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Why luxury shopping center South Coast Plaza is thriving as American malls go by the wayside…

Don’t call South Coast Plaza a mall. It’s an “international luxury shopping experience.”

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Racked LA recently published a long-form article on South Coast Plaza in Costa Mesa, CA called “The Case for the American Mall.” As the largest mall on the West Coast with a sprawling 2.8 million square feet of gross leasable area, South Coast Plaza has over 250 stores and its sales of over 1.5 billion a year are the highest in the United States. How are upscale shopping centers like South Coast Plaza not only staying afloat but thriving in the age of e-commerce?

To summarize, here’s a list of what South Coast Plaza (SCP) is doing right:

  • SCP has the good stuff: SCP’s brand identity didn’t emerge until they brought Nordstrom on as a tenant in 1978 and it set off a chain reaction in which tenancy became more specific and refined. “Once South Coast Plaza started adding boutiques such as Yves Saint Laurent, Courrèges, Halston, Hermès, and others, it began its transition into a luxury shopping center with a broader geographical following,” said Debra Gunn Downing, the center’s executive director of marketing. “Luxury attracted luxury.”
  • SCP is selling experiences: You don’t go to the mall just to buy stuff anymore. You also go for the emotional, cultural connection. The social component of going to in-store yoga at Lululemon or a cooking class at Williams-Sonoma at SCP is an experience. It’s a place to be, and to learn, and to do. It’s the mall of the future.
  • SCP caters to their tourist clientele: International tourism accounts for 9% of South Coast Plaza’s 24 million visitors a year. That’s 2 million foreigners who visit SCP wanting to shop. How do they welcome them? SCP allows tour bus parking, provides Mandarin-speaking sales associates, feature dual language signs, and offers perks for having international boarding passes. SCP was also the first to accept China UnionPay, a domestic bank card used in China.
  • SCP doesn’t exclude the mass market: Just because SCP features primarily luxury retailers doesn’t mean its customers will only shop at designer stores. Their tenant mix includes children’s retailers and fast fashion staples in addition to noteworthy ones like Japanese casual wear brand Uniqlo.
  • SCP embraces foodie culture: Use restaurants to draw customers to the mall. “Restaurants have played a crucial role in retail growth, accounting for roughly half of all retail unit growth since the end of the recession in 2010,” said Garrick Brown, Vice President of Retail Research for the Americas at Cushman & Wakefield. SCP has upgraded their eatery options over the years to unique, quality establishments targeting foodies and Instagram culture. Gone are the tenants of yesteryear such as Del Taco and Sbarro. Now you can chow down on xiao long bao dumplings at Taiwanese import Din Tai Fung, provided the line isn’t too long. Feeling thirsty after browsing diamonds at Cartier? Hit up Nekter Juice Bar for a cold-pressed beet juice pick-me-up.
  • SCP gets the perks of technology: SCP is using new technology to improve the shopping experience, such as Buy Online, Pickup In Store (BOPIS) and interactive fitting rooms with user-friendly interfaces.
  • SCP and the “touch factor”: When it comes to luxury goods, brick and mortar will win over e-commerce every time. The experience of trying on a Valentino gown or feeling the weight of a Cartier bracelet in person does not compare to buying the items online. E-commerce can be more convenient but customers don’t mind going to luxury stores in person for the experience. They also prefer to buy expensive things in person.
  • Luxury retail don’t stop, won’t stop: People who buy luxury goods do not stop buying luxury goods when the recession hits.

While the American mall is supposed to be dying, “retail rents for premier shopping center space continues to rise,” says Garrick Brown. So the internet isn’t killing malls. Better malls are and South Coast Plaza is among the best. May it live long and prosper.

 

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