2PM - No 670: The Death and Life Of...

A. Retail Real Estate / Blueprint Future: Like it or not, malls are dying. But not all of them. The survivors and many of their replacements are becoming stronger and more community-serving by growing jobs and providing safe social gathering places. Mall sites are increasingly being strategically adapted to challenges their communities were never designed to address: disrupting automobile dependence, supporting an aging population, leveraging social capital for equity, competing for jobs, adding water and energy resilience in the face of climate change, and, most immediately, improving public health.

2PM Short Analysis (Hilary Milnes): The mall as we know it is dying, despite what retail real estate executives want you to think. But from the husks of the sprawling suburban mega malls that have lost tenants to bankruptcies and foot traffic to the internet, a new opportunity for the original mall format will arise.

Laid out in a comprehensive feature above, which ran in Blueprint, the future of retail centers will be mixed use, featuring open-air stores, apartments, office spaces and centered around community activities and activations like food markets. This is less a future-facing innovation than it is a return to what the original inventor of the modern mall, Victor Gruen, intended. As Web reported in 2019, Gruen’s vision was to recreate urban centers for the suburban class. Eventually, store openings outpaced demand, and we ended with a bloated retail footprint that somehow, someway, was going to falter. The pandemic didn’t kill the mall, it expedited the spread of its pre-existing symptoms.

Retailers are finding new ways to adapt. Nordstrom is toying with the department store model by pulling in more concessions and shop-in-shops; most recently, a partnership with at-home fitness brand Tonal taps into the current workout boom and becomes a win-win for both retailer and brand. Sephora and Kohl’s are growing their relationship, too, with 200 in-store Sephoras to open in Kohl’s. Retail stores have been forced to adjust and increasingly, their strategies are designed to draw in foot traffic that is no longer guaranteed by the mall format. A lot of times, the method relies on tapping into what’s gained popularity online and bringing convenience to the in-person store.

In “The Lying Mall Owner”, Web asserted that malls were not going to return to 2019 levels. That’s true – what we’ll end up with is a different format for the malls entirely. Class A malls – the only ones with a chance of survival – more closely resemble what Victor Gruen set out to create for the suburban class. Let the transformation begin.

Offices can glimpse their future at the mall

B. Retail Real Estate / Wall Street Journal: How will office valuations be affected by the decline of the five-day commute? Shopping malls could provide some answers. Before the health crisis began, 5% or less of U.S. and European workforces worked from home. Rates are artificially high today due to stay-at-home orders: Over 50% of London workers are currently working remotely, according to the latest official count.

As store owners sign more short-term leases, landlords are taking a risky bet on the future of retail

C. Retail Real Estate / CNBC: The risk is a two-way street, though. Because on one hand, in two or three years, mall and shopping center owners could have the chance to turn the tables back in their favor, by hiking rents or booting retailers out for another tenant. But more short-term deals could also leave landlords with even greater vacancies down the line.

This online fitness brand is launching line of shoes and clothing designed by Boston teens

DTC Brands / Boston Globe: A fast-growing direct-to-consumer fitness brand will release a line of shoes and apparel Friday that are designed by a group of teens in Boston. Boston-based NOBULL, a six-year-old online brand, partnered with Artists for Humanity, a Boston nonprofit that connects under-resourced teens with paid jobs in art and design.

2PM Power List: Ranked No. 33.

Nordstrom partners with at-home fitness startup Tonal

Linear Commerce / Retail Dive: Nordstrom and smart-home gym company Tonal on Monday announced a partnership that will put a 50-square foot demo concept into the women's active department of 40 Nordstrom stores in 20 states, starting this month.

2PM Power List: Ranked No. 47

Stitch Fix's former data chief wants to personalize your food at Daily Harvest

DTC Brands / Fast Company: The subscription service works similarly to Stitch Fix: The company gathers data on customer preferences, looking at what they order and surveying them to see if their plant-based recipes need altering—like an ingredient change, or different ingredient proportions.

2PM Power List: Ranked No. 104

NFTs and a thousand true fans

Blockchain / Andreessen Horowitz: NFTs are still early, and will evolve. Their utility will increase as digital experiences are built around them, including marketplaces, social networks, showcases, games, and virtual worlds. It’s also likely that other consumer-facing crypto products emerge that pair with NFTs. Modern video games like Fortnite contain sophisticated economies that mix fungible tokens like V-Bucks with NFTs/virtual goods like skins. Someday every internet community might have its own micro-economy, including NFTs and fungible tokens that users can use, own, and collect.

Bleacher Report's House of Highlights wants to rival live sports

Streaming Economy / Digiday: Gen Z and young millennial sports fans are consuming sports media differently than earlier generations, according to Doug Bernstein, general manager of Bleacher Report’s House of Highlights brand. This demographic is not watching live sports broadcasts on TV, but is tuning into online livestreams and watching highlight clips on social media.

Farfetch reaches profitability after 12 years

eCommerce / Vogue Business: Good news for Farfetch: 12 years after launching and more than two years after its IPO, the luxury eCommerce site hit EBITDA profitability for the first time, thanks to its digital-first approach, focus on sustainability, investment in the New Guards Group and stronger foothold in China, following November's Alibaba and Richemont deal.

What if USPS delivered local produce in the mail?

Logistics / Fast Company: The World Wildlife Fund team envisions that a company or nonprofit could run a website that farmers could use to list produce for local consumers to buy. Farmers would pack standard flat-rate USPS boxes full of fruits and vegetables and schedule pickups; a mail truck would pick up the packages on its regular route and make deliveries to nearby customers the next day. The system, which the team suggests calling Farmers Post, could be cheap enough, including postage, that low-income consumers could afford it.

This report is supported by 2PM’s Executive Membership and is temporarily unlocked. To be a part of what we’re building, you can join here: The Executive Membership. I wrote this essay after reading Sherrell Dorsey and Dan Runcie's response to a panel on the future of newsletters. The three of us met in 2019 at the National Association of Black Journalists. At the time, we didn't understand the event's significance. 

The Press Club. There is a saying in the direct-to-consumer industry: “You may have sales, but you don’t have shelf space.” Now apply these same words to the evolving media industry. The Passion Economy monetized creation, but it has yet to democratize access to respect. As the rise of darlings like Substack and Clubhouse compete with traditional media, the question becomes: if you build a successful media business around your ideas, are you in the club?

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