What was genuine, what was so interesting to me was wow, these shopping centers have been more to people than just a place to go and get stuff. These were places where people wanted to go and be together, where they could hang out. And so you said, what makes you want to add activation? What makes you change a shopping center to community center? I think the people really, that's what they raised their hand and said, this is where we're going, this is what we're doing, this is what we want. And you could put blinders on and say, let's just get the stores open as soon as possible, but you can listen to what the people are saying and that is, bring us more things that we want, that we like, that we love, that can entertain us, that can feed us, you can sell stuff to us, but give us a place where we can feel a sense of community and that's where we want to go. And we took that, that fuse was lit and we ran with it.
Hello and welcome to today's episode of the Keynote Curators podcast. I'm Seth Deckman, your Keynote Curator. My guest today is Steven Yalof, CEO of Tanger. Steven has led a visible reinvention of what used to be known as just outlet centers. Now they're more experiential, they have communities, and there are more and more reasons for what Steven has done with Tanger, why people show up in person. Steven, welcome to the podcast.
It is a special note to our viewers and our subscribers. Steven and I have known each other since we were both in elementary school. So it's a long history and stick around, you're in for a treat. Like us, love us, share so we can expand these great conversations with our community and get these ideas out as far into the world as we can. So let's get right to the heart of the matter, Steven. You have said that post-pandemic there's a real opportunity to transform. And one of the things that you've done with Tanger is you've leaned into activations and community events. What was the source of the thinking behind that? And then what surprised you most about finding out how people responded to what they actually want from a physical place?
Well, first of all, thanks for having me on. This is a great opportunity, and you and I, like you said, we've known each other for a really long time. So, looking forward to having a genuine, natural conversation about the business. And I love the first question because it really teased the whole thing up. If you think about it, let's go back to the pandemic. I started at Tanger in April of 2020. So, if you can think about where you were during that month. It's about 6 years ago today. Can you imagine how quickly that time has gone by? My first day of work, I had a real estate investment trust, a publicly traded company. Our stock was trading down in the $4 range. We had 40 shopping centers, 15 million square feet, 3,000 stores, and every single one of them was closed. Because everybody was staying home. People hadn't really figured it out yet. So, what were the first things that opened up post-pandemic? Open-air outdoor environments. In fact, on day two at Tanger, I literally got in my car, drove out to Riverhead, Long Island, which is where one of our shopping centers was, just to see the center on a day when everything was closed. I was fascinated because there were 100 people walking the shopping center. Sergio Tacchini tracksuits, old pair of Reebok shoes, and the general manager of the shopping center kept the music on. And what I connected on that day, and it's easier to look back in retrospect, was the fact that people were going to these open-air shopping centers even though the stores were closed as a place to have a sense of community, a place to do the things that they were doing every day, which was walking outdoors in an environment where they felt safe, where the music was on, where they could park their car, where they could wear a mask, they could stand 6 feet apart from their friends in their walking group. Yet, they could still have a little bit of normalcy in their life. And what was genuine and so interesting to me was, wow, these shopping centers have become more to people than just a place to go and get stuff. These were places where people wanted to go and be together, where they could hang out. And so, you said, what makes you want to add activation? What makes you change a shopping center to a community center? I think the people really. That's what they raised their hand and said, this is where we're going. This is what we're doing. This is what we want. And you could put blinders on and say, let's just get the stores open as soon as possible. Or you can listen to what the people are saying, and that is, bring us more things that we want, that we like, that we love, that can entertain us, that can feed us, you can sell stuff to us, but give us a place where we can feel a sense of community, and that's where we want to go. And we took that. That fuse was lit, and we ran with that.
It's so cool because there are these terms like management by walking around. You basically, I've shared on this podcast with other guests that you pay attention to the world around you. And if you really have all your senses open, your open heart, your open mind, but your eyes and your ears, and you're really listening, the answers are right in front of you. It takes an effort, you have to connect the dots, but you did that and so much of it is just paying attention. In sports sometimes, in basketball, you have your head on a swivel, you want to see the ball, but you also want to see in your periphery. And it seems to me that you had your head on a swivel, but you've taken it that much further. I have a Tanger near me in North Charleston. I'm here on Daniel Island and there are activations that bring people together and as you said, do the things you do. So, you took that. Now, are there additional things that you've learned about community and those activations that have brought people together that have surprised you?
