High-quality malls and lifestyle centers are best positioned to capitalize on the shift toward ... generation most, driv
Good news for premium malls, lifestyle centers High-quality malls and lifestyle centers are best positioned to capitalize on the shift toward experience-based spending. JUNE 10, 2016 | BY MARIANNE WILSON
High-quality malls and lifestyle centers are best positioned to capitalize on the shift toward experience-based spending. That’s according to a new study by the research arm of MetLife Investment Management (MIM), which finds that millennials’ preference for acquiring experiences and memories over material goods will play a significant role in determining which retail formats will outperform in the future. The Age of Experience-Based Retail report cites data from the National Council of Real Estate Investment Fiduciaries which contends that the benefits of experienced-based formats are already being felt, with malls and lifestyle centers achieving annual income growth more than double that of other retail properties over the last seven years. • A retail location’s format and tenant mix remain among the most important factors in its success. Well managed retailers with unique product offerings, high levels of service and quick delivery times will appeal to the millennial generation most, driving superior performance at the best centers. • The attractiveness of high-quality malls and lifestyle centers is further enhanced by their defensive positioning against e-commerce as the experienced-based nature of the goods and services their tenants offer are extremely difficult to replicate online. • An analysis of expenditure data from the U.S. Bureau of Labor Statistics shows that Millennials spend almost 15% more of their disposable income on experiences than generations past. As millennials grow older and more financially stable their spending power will rise, likely increasing the impact of this trend on the retail landscape.
