Hamilton Marketplace: The Future of Shopping

Mercer Business, May 01, 2006 by Roberts, Russell

Once they were the kings of all they surveyed ... but no more. That doleful line could apply to a lot of things dinosaurs, for example, or the British Empire. Both of those were once without equal on earth. But things change.

There are a lot of things that were once all-Powerful, but are not any longer. But the first line of this story has nothing to do with either dinosaurs or empires.

Rather, it has to do with shopping malls ... enclosed indoor shopping malls, to be more precise. They are rapidly being replaced by "power centers," such as the Hamilton Marketplace on Route 130, or "lifestyle centers". Marketplace is a prime example of the modern power center shopping complex - a sprawling mixture of big box retailers, lots of smaller shops, and plenty of restaurants serving everything from sit-down meals to fast food to gourmet ice cream. Next time you go to Hamilton Marketplace, remember that it represents both the present and future face of shopping.

Inside Out

Shopping and shopper's habits have undergone a rapid evolution over the past several decades, but perhaps nothing was more important than what happened in a Minneapolis suburb in the autumn of 1956.

That was when the shopping mall called Southdale Center opened. Southdale is considered the first fully enclosed, climate controlled shopping mall with a twolevel design in the United States. It contained central air conditioning and heating, a large garden courtyard, a theater, orchestra, goldfish pond, aviary, and hanging plants. Austrian-born architect Victor Gruen, who wanted to recreate a part of Vienna known as The Plaza in America, designed the Southdale Center.

Gruen's vision became the blueprint for indoor shopping malls all across America. In New Jersey, that vision became reality in October 1961, when the Cherry Hill Mall in Camden County opened. Cherry Hill was the first enclosed shopping center east of the Mississippi River. People came from hundreds of miles away to marvel at it and enjoy the convenience of being able to shop no matter what the weather.

The 1970s and early 1980s were golden ages for enclosed malls. Hundreds were built all across the country, heralded as the "new era" in shopping. But as the 80s melted into the 1990s the American consumer's infatuation with enclosed malls began to wane.

With the advent of the 21st century that tendency has turned into a full-scale retreat. According to the International Council of Shopping Centers (ICSC), just five enclosed malls were built in the United States in 2005. This year, just one is planned.

The ICSC numbers 47,000 shopping centers in the United States, of which 1,104 are enclosed malls. Between 2002 and 2003 36 indoor malls "demalled" were converted into open air shopping centers. In New Jersey, the formerly enclosed Seaview Square mail in Ocean Township, now an open-air retail complex is an example of demalling. Some analysts have predicted that as many as one-third of enclosed malls will be transformed or terminated.

The numbers keep getting worse for indoor malls. According to consultants Consumer Growth Partners, in 2002 just 19% of U.S. retail purchases were made in malls. That is down from a figure of 38% in 1995. The ICSC reports that lifestyle centers average $298 in sales per square foot versus $242 for traditional malls.

But the biggest notice that a new retail day is dawning is signaled by what's happening at the place it all began Cherry Hill. There, mall owners Pennsylvania Real Estate Trust (PRET) have announced plans to tear down the soon-to-be vacant Strawbridge's department/anchor store and replace it with a so-called "Main Street" mixture of high-end retail stores and restaurants with outside storefronts. By totally transforming one of the mall's signature stores instead of trying to rent a large, empty building, PRET is indicating that they understand today's retail dynamic and trying not to let Cherry Hill Mall suffer the same fate as nearby Echelon Mall, which has two empty department stores and a vacancy rate of 50%.

So why is Hamilton Marketplace the new face of shopping?

The Future is Now

Numerous factors have combined to change 'the retail landscape, but perhaps the most important has to do with shopping itself.

"Shopping is no longer a leisure activity," said Ted Kraus, retail analyst and head of TKO Real Estate Advisory Group in Hamilton Township. Twenty years ago, stay-at-homer Moms would bundle the kids into a stroller and spend time walking the mall, windowshopping, getting ice cream, possibly meeting friends, and letting the kids play in an amusement center.

But no longer. Today both partners in a relationship work, and they have no time to casually saunter through a mall. Shopping has become a time-sensitive activity. The typical consumer doesn't want to spend time parking in a parking garage and walking throughout an entire mall to get to the store they want. Today it's get in, get what you need, and get out. Fast.

"There's no time to devote to shopping now," said Kraus. Shopping has become a necessary part of life, and time must be proportioned out of a couple's increasingly frantic schedule to accommodate it. "Shopping [now) makes a bigger impact [on people's daily lives]," said Kraus. "It takes a bigger commitment [on the part of the consumer]."