mortar experience. The plan is to do this globally and create a community around the world of the best local and emerging and direct to consumer brands.
“We have a five-year plan where we do this globally and we’ve been testing the last five months in the two markets we’ve been in and so far so good. We’ve been fortunate enough to work with a lot of the top brands in the cities that we’re in.”