Trends in Retail Flooring: Competition for consumers drives business - July 2016
By Calista Sprague
For decades, consumers shopped mainly in malls and retail centers where purchasing goods and services was the primary, if not exclusive, focus. In recent years, however, developers have been offering more comprehensive consumer experiences, creating destinations where people can live, work and play, in addition to shop. Today’s most successful developments offer higher end retail options, elevating building materials in the process. And individual retailers are increasing demand for high-end flooring to help differentiate their brands.
Although consumer retail spending fell last year, demand for higher end retail space pushed up rental rates by 2.2% year over year and vacancy rates down to 10% at the end of 2015, from 11.1% in 2011, according to a recent Bloomberg report. Retail construction has been flat for the past couple years, but Dodge Analytics predicts a strong 9% growth for 2016, and flooring manufacturers report retail as one of the fastest growing commercial sectors. Several large projects during the first half of 2016, including a new $500 million shopping center in Las Angeles, a $140 million renovation of an outlet mall in Philadelphia, and a $116 million retail space expansion at TD Boston Garden, have been moving the sector in a positive direction.
SHIFTS IN SHOPPING
Expanded car ownership in the 1950s allowed workers to move out of city centers to the suburbs, and shopping centers followed close behind. Enclosed malls boomed, with more than 1,500 built in the U.S. from 1956 to 2005, according to a 2014 PBS NewsHour report entitled “The rise and fall of the American shopping mall.”
During the second half of the 20th century, shoppers routinely meandered around huge enclosed malls anchored by large department stores with dozens of smaller shops filling the spaces between. Dining was often relegated to a “food court,” consisting mainly of quick serve options, and entertainment was usually limited to an arcade and movie theater.
With the turn of the century came the Internet and mobile devices, leveling a huge impact on consumer habits. People gained the option to shop anywhere, any time, and teenagers who once flocked to shopping malls to socialize and play the latest video games went online instead. Mall traffic dwindled.
In an effort to lure consumers back to brick and mortar stores, developers had to offer more than just a collection of shops. They started focusing on more comprehensive consumer experiences, reinventing shopping centers as destinations that offer, in addition to shopping, full service dining and entertainment venues. Some even include hotels, offices and residential spaces. These modern centers are often referred to as mixed-use developments or lifestyle centers.
For the past decade or so, architects have designed more open-air centers, consisting of a complex of shops, restaurants and other venues that open onto sidewalks, boardwalks or courtyards, which are considerably less expensive to operate than enclosed malls. Enclosed malls have not disappeared completely, however.
“This industry is cyclical,” says Corbett Drew, senior project manager of CBL & Associates Properties, one of the largest mall real estate investment trusts in the U.S.
“The enclosed malls were the predominant players for decades. Then you saw a shift to open-air centers. And now we’re seeing enclosed malls redefining and repurposing themselves in a number of different ways, shifting some of the spaces to nonretail amenities.” Specifically, more full-service restaurants, entertainment venues and children’s play areas have been incorporated into modern malls, as well as amenities like general seating areas and charging stations for mobile devices.
Additional retail, restaurant and entertainment spaces are being planned on property adjacent to existing malls as well, “really responding to the experiential retail that consumers are looking for and giving them a place where they can shop, they can dine and they can play,” explains Drew.
The closing of anchor stores such as Sears and JC Penney in many cities has opened up opportunities for developers to reconfigure. For example, at Cool Springs Galleria, an enclosed mall in Franklin, Tennessee, CBL bought back a shuttered anchor space and put in an American Girl, Rock Creek Outfitters, King’s Bowl (a food and entertainment destination) and Conner’s Steak House. “You take a less productive Sears off the table and repurpose it with more productive small shops, restaurants and experiential retailers, and it has completely transformed that property,” Drew says.
Facelifts and reconfigurations of developments represent the bulk of recent retail work at KA Architecture, a Cleveland, Ohio based firm with extensive experience in retail design. “We have seen a few ground-up enclosed malls, but it’s a lot less active part of the market than in past decades,” director of design Richard Wilden reports. “We’re seeing a lot more open-air components being added to existing enclosed malls, and even mixed use developments bringing hotels, entertainment, residential and office components to what were traditionally retail properties.”
The group recently completed a ground-up mixed-use project in northern Cincinnati called Liberty Town Center that incorporated a new two-level enclosed mall, anchored by Dillard’s and Dicks Sporting Goods, called The Foundry. The remaining two-thirds of the project is open air with residential buildings, a hotel, a comedy club and a movie theater in addition to retail.
MALL DESIGN AND FLOORING
Architecture for modern retail centers varies widely, depending on the price of real estate and climate in the region. In dense urban areas, for example, retail centers tend toward compact and vertical design. In temperate climates like California, open-air centers thrive, while in areas with heavy snowfall, enclosed malls are more appealing.
