NORWALK, Conn. — GGP is looking to start construction on The SoNo collection this spring or summer, GGP Sandeep Mathrani said this week, describing the mall as having a strong “buy online pick-up in-store” component.
Mathrani made the comments Jan. 31 during a GGP’s Fourth Quarter 2016 Earnings Conference Call, according to SeekAlpha.com.
The SoNo Collection is about 50 percent pre-leased, Mathrani said, going on to explain that the mall’s retailers need to “have enough backroom to be a point of distribution,” that there is enough “pick-up areas.”
Mathrani said that’s “an omni-channel world” perspective.
Omni-channel is a sales approach the “seeks to provide the customer with a seamless shopping experience whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks and mortar store,” Margaret Rouse writes on SearchCIO.com.
As an example, “the customer service representative in the store will be able to immediately reference the customer’s previous purchases and preferences just as easily as the customer service representative on the phone can or the customer service webchat representative can,” Rouse writes.
The GGP execs painted a positive picture of the company’s finances. Even though there’s been a national wave of bankruptcies since 2014, GGP investors didn’t feel a blip, Mathrani said.
GGP has installed traffic counters at most of its centers and has not seen a decline, Mathrani said, adding, “In fact, the high traffic causes serious parking issues.”
“Overall traffic to the centers is up, the number of stores visited during each visit may be lower,” he said. “The conversion rates are higher. The consumer — they begin their shopping journey on their mobile device, but they’re closing the purchase in the physical store.”
Asked about the enormous pressure from very competitive online marketers, Mathrani said there’s a “flight to quality.”
Retailers are seeing their biggest sales increases in better assets, he said.
“The consolidation of tenants into high quality retail assets is occurring across the country. Tenants are agnostic at the property type, but they have a strong desire to be in the retail real-estate,” Mathrani said.
There’s “a shift into fast fashion,” and 2016 was “a fantastic year for luxury,” he said.
“The term ‘fast fashion’ refers to a phenomenon in the fashion industry whereby production processes are expedited in order to get new trends to the market as quickly and cheaply as possible. As a result of this trend, the tradition of introducing new fashion lines on a seasonal basis is being challenged. Today, it is not uncommon for fast-fashion retailers to introduce new products multiple times in a single week,” Investopedia states.
“What I think is the most important part, which is completely overlooked, is the reach of regional shopping center is 5 miles to 10 miles, versus the community center, which is 2 miles,” Mathrani said. “They give them access to more clients that make the single visit. It’s evidenced by what we’ve accomplished. We’ve signed six supermarket leases in the last few months.”
Mathrani said, “Given there is essentially no new supplier of retail space in the horizon and the U.S. population is expected to grow at almost 1%, annually high quality assets would continue to take market share, reinforcing their position as the destination in their trade areas, this is where we had staked our strategy.”
Read the entire transcript here.