Spring 2008 Cool, Classy and Quirky Carts and Kiosks
Innovative Specialty Leasing Programs
Unique.” “Desirable.” These are the adjectives Deborah S. Kravitz uses to describe some of the most innovative specialty leasing programs being launched today featuring some of the most unusual cart and kiosks to hit the common area in some time.
As a partner at Provenzano Resources, Inc., a company with offices in Los Angeles and San Diego that creates, leases and manages common area programs, Kravitz specializes in creating unique programs that often include cutting-edge cart and kiosk designs. She works with some of the best cart and kiosk manufacturers in the business to develop retail units that make both the retailers and the center itself look attractive and intriguing. But, she cautions, the best carts and kiosks don’t just attract eyeballs—they “add value to the common area.”
From a leasing perspective, a program that features innovative cart and kiosk designs makes the common area retail program “feel more substantial,” Kravitz says. This, in turn, attracts a higher level of merchant and “encourages all retailers in the program to be more careful in how they merchandise.” Better merchandising not only leads to better sales but also an attractive, visually interesting common area program that “enhances the credibility of every specialty retailer” in the center.
“The retailers and center management both gain credibility and visibility,” Kravitz adds. “And shoppers are treated to a more interesting, more varied and more exciting shopping experience. That can give the center and its retailers a big edge over the competition.”
Custom carts reach new heights
The secret behind the success of these programs can largely be attributed to one phrase: custom-made.
Take for example the new retail units at Tempe Marketplace, a 1.3 million square foot, open-air center in Tempe, AZ, that opened last September. The specialty retail program features three unusual cart designs known as the Pearl, the Oval and the Airstream. With a curved roofline and curved display cases the Pearl has a sleek, modern look. The Oval looks vaguely like a spaceship. The most unique of the three, the Airstream, conjures images of the silver RVs popular in the 50′s (complete with a back hatch that lifts up).
The units were designed to match the center’s retro-modern look, says Kravitz, who launched Tempe’s common area program in cooperation with center management, Vestar Management, based in Phoenix, AZ, and architectural design firm egRetail, (formerly TL Horton Design), of Grapevine, TX, which designed and built the carts.
Not only do the different units create visual excitement for the center, but they also lend themselves to particular uses, says Kravitz. For instance, the Pearl is perfect for a demo product because retailers can “stand in the confines of the unit without stepping outside of their footprints,” she says. The Oval is elegant and lends itself nicely to jewelry sales, although it can effectively showcase a range of products. The Airstream can accommodate a number of lines, but tech products really stand out on this unit. The new mobile phone concept Helio was a great fit for one of the Airstreams, “because their customer is trendy and we knew the unit would attract their attention,” says Kravitz.
Working with the same developer and cart manufacturer, Kravitz also launched an unusual program at The District at Tustin Legacy, a one-million-square-foot, open-air lifestyle center in Tustin, CA. The property opened last year featuring 10 carts with river-rock exterior accents. The rock treatment seamlessly integrates with the façades of many permanent tenants as well as the flooring throughout the center. The end result: the carts “fit beautifully within the center,” Kravitz says.
The new units “look like small buildings,” she adds, with accents that echo those found in larger retail stores—additional touches that give the retailer a more substantial presence. Strategically placed accent lighting, just right for operating outdoor at night, casts a warm glow that seems to complement every product line, and heating elements keep retailers and shoppers comfortable as night falls.
In open-air centers, “A lot of business is done after dark, because of the entertainment amenities typically found in today’s lifestyle centers,” Kravitz explains. “When you’re a retailer in an open-air center, lighting and heating elements are critical.”
It’s natural then, that these extraordinary units not only attract shoppers’ attention but also bring more sophisticated and unique retailers to the center, Kravitz says. “One Tustin Legacy specialty retailer features just about every kind of flask imaginable. There’s another cart that offers unique jewelry from Israel—all handmade. Those two tenants are at Tustin Legacy because Vestar had the foresight to put resources into developing a fresh new program and egRetail had the vision and skills to design great-looking, great-functioning common area units.”
Another Provenzano Resources program is set to launch soon at The Shoppes at Chino Hills, a 400,000 square foot, open-air lifestyle center in Chino Hills, CA, being developed by Opus West Corp., based in Phoenix, AZ. The center is scheduled to open in May.
Like Vestar did at Tustin Legacy, Opus West chose to mix it up a bit at Chino Hills, rather than have all their units look exactly the same. All six carts will have the same 5′ by 8′ base and overall aesthetic appearance—a rectangular shape, etched glass displays and extended rooflines—but half will have an oval roof and glass corner displays that open to create additional merchandising space. Every unit has night lighting and heat.
Created by Bella Group in Coppell, TX, the units “look even bigger because of extended rooflines, which also give them the appearance of permanent structures,” Kravitz says. Because of their size and permanent look, tenants being considered include home furnishings and décor retailers.
Custom-designs might make for a costlier cart on the front end, but over the long term they add revenue, Kravitz says, and she’s not just talking about sales figures. “From a leasing angle, if a tenant leaves the center I can get another tenant in the unit much more quickly than if they had to build their own displays, as many do for traditional common area units. Creating displays can take 30 days, and I’d rather have a tenant open and selling for those 30 days.”
Of course, units designed for open-air centers are more costly than those made for enclosed centers, no matter what the design, says Kravitz. Outdoor units need to have hard roofs, hard closure systems, night lighting, heating, and they need to stand up to the elements. “The average exterior units that we work with cost between $20,000 and $40,000,” says Kravitz. “But in the end, it’s worth every penny because the retailers are more visible and the entire program is more enticing to shoppers.”
