GGP hits the sweet spot in reviving US mall industry
A fledgling San Francisco confectionery retailer is poised to become a beacon in the struggling US mall industry after signing a deal to open 30 new stores with GGP Inc.
Thirty stores is not many by US standards where chains usually count their networks by the thousand. But Lolli & Pops currently has just 38 stores, so it is set to nearly double in size with a single landlord.
But the story is really about GGP, which has openly grasped the challenge of the dying US mall industry, reshaping its tenancy strategy and adopting a whole new approach to positioning its properties as destinations for more than just shopping.
Earlier this week the company said it would host a brand new chain developed by fast-fashion retailer Forever 21, called Riley Rose boutiques.
Targeting millennials, Riley Rose sells accessories, cosmetics and home goods. While few details have emerged as yet, Forever 21 describes the new store as “experiential”.
That’s just the sort of concept GGP CEO Sandeep Lakhmi Mathrani wants in his malls, along with grocery stores (not always a given in the US), fitness centres, cinemas and innovative entertainment venues.
“Customers have come to expect lifestyle options at their regional shopping centres. “Millennials have embraced the Forever 21 brand, and GGP is thrilled with the introduction of Riley Rose. We know our shoppers will enjoy it,” he said.
Despite the relentlessly growing retail market share of online shopping – at the expense of suburban malls – Mathrani believes traditional retail has a future.
“Brick-and-mortar is the primary channel to create meaningful, emotional connections with consumers, and the partnership illustrates its essential role in the retail industry,” he said when announcing the Lolli & Pops deal.
“Our regional shopping centers are the heartbeat of the community and curation is a fundamental strategy. We’ve embraced working with Lolli & Pops because their philosophy coincides with our mission to provide a fun environment of search and delight.”
GGP has 127 retail properties in 40 states. Nearly 56 per cent of the US population lives within an hour of one of its malls.
The developer says it creates an “optimal customer experience” by curating each of its properties with a fusion of traditional retailers, e-commerce tenants expanding into brick and mortar, dining and entertainment.
Sid Gupta, CEO of Lolli & Pops, says the true power of brick-and-mortar retail is the ability to enrich products with emotional and physical context.
“At Lolli & Pops, our elevated in-store experience has been a key factor to our rapid growth, and we are excited to partner with GGP and play an integral role in their efforts to reinvent today’s shopping centers.”
Launched in San Francisco in 2012, Lolli & Pops has built a loyal customer base (just take a look at the comments on its Facebook page). It focuses on on high-quality, innovative sweets from around the world, and what it terms a “one-of-a-kind ambiance with exceptional service and hospitality”.
“Each store is designed to immerse customers in the emotional potential of the products they purvey,” says Gupta.
The company even measures its success with “happiness counts” – how many people have been delighted on a daily basis.