Magazine article Journal of Property Management

Retail Kiosks: Small Business, Big Impact: Specialty Retailers Have Transformed into Legitimate Tenants That Add Style and Revenue to Shopping Centers across the Country

Magazine article Journal of Property Management

Retail Kiosks: Small Business, Big Impact: Specialty Retailers Have Transformed into Legitimate Tenants That Add Style and Revenue to Shopping Centers across the Country

Article excerpt

IN THE LATE 1980s, few consumers knew about specialty retail kiosks and carts. These unorthodox retailers were just starting to make their way into shopping centers. Now, 25-plus years later, it's almost impossible to walk through a mall without coming across a cart or kiosk selling cell phone cases, sunglasses, seasonal trinkets and much more.

Today, specialty retail is an $8 billion dollar industry that has made a major impact on shopping centers across the country. Located in common areas of large malls and centers, carts and kiosks offer local entrepreneurs and national retailers an opportunity to showcase and sell their products in prime, high-traffic locations at a fraction of the cost of a an inline store.

"[Kiosks] are incubators for many small businesses," said Chuck Breidenbach, Managing Director of Mountain Development Corp. (MDC) Retail Properties Group, a real estate firm that offers management, leasing, promotion, finance and repositioning services to enclosed shopping centers throughout the U.S.

At the same time, mall and shopping center owners and managers have much to gain from specialty retailers. They allow shopping centers to offer a broader product mix, which can, ultimately, draw more people to their centers. Equally--if not more--important, specialty retailers generate revenue for malls without the cost of expansion.

"[Carts and kiosks] let retailers test out sales and products; likewise, they let mall owners and developers determine if these retailers are good tenants and good fits for their centers," said Patricia Norins, Vice President of Specialty Programs for the International Council of Shopping Centers (ICSC).

A MATURING INDUSTRY

When specialty retailers first started popping up in malls and shopping centers in the '80s, they were often in one day and out the next. Their overall design and presence within centers were forgettable.

"The displays were crude and simple; they would use skirted banquet tables to display their products," said Dan Mancuso, Vice President of Specialty Leasing for the Cafaro Company, which owns and operates 12 enclosed malls and 40 open-air centers in 11 states.

Through the years, though, specialty retailers have matured. Starting with wagon wheel push-carts, specialty retailers have steadily stepped up their game. Today, the most common specialty retail displays are retail merchandising units (RMUs), which are typically provided by the mall and included with the cost of the rent. RMUs have a number of fixtures and shelves on them, allowing RMU operators to display a wide range of merchandise. Kiosks are another option, offering retailers more space for their products.

"Lately, we have been seeing a trend toward kiosks over RMUs," said Norins. "Retailers are recognizing that renting more space often equates to higher sales."

As displays have become more sophisticated, so has the approval process for setting up shop. Most mall owners and managers require RMU and kiosk operators to submit drawings and detailed plans for their kiosk or RMU before they move into the space.

"These units are very visible to the public, so presentation is key," said Breidenbach. "As a manager, you should walk the property on a daily basis to keep the displays in check and ensure that the quality remains at the level you want it to appeal to customers in your center."

RECOGNIZING THE REWARDS

For a mall to be successful, it needs a mix of retailers--a strategic blend of national chains, regional stores and local retailers. So where do specialty retailers fit into the mix? RMUs and kiosks typically bring in the local retailers. "Local retailers in your RMUs and kiosks bring more flavor to your mall," said Mancuso. "They offer unique products and services that you don't get everywhere else."

At the same time, RMUs allow mall owners and managers to try out something new, with little risk. …

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