LMUs make their mark
Moving from carts to kiosks, several Luxury Merchandising Units, or LMUs, are attracting a lot of attention—and luring big-brand luxury tenants—to Time Warner Center’s The Shops at Columbus Circle in the heart of Manhattan. The 347,000 square foot, multilevel enclosed center caters to upscale shoppers and introduced its extra-big walk-in luxe kiosks for the 2006 winter holiday season.
Although the LMU program was intended to be seasonal, the kiosks have become so popular with retailers and shoppers that the center’s general manager, David Froelke thinks the LMUs may soon operate year-round. “Acceptance has been so great, that we’re getting six-month to one-year [lease] requests” from a number of potential tenants, he says.
Plans are also in the works for the possible addition of another unit, a smaller unit, but a use or tenant has not yet been decided. So far, retailers in the LMU program during the last two holiday seasons have included Christi Harris, Carat, Swarovski and Johnny Walker Blue Label, among others.
Swarovski was the first retailer to make the leap from LMU to permanent inline after a successful test last holiday season. LMUs are effective test-marketing vehicles to “see how customers like [the retailer's] products,” before the tenant commits to a larger store or longer lease, Froelke says.
An LMU is “a display case that actually is inhabitable,” explains Anthony Belluschi, president of Belluschi Consulting in Chicago, IL, who designed the kiosks. The Johnnie Walker Blue Label kiosk, for example, includes high-gloss wood veneers and stainless steel accents, attractive backlit graphics, suede couches, tiered glass shelving, quality carpeting and lots of lighting.
There’s no doubt that one of the most exciting features of the LMUs is the fact that shoppers can stroll into the units and chat with company representatives in relative quiet. “You don’t feel like you’re conducting business in the middle of the center, says Froelke. “It’s private.” The kiosks are “perfect” for almost any product that’s “exclusive and requires one-on-one customer contact.”
Creations at Dallas, the Dallas, TX firm that designs and manufactures a variety of retail fixtures and merchandising products including carts and kiosks, built the 10′ by 18′ units. “The radius stainless steel gives [the LMU] a unique, sexy look,” says Alex Goldfarb, regional director of national sales for Creations at Dallas. The units are “completely modular,” Goldfarb adds, explaining that because the units were originally designed to be seasonal, they can be broken down and put back together in three to four days. They’re also very secure, with automatic roll down security gates that “match the elegance of the unit[s],” Goldfarb says.
Gotta spend money to make money
Of course, cutting-edge design and superior construction have a price. Each LMU cost “well over $100,000,” Belluschi says.
How have the units performed when it comes to the bottom line: generating revenue? “Sales have been phenomenal,” Froelke says. “If I annualized [the holiday] sales, they would be $3,000-$4,000 per square foot.”
Those figures don’t apply to Johnny Walker Blue Label, however, which was prohibited by law from selling a single bottle of Blue at their kiosk. Their presence was simply for “brand enhancement,” Froelke says. They wanted to “create excitement about their product.” The LMU did that—and more. (See sidebar, “Branding by LMU” for details.)
Looking back, Froelke is pleased with the way his LMU program has developed and is considering various expansion options for the future. “What we started as an experiment, in two short seasons has caught on,” he adds. “So many retailers are coming to us! I’m delighted by the success.”
Johnnie Walker Blue Label LMU
Johnny Walker Blue Label was an intriguing retailer in the Time Warner LMU program over the 2007 holiday period, for the simple fact that they didn’t sell a single bottle of the Scotch whiskey they’re famous for. “Due to state regulations, we cannot sell bottles at the kiosk,” explains Bill Topf, vice president of Scotch and Irish whiskey for Diageo North America in Norwalk, CT, which imports and distributes the Johnnie Walker brands in the US.
Consumers had to purchase a bottle of Johnny Walker elsewhere and bring it to the LMU to have it engraved to create a special gift or collectible item for themselves, friends or family—at no cost. Fortunately, there are multiple liquor stores within walking distance of the center, which made the engraving service “a very viable proposition for consumers,” Topf says.
Although Johnny Walker didn’t charge for the engraving, and thus generated no sales, the unit paid off in many other ways. “The LMU allowed us to present the brand in a luxury retail environment to drive awareness and visibility for the engraving offering with our target demographic,” says Topf.
The kiosk very effectively conveyed “the luxury and status of Johnnie Walker Blue Label.” Another touch that conveyed the luxe concept: a $28,000 bottle of Johnnie Walker from 1805 on display, “one of only 200 bottles that exist in the world,” Topf says.
Shopper reactions were all the company had hoped for—and beyond. “We had customers walk in and tell us that the Johnnie Walker Blue Label studio was the coolest thing they had ever seen. They were blown away by displays of the limited-edition bottles, which many had read about but never actually seen,” says Topf.
Was the LMU’s reception successful enough to deserve an encore in 2008? “Definitely!” says Topf. He hopes the LMU becomes “a recurring offering that our consumers can look forward to during the holiday season,” compliments of Johnnie Walker Blue.
Bonus Pictures: Swarovski, Tempe and Tustin
Creations at Dallas
c/o Hunter Public Relations
Provenzano Resources, Inc.
The District at Tustin Legacy
The Shoppes at Chino Hills
The Shops at Columbus Circle
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