The retail apocalypse may have a silver lining after all: Malls are now being repurposed as startup incubation hubs. Mall operators are teaming up with startup programs to offer startups co-working spaces, networking and mentorship possibilities. In November, the Pennsylvania Real Estate Trust and incubator 1776 will open a retail incubator inside the Cherry Hill Mall, and for the past three years, Westfield has been using space in the Westfield San Francisco Centre shopping mall to connect startups with member retailers.

With big-box retailers closing stores, operators are exploring new uses for mall spaces to cope with a six-year high in mall vacancy rates in the U.S. — reportedly 8.6 percent in the second quarter of 2018. Beyond giving new digital companies an entry point to the physical retail world, companies can test products with mall customers.

“It’s another twist on how people are looking at the retail shopping experience; customers can connect with local purveyors of goods, and startups can offer a lot of things in a limited space,” said Jennifer Maher, CEO of 1776. The 1776-Pennsylvania Real Estate Trust incubator will be housed within 11,000 square feet of space within the Cherry Hill Mall.

It’s currently soliciting interest from startups. Heather Crowell, svp of strategy and communications at the Pennsylvania Real Estate Trust, said she hopes the incubator will help introduce some concepts that started online into physical retail spaces. For Philadelphia-based food startup Simply Good Jars, a member of the 1776 network, co-locating in a physical space would offer opportunities to test how a direct-to-consumer product strategy would work.

The company, which is in discussions with 1776 about co-locating within the mall space, currently offers its products through vending machines placed inside properties of companies with which it partners. Founder Jared Cannon said a physical outpost would let it experiment by directly offering its products to customers. Read more from digiday.com…

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