Long a means of securing seasonal tenants in shopping centers, the pop-up shop has only emerged as a standard bearer for retail nodes within the last five years or so—about the same time that economic forecasters began realizing how badly online shopping was undermining conventional bricks-and-mortar retail. And that’s how they work: they fill a void based on an atypical contract, in which the property manager commits a tenant to conditions much briefer than the conventional lease, usually only a couple months, instead multiple years. Lacking any long-term physical presence, the tenant rarely invests in an elaborate identifying sign. The tenant adds little to no interior decoration, potentially uses a cash-only payment method, and replenishes the merchandise on an erratic, as-needed basis. These tenants have no real commitment; they come and go like mushrooms. That’s why they’re pop-ups.
When I first explored the pop-up concept way back in 2009, it was a Halloween store that had filled what then was a recently vacated Circuit City. Even then, I suspected that pop-up tenancy would grow in popularity as American shopping centers suffer a surfeit of leasable space. The country leads the world in retail space per capita, resulting, inevitably, in higher vacancy rates than just about anywhere else, even in the best of times.
And these are not the best of times. Which is why, in 2019, it’s not surprising that even brand-new retail mega-developments are exploring pop-ups, like the District Wharf on the Potomac riverfront that I wrote about just a few weeks ago, whose management seems to have made the a priori assumption that it would need pop-up contracts to keep its storefronts active. And now, the pop-up concept has migrated from our struggling suburban shopping centers to the ones that ostensibly continue to thrive, like this one:
It’s Tysons Corner Center, the 2-million-square-foot super-regional mall in the Virginia suburbs of Washington DC. Department store anchors are Nordstrom, Bloomingdale’s, Lord & Taylor, and Macy’s. 2017 stats indicate that it is the fifth most capitalized mall in the country, with sales per square foot approaching nearly $1,000—nearly triple the median. And it’s part of one of the biggest automobile-oriented commercial hubs in the entire country: not only is a smaller, even more upscale Tysons Galleria located across the street, but this convergence of highways 12.5 miles west of the National Mall features millions of additional apartments, big-box retail, and corporate headquarters. Tysons Corner (these days rebranded as simply “Tysons”) is the original Edge City of Joel Garreau’s titular book discussing the post-modern developmental trend. Though this vague Census Designated Place (CDP) occupies territory within the greater Washington DC metro that would typically make it a quintessential bedroom community, far more people commute to Tysons each day than live there. With the exception of a stop on the DC subway WMATA, it is a car dependent employment node that quintuples in population during the conventional work week.
Thanks to the presence of two proximal malls, the aforementioned Center and Galleria, Tysons gets more than its share of weekend visitors. Or, at the very least, these malls sure packed in the visitors during the mall’s heyday. As of 2019, the ritzy Tysons Corner Galleria (not featured in the photo above) is shy one of its tenants, having lost a Macy’s earlier in the spring. The two remaining luxury department stores, Neiman Marcus and Saks 5th Avenue, no doubt keep the place from floundering, but losing an anchor tenant definitely smarts. Meanwhile, on a sodden, summer Friday evening, the only slightly less ritzy Tysons Corner Center looks like what I just featured earlier:It’s far from packed, and it features an extensive row of partitioned storefronts. Granted, the one in the foreground has “coming soon” all over it. But either people are out enjoying the hot rain or they’re at home on their computers, because they certainly aren’t making their way out to this megamall in huge numbers.
Revisiting that photo, let’s veer away from the vacant storefronts and toward the middle of the hall, with that multicolored cube that probably serves as a seat. It says “BrandBox” on the side.Macerich, owner and manager of Tysons Corner Center, first deployed BrandBox in late 2018 as a means of rotating “digitally-native” retailers back to the time-tested mall setting, so people could experiment and try on the products before purchasing. The Tysons Corner Center website promotes BrandBox as its own thing, with a profile of one of the current tenants (San Francisco summer-attire manufacturer Chubbies), as well as the BrandBox lounge, featuring workshops and other (often ticketed) special events. Each of these smallish companies receives an 11,000-square-foot floor plate. According to the CNBC article, Macerich gives the short-term pop-up tenants at BrandBox a few added deal-sweeteners: it provides fixtures like shelving, foot traffic statistics, inventory tagging, marketing, and even recruiting for staff.
It sounds like a deal too good to be true, so it should come as no surprise that BrandBox, by and large, seems to be working at Tysons Corner Center.
The retail spaces are unequivocally smaller, but unless a customer is attuned to the mall aesthetic and configuration standards, these spaces aren’t sufficiently small to stand out as anomalous from other boutique-oriented in-line tenants.I counted six leasable spaces available at BrandBox; only one was vacant.
And who knows how long that was going to last? Given that pop-up tenants routinely come and go (that’s the whole point), I might have caught it on an off day.
Meanwhile, the BrandBox Lounge (with its logo like something from a graduate design school) is probably a Macerich operation, which would suggest it is not generating revenue for the company…except that those ticketed events could prove highly profitable.
The final analysis generally indicates that BrandBox is a finely wrought solution for a persistently vacant stretch of hallway in a generally high-performing mall—at a time when malls are unquestionably passé. Across the hall from this cluster of stores is a bizarre little art installation, where people can trace patterns with their finger in a mesh of sequins with starkly contrasting obverse colors.
It seemed unusually popular, perhaps because it was a novelty and perhaps because the presence of BrandBox thirty feet away made this entire segment of the mall (leading to a movie theater, food court, and Barnes & Noble) eye-catchingly atypical—and a heck of a lot better than your normal stretch of vacant storefronts.
The stores at BrandBox are likely to prove an enduring solution for the remaining successful mails. Simon Property Group, the world’s largest mall owner, has piloted The Edit—its own variant of rotating pop-ups—at one of its largest and highest-grossing malls. These pop-ups don’t quite pass for microretail; they’re too big, and that concept is probably too unorthodox for something as plain-vanilla as a mall. (Besides, the mall hallway kiosks more than satisfy the demand microtenants might have for mall real estate.) BrandBox is the middle ground between a full-fledged, established inline tenant and the kiosk, endowing a heretofore-virtual enterprise with a tangible incarnation in what has been the most consistently successful retail typology for the last 60 years.
BrandBox works for now. But it is indisputably predicated on compromise on the part of mall management. Short-term leases are not as desirable because they require more work; the act of regularly pursuing new tenants is an onerous transaction cost. And all those freebies are not helping Macerich’s bottom line. I spoke with the cashier at Chubbies, during his one free moment; the store got impressively busy. After offering me a beer (something he offered all adults, because heck, it’s summer, they can afford it because Chubbies is getting a fantastic deal on space at a supermall), he told me that he had no idea how long they’d be there. They’d play it by ear after the summer ended, when the market for Chubbies’ hot-weather products is likely to plummet after the clearance sales. I can’t help but wonder if some of the managers at other inline tenants resent these sweet deals for Chubbies and Necar, which isn’t going to do anything to ameliorate the vacancies at other spots in the mall not affiliated with BrandBox.Why is a mall as successful as Tysons Corner Center getting a 7-Eleven? Why not a Lidl Express? Who actually seeks convenience store-oriented products while buying high-end clothes? Convenience stores are something we expect in struggling malls.
Smart as it may be, BrandBox still connotes desperation. If this pop-up concept becomes a routine sight at malls, it is evidence both of a niche solution and of the failure of malls at large.