“Even if you had the same floor plan, you would design the properties differently in terms of fit and finish so that the architecture, the color palette, the material palette, everything was reflective of the local vernacular,” explains Drew. “It needs to feel familiar; it needs to be responsive to location.”
Wilden agrees, adding, “In the past you saw a lot of retail centers with an over-the-top themed approach related to something in the area. Now the public wants a more authentic environment, so I think the design trend for the architecture, whether it’s modern or traditional historic style, is something that people can really relate to.”
Flooring is one of the more expensive components of a mall renovation, so Drew says that developers seek a classic look rather than a design fad that may appear dated in a few years. “If we’re going to reinvest money in a property, we want to make sure it’s going to last,” says Drew. “We’re really looking for flooring that’s going to give us a timeless look and a durable finish that’s going to wear well for a long time. That’s one of the lessons that was amplified during the recession, and it’s not going away.”
Common areas in malls were historically covered mainly with terrazzo. However, terrazzo is expensive and limited in design options, so porcelain tile and carpet have become more prominent today. “There’s such a wide variety of porcelain tiles and carpet out there that you can respond to most environments,” Drew says. “With those two flooring materials you can deliver a fit and finish that speaks to the regional architectural vernacular and speaks to the climate needs.”
Porcelain tile is one of the most durable flooring products available, lasting for decades when properly installed, and it is also one of the easiest to clean. CBL utilizes epoxy grout for the floors and six inches up the walls to ensure that the grout does not stain over time.
Whereas 12”x12” tile squares with 1/8” grout lines were once standard, now designers specify much larger formats of rectified tile for a more contemporary monolithic look. Senior interior designer at KA Architecture Christine Bazek points out that large-scale patterns are often created by mixing colors and formats or by mixing polish levels. And she says that many manufacturers now offer coordinating mosaics with their tile collections, providing yet another option for design interest.
Mixed materials is also a popular trend in mall design. A variety of materials or visuals can be used throughout a mall to create interest or to delineate specific areas. Designers appreciate the myriad of high-end looks that porcelain can provide, realistically mimicking stone, metal, wood or concrete, depending on the desired aesthetic.
Tiles in the common areas tend to be lighter to reflect light, making the space feel larger and brighter. And flooring colors tend to be neutral, with bolder colors in items such as furniture that may be replaced more often.
Quality installation continues to be a problem for designers when specifying tile, and with such large swaths of tile going into mall renovations, developers and designers go to great lengths to mitigate issues. KA Architecture brings in a tile consultant to inspect the existing substrate on all large retail flooring projects, especially renovations. Although the architects prefer large format tiles, the consultant may recommend smaller tiles or a specific joint pattern, depending on subfloor condition.
Architects and designers often specify installation details, including the utilization of specific membranes, setting materials and curing times to ensure successful floors, but since they don’t oversee the work, problems may still arise. Large format tiles set on troweled thinset rather than in a mortar bed, improper cure times and other issues can threaten the success of an installation, especially when a project runs past deadline.
In addition to ceramics, carpet is commonly used in malls. Because it absorbs sound, carpet is most often found in seating areas and other places where designers want to create a calmer environment. It also lends softness and warmth to the surrounding hard surfaces.
Carpet tile is specified more often than broadloom for common areas due to its ease of maintenance and quick replacement if stained or damaged. However, area rugs are sometimes cut from broadloom for use in seating areas.
Executive vice president of KA Architecture Craig Wasserman says that his firm prefers to use hard surfaces for the main walkways in malls, but some clients insist on carpet for ease of installation and cost savings, especially on the second floor, where there tends to be less traffic. “Sometimes they regret doing that because it creates a maintenance issue long term,” he explains. “It’s a balance that we’re always struggling with. There’s only so much money to spend. How do we spend it properly?”
In some situations, however, Drew says carpet may be the only option. Older malls that have been renovated several times may have uneven subfloors that would be too costly to prepare for a hard surface, whereas carpet is more forgiving. “Carpet has come a long way and it’s a lot more durable to use in some of those high traffic areas, and it’s less expensive,” he adds.
Bezak says that she looks for high density, level loop carpet tiles that won’t crush under heavy traffic. She prefers planks with a variety of colors “on the darker side to hide dirt.” She also likes to mix accent colors with more neutral planks to create patterns or to highlight a particular space.
Back of house areas that get no public traffic tend to be sealed concrete, but in renovations with concrete that is in poor condition, VCT may be installed. The overriding goal is to create a smooth surface for employee safety and for ease of moving inventory; aesthetics are not a consideration.
