Choosing and Approving a Pop-Up or Promotional Space Tenant
Speed up your tenant approval process with the POP UP SHOPS’ platform and reduce your marketing and administration efforts by up to 70%
As we argued in series 1, most center managers focus more efforts on rental income of inline-shops and often don’t manage mall and outdoor spaces efficiently to generate additional footfall and revenue. Yet, when it comes to the management of your shopping center, your success hinges on footfall and eventually on the success of your tenants.
By favoring long-term tenants for inline-shops a lot of shopping centers miss out on innovative tenants that have the potential to drastically increase the footfall and eventually become long-term tenants. Center managers often prefer long-term tenants because their traditional way of choosing and approving them takes weeks or - sometimes – even months. Thankfully, there is a way to make use of promotional and pop-up spaces and speed up the selection process dramatically at the same time: our platform, POP UP SHOPS.
Let’s take a look at the current tenant approval process and where its problems lie.
The Current Tenant Approval in Shopping Centers
Many shopping centers across the globe have to deal with a rather tedious tenant approval process. Most often, the process is something like this:
- A request from a tenant comes in via email, phone, or the center’s website.
- Then, a member of the shopping center’s management or administration team (let’s call that person the “administrator”), takes a look at the request. He/she might ask the tenant for more information and/or provide him/her with some basic information like sending the building or space layout by email.
- Once the administrator has reviewed the request, he/she sends it to the shopping center manager who has the final say. They agree on whether a viewing should be organized with this tenant or not.
- The tenant visits the shopping center and views the space. Some initial negotiation happens. This step and negotiations might go on for a couple of days or weeks.
- Eventually, the center manager approves or declines the application and informs the administrator and the tenant.
At first, this might seem rather simple. However, the whole procedure can take a few weeks or even a month from start to finish. This is a problem in itself because of the following three reasons:
- For pop-up and promotional spaces, this process is simply not efficient. It has a lot of manual steps and requires a lot of communication. This way, center managers tend to not actively manage pop-up and promotional spaces as the efforts seem too high. In reality, it’s simply the traditional process that doesn’t fit this business model.
- Center managers tend to rule out tenants if they don’t seem to be good “long-term tenants” (think startups). This way they might miss out on something which could actually work well to bring additional footfall and revenue (during low season). Also, often concepts that first seem too simple “on paper” might actually work very well. Pop-up and promotional concepts allow center managers to take a flyer on a new and upcoming brand!
- Tenants might shy away from shopping centers with long waiting times and overly complicated processes for renting pop-up and promotional spaces. As in every business, losing clients can become a problem.
Tenant Mix and Negative List Are Not Enough. Curation Criteria and Tenant Profile Requirements Are Needed
Traditionally, most modern shopping centers across the world put an emphasis on a certain tenant mix. But this is not enough to efficiently choose and approve new tenants. Some shopping centers also work with a simple ‘negative list.’ A negative list bans certain tenants and concepts from renting space at the shopping center, such as religious or political campaigning, as well as sometimes concepts that promote alcohol, drugs, or tobacco. In few cases, center managers work with pre-defined tenant profile requirements and curation criteria for choosing tenants. These tools provide clear instructions of which tenants can and should be considered. Done the right way, they increase the efficiency of choosing and approving a pop-up tenant enormously and reduce the administrative overhead to a minimum.
As a rule of thumb: Your Tenant Profile requirements and Curation Criteria should be defined in a way that you can task a Junior Center Administrator or Junior Center Manager with choosing and approving standard tenants. Of course, it still requires the strategic mind and experience of a senior center manager to pick the best tenants nevertheless having these tools massively speeds up the process.
On a side-note: With shopping centers becoming experience centers and communities and new retail concepts emerging, the days of the traditional tenant mix are over. In fact, the presence of non-retail tenants often leads to an increased amount of time spent at shopping centers and malls. In turn, this results in more visitors and ultimately – more sales.
For instance, Liberty Center, a famous shopping center in the Greater Cincinnati area, is coming to play a bigger role in the cultural life of people. In other words, it’s becoming a cultural hub. In an effort to attract more customers, it totally overhauled its previous tenant mix. Nowadays, the center is very successful thanks to this specific transformation into an entertainment center.
POP UP SHOPS – Attract More and Better Tenants and Decrease Your Selection Efforts
As you can see, there’s an underlying need for changes if you want to increase the success of your shopping center. And a good first step is to simplify the way you choose and approve new tenants. Otherwise, you risk losing them to your competition. When we created our platform – POP UP SHOPS – we wanted to simplify every single step of the leasing process, including the tenant selection and approval process. Having clearly defined which tenants you would like to choose, on POP UP SHOPS, you can review and approve/decline a space booking with a single click, so even a junior member of your team can say “YES” or “NO” to potential tenants.
Another benefit of using our platform is the much shorter waiting period for tenant approval. When a booking request for a promotional space comes in, shopping center managers have one week (7 days) to decide whether they approve the tenant or not. If they don’t make a decision in that period, the platform auto-cancels the booking request. In other words, our platform “facilitates” also faster and simpler internal processes.
Now, as much as you – as a shopping center manager – should strive for a very simple tenant approval process, we are aware that eliminating all internal approval is impossible. However, our aim is to not only simplify but also speed up the process, so we believe getting that approval is possible in 1-3 days.
A third benefit of using POP UP SHOPS is the simplified and transparent pricing. Traditionally, when tenants want to book a space, they often face a big problem – intransparent pricing. Some tenants shy away from even inquiring about space because the pricing is not clear. In other cases, tenants that can’t afford a certain space might unnecessarily keep a center manager occupied for days until the price negotiations start just to back out. This can also be prevented with transparent pricing.
In addition, POP UP SHOPS allows you to give certain tenants discounts, so you can still implement advanced pricing models without losing the benefit of an automated booking engine that takes care of all the administrative steps including payment collection. REGISTER HERE