Lifestyle Choices

Depending on whom you talk to, a lifestyle center is either the latest shopping-center format or a new take on an old approach. To some, a lifestyle center is a community center; to others, just a strip mall. Some lifestyle centers have as little as 150,000 s/f; others boast more than 500,000. Some are designed for anchor tenants; some aren’t. Some incorporate office and residential space; most don’t.

“The definition of lifestyle centers is kind of a gray area,” says Tama Shor, publisher of the Directory of Major Malls. But despite the variant definitions, everyone agrees on some elements: outdoor venue, upscale image, caters to an upper-income clientele, and designed as a destination for shopping, dining and entertainment.

The International Council of Shopping Centers (ICSC) came up with a formal definition several years ago to clear up the confusion: In addition to its outdoor location and upscale focus, a lifestyle center is also differentiated by “its role as a multi-purpose leisure-time destination [that features] restaurants, entertainment, and design ambience and amenities such as fountains and street furniture that are conducive to casual browsing.”

Shor has seen the number of lifestyle centers listed in the Directory of Major Malls start to climb in the last four or five years. She estimates that approximately 200 are listed in the current directory. “We’re definitely seeing an increase in the number of future projects we’re listing,” she says. And in early 2004, the ICSC forecast that over the next few years, the gross leasable area (GLA) of lifestyle centers would double from what was then around 33 million s/f.

Terry McEwen, president of Poag & McEwen (MemphisTN), a leading developer of lifestyle centers nationwide and the firm that coined the name “lifestyle center” in the 1980s, echoes those estimates. “Growth has picked up exponentially recently,” he says. Development of lifestyle centers moved more slowly during the 1980s and ’90s because retailers and lenders were skeptical, he says. But, clearly, that skepticism is gone. “Now [the centers] have proven they’re even more successful than malls.”

Lifestyle centers may be one of the hottest shopping concepts around, but it’s not exactly a new idea, says Tom Miles, general manager of The Grove center in Los Angeles. Miles explains that back in the 1950s, what we now call lifestyle centers were called “shopping centers,” then “outdoor shopping destinations.” Then developers took shopping indoors—the enclosed malls of the ’70s. Now they’re moving back to outdoor shopping environments and calling them lifestyle centers. “Developers are giving people what they don’t have,” he says.

What shoppers want

In keeping with societal and lifestyle trends, boomers and older Gen Xers want out of suburban sprawl. And central to that is the commercial heart of town: “the village,” “the avenue,” “town” or “downtown”—whatever it was called where they lived back in the day. What consumers also want and don’t have, apparently, is enough convenient shopping. Proof of this emerged in a 2002 shopper-intercept study funded by ICSC and conducted at five lifestyle centers across the US. What the researchers learned was that visitors to lifestyle centers spent less time at these centers (average duration: 57 minutes) than they did at malls (78 minutes). But shoppers spent at a rate of $84/hour at lifestyle centers vs. $57.70/hour at regional centers. The study’s conclusion: Lifestyle center shoppers are “more purpose-driven” than mall shoppers are. That is, they go to the local lifestyle center with a particular need in mind. And judging from the spending, their needs are being met.

Part of the reason consumers may be spending more is that they appreciate the overall atmosphere these centers provide as a shopping environment. In the ICSC study, 65 percent rated the lifestyle center they were visiting as better than their local mall on this score. They also rated the lifestyle center high on the convenience of parking, the convenience of the center’s location, and their feeling of safety and security while there. On the other hand, they rated lifestyle centers roughly the same as malls on quality of merchandise, variety of merchandise, and price for the quality offered. And that makes sense, since lifestyle centers aim to appeal to shoppers who like upscale specialty stores rather than big-box retailers and department stores

SpecialtyRetail