TENANT SPACE DEVELOPMENTS
Mall developers tend to be flexible about the flooring used in tenant spaces, though some provide guidelines for flooring specification, to ensure durability and keep the property looking fresh. The common spaces are deliberately designed to be neutral, allowing tenants the freedom to create any desired aesthetic for their individual floors.
For the past few years, finishes in malls and their shops have been trending toward the higher end, as design plays an ever larger role in retail sales. Wilden notes that today’s consumers are more sophisticated. “The general public is gradually becoming more attuned to design than they were in the past,” he says. “We see that with individual retailers. The stores that do the highest per-square-foot sales also seem to be the ones that are the best designed, something that customers are really relating to now.”
Big Red Rooster is a business consulting firm focused on branding that has designed spaces for many national retailers, including L.L. Bean and Under Armour. Michelle Isroff, vice president of design, recently completed a project at Mall of America in Bloomington, Minnesota. The iconic mall was once the largest in the world and has always featured entertainment venues, including an indoor roller coaster and stages for live performances. Isroff says that the mall has upgraded its standards and branding, adding, “It’s always been a nice mall, but they’re really pushing to elevate that experience.” She says the mall is also pushing its tenants to elevate their designs while still allowing for individual differences. “I think some of the smarter developers and landlords are finding a way to create standards that uphold their operations but really allow some flexibility.”
Competition to attract and keep consumers in stores is fierce now that people can shop online. An effective design can communicate a brand’s unique image as well as influence perception of quality and value in the first few seconds after a consumer walks through the door. And flooring plays a critical role. “The floor is one of the largest canvases we designers have to work with in a space that everybody sees,” says Isroff.
Malls are not the only retail sites upping their game. Red Rooster does a great deal of design work for national retail clients in airports and hotels as well, and they, too, are increasing the level of quality in design to enhance the consumer experience. “They’re really trying to pull people in while they have a captive audience,” Isroff says.
FLOORING IN TENANT SPACES
Although the materials used in retail spaces are rising in quality and aesthetics, style trends have remained fairly consistent. Urban and industrial looks, for example, have been trending for several years now and continue to be popular for retail shops. “It’s a very strong aesthetic across all industries, not just the retail industry,” says Deirdre Schuth, national accounts manager for Creative Materials Corporation, which supplies flooring to national chain retailers.
Concrete is the most popular flooring to coordinate with these urban and industrial looks, but Schuth says that many retailers are opting for lookalikes. Often the concrete in shopping centers is in poor condition or may have a trench or patch running though it, so porcelain that mimics cement is chosen instead. Currently, hybrid looks of cement mixed with other materials such as metal, wood or fabric are trending. Also, tiles that look like a ground concrete floor with exposed aggregate have gained in popularity recently.
Reclaimed and rustic looks continue to be popular among retailers as well, often expressed through porcelain that mimics reclaimed or distressed wood. Occasionally, real wood floors or laminate may be specified in a retail space, but more often porcelain is substituted for its ease of maintenance and durability.
Classic black and white floors and marble floors are also perennial favorites in retail, and can be mixed with a myriad of accent colors for branding purposes. Historically, marble floors in high-end retail consisted of natural stone, but
recent advancements in digital inkjet technology have allowed manufacturers to create porcelain versions that rival the real materials in aesthetics while outperforming them, especially in terms of maintenance and price.
LVT has had major advancements in aesthetics as well, and its use is growing in retail, although some malls restrict the use of vinyl. Designers report that the retailers that install LVT tend to choose it for its lower cost and ease of installation. However, it is much softer than ceramic or stone, and as time passes, durability can become an issue. “A lot of brands will try to start with LVT and then find that it’s just not going to work,” says Schuth, “so they take the upfront hit in the cost knowing that they will be cost neutral in a year, two at the most, for maintenance and repairs.”
The designers report that grey hues are still widely used for retail design, especially in warmer tones. Isoff points out that warmer grey options are especially important with the increased use of LED lighting, which casts a bright, cool light. When choosing flooring colors for retail, Michelle reviews the products in natural, diffused and LED lighting to see how it reads in each situation. A dark carpet will soak up light, for example, whereas a pale wood-look LVT reflects light. She works closely with a lighting designer on retail projects to ensure that the flooring choices work with the lighting plan to create the desired atmosphere.
Finishes and style trends in national retail chain interiors tend to be less influenced by regional or local aesthetics than the exteriors. Schuth says that most retailers want to create a consistent, nationwide identity, and they look for flooring that supports the brand without competing with the merchandise. “One of the trends we see emerging as a result is a fabric look in porcelain.” She says that Lane Bryant, for example, is currently using tile with a soft textile visual that gives a nod to the clothing without distracting consumers.
“Another thing we’re seeing a lot of is thin porcelain tiles,” explains Schuth. “Those are used pretty frequently on floors and facades, especially in a concrete look or a marble look.” To ensure successful installation, Creative Materials frequently partners with Mapei, offering installed warranties, especially on the thin tiles. Thin tiles of 5.5mm or greater thickness are suitable for floor specification, but they are mainly used in renovations over existing tile to decrease down time and eliminate demolition costs.
Although retail spaces tend toward hard surfaces, designers report that approximately a quarter of retail flooring specification is still devoted to carpet and area rugs. Carpet and rugs can be used to break up a retail space into zones, and often designers specify a more durable hard surface for the main pathways and carpet, which is typically less expensive, for the areas underneath the merchandise racks. And carpet may be used to highlight a vignette, a special offer or a seasonal display.
Carpet provides warmth and softness to spaces with hard surface flooring, which can be perceived as cold, but it serves functional purposes as well. Hard surfaces can cause issues for employees who have to stand for hours at a time, so area rugs and sections of carpet may be specified for spots where employees tend to stand. In a high-touch service point, carpet or an area rug can be used to give the consumer and salesperson or consultant a quieter and more comfortable place to meet.
Carpet and rugs also offer designers the opportunity to provide customization to their clients more readily than with other flooring options. In coordination with the manufacturer, colors can be substituted and patterns can be expanded or contracted for a unique look.
Modular carpet is the most often used soft surface, prized mainly for its flexibility. Retailers can easily install or uninstall carpet tiles to highlight a temporary display with little or no down time. Also, damaged or stained carpet tiles can be replaced immediately. However, broadloom is still a viable option for retail projects. “In fact, a project I’m working on now has several thousand square feet of broadloom,” Isroff says.
As with hard surface materials, designers seek carpet with a higher end look, even when the budget is stretched. Isroff notes a recent retail design in Las Vegas, “The project is really high end, but we didn’t want to do designer carpet, so we were looking at what will maintain well and easily for the client, but look and feel plush. Where you are going to buy a $500 handbag, you want to create an aspirational scenario and help to raise the perception and value of the experience.” With such a wide range of fibers, constructions and faceweights available in carpet today, designers can more readily find affordable carpet to fit a budget with a look that still communicates the impression of luxury.
Carpet with a mixture of cut and loop pile is trending, as is the incorporation of hints of sheen with a metallic thread or yarns of various sheen levels. All over loops tend to wear better since they don’t crush as easily, but designers say that they are perceived as lower end. But loops also reflect more light, so designers are gravitating toward cut and loop options to reap the best qualities of both constructions.
Whatever the flooring choice, retailers typically look for a lifecycle of around ten years. Established brands with multiple locations across the country need the flooring to last because remodeling so many thousands of square feet is costly. Smaller brands and those more oriented to the latest trends may renovate in as few as every five years. And within that five to ten years, retailers expect the flooring to be easy to clean, to show little to no wear and to stand up to heavy traffic.
Many national retailers have in-house designers who specify flooring for all the brand’s locations, both for new builds and renovations. In general, retailers desire a single design concept that is consistent coast to coast so a consumer knows what to expect when they enter the store. However, stores evolve over the years, so differences between stores may develop. Cabela’s is a textbook example.
Cabela’s is a national outdoor sporting goods retailer, with an emphasis on hunting, camping, shooting and fishing. Both the architecture and interior design of the free-standing shops convey a rustic, outdoorsy vibe that is similar in every store, with natural colors and textures, wood accents and nature images that give consumers an immediate feel for the store’s offerings.
Interior designer and store design manager Danette Handyside says that Cabela’s has several store formats that have developed during the brand’s 25 years of business, but all consistently communicate the outdoor theme.
Flooring in most of the existing stores is mainly ceramic tile with a subtle textured stone look that coordinates with the store’s nature theme. Modular carpet tiles in 24” squares are specified under merchandise fixtures as well as in the office areas, chosen for ease of replacement, maintenance and durability. The carpet is mainly brown with specks of other colors. “We don’t like to do anything too bold,” Handyside says, “because we don’t want to take the customer’s focus away from the merchandise.” VCT is installed in back of house areas like electrical rooms and the employee break area.
For new builds, stained and sealed concrete is now specified for the main walkways to eliminate the noise of cart wheels rolling over grout joints. However, even when older locations remodel, the old ceramic will be replaced with new, since the subfloors are too rough to stain and polish. The newer stores also feature delis with ceramic floors in a dark grey wood look to differentiate the area from the rest of the store.
Handyside says that flooring for Cabela’s has a lifecycle of about ten years. “So we need products that are really durable and high end compared to retailers that get renovated more often or that have less foot traffic. The flooring has to be really high performance in all areas.”
Copyright 2016 Floor Focus