Totally. Let's fast forward a year or two. There's definitely going to be stores that are not going to reopen. The pandemic wiped a lot of those retail stores literally off the map. Gone overnight essentially. So, now you have a lot of vacancy in your centers that needs to be filled. And another dynamic that was happening. So, you would say, wow, that's a real challenge. But another dynamic that was happening were people were moving to plenty of places like Charleston. That center when it was originally built, it was built because there were a lot of tourists going to Charleston. And one of the things that tourists love to do when they were on vacation was go shopping. It just happens to be something that people always looked forward to doing. Well, now all of a sudden all these people are moving into that market, that North Charleston market. The population is growing, whether it's work from home or an opportunity to leave cities and live in mid-tier market communities, customers started to move much closer into the shopping centers that we had owned that were previously catering towards people who were driving 100 miles to get there. So, now what we found, we've got a vacancy issue, an occupancy issue, and we've got people moving in closer. What do those people want? And those people wanted those amenities you were talking about. They wanted restaurants and better food and beverage opportunity. They wanted more entertainment and more chances for things to do. So, where I thought I was going to be challenged to find outlet retailers to fill some of that vacated space, we pivoted and said, wow, look at the new populations that are moving in here. Look at the things that they want. Going back to your statement about having your head on a swivel. For us, we wrote a vision statement very early on in the evolution of this company and said, hey, what do we want to be when we grow up? And we decided that we wanted to be more of a customer experience company than just a shopping center company. And how were we going to get there? What was the mission? Well, we thought that we would get there by using customer insights as a way of informing what that future of shopping ultimately looked like, which is the same thing as saying, customer insights. What are customer insights? You stop, you ask a bunch of questions, you get a lot of information, you can say, hey, I'm hearing that a lot. Maybe that's something that people really want. So, we took that permanent population moving in, we took the vacancies that had left, came up with a bunch of non-traditional outlet uses to put in these centers to actually light the fuse and create some fire in these centers. Because to me, I was used to getting a car in my parking lot once a month from a customer or once every quarter from a customer. But now if I can get that same customer every week, every day, because there's something different that they're coming for each time, I'm going to build my traffic, I'm going to build my dwell time, and I'm going to get my customers to stay longer. When they stay longer, they ultimately spend more. When they spend more, that gives me the opportunity and the ability to bring in even better quality retailers that only serve the flywheel of helping that consumer in that local marketplace get more excited about the return trip.
Words like engagement, community, experience, they're thrown around, but follow me on this. Something happened just yesterday. I attended a local tennis tournament. It's an important tennis tournament. Seven of the top 20 women in the world are here. The prize money's really big. It's the launching point before the European leg of the season begins. And it's a very small local community. The place was packed because the players were the attraction. But Stephen, it was open till midnight because there was glow tennis for the kids. There were former players that were musicians that were playing in an unplugged kind of environment on the campus of the stadium. And several other things like caricatures, fairy hair, a lot of stuff was for family. There was a barbecue competition. Very cool stuff. On our way walking out, we were fortunate enough we live close enough we were walking home. There was a 7-year-old kid that turned to his mother and said, Mom, this is the best tennis tournament I've ever been to. And my thought was, you're seven. I mean, how many tennis tournaments have you gone to? But that is literally the production, the manufacturing of the experience in real life. That is literally what you want your attendees, your participants to be saying to each other. Set back in the day when we went to Orange Lawn where the US Open was held when we were kids, right? You would go, spend the day, and you'd watch a lot of tennis. And maybe get in some Planters peanuts and some Diet Coke.
I'm often asked where do I get my inspiration when I'm thinking about building a new shopping center, buying something and redeveloping it, and making it something that speaks to a lot more customers. Where do I get that inspiration? One of the places that I go to get inspiration are the football stadiums. Current football stadiums. Because you think about football as a game when we used to go there as kids, we used to go to Giants Stadium. But think about it today. First of all, I'm a Jets fan, so the product on the field isn't so great, but the food's never good. It's always cold. You're sitting in a crummy seat outside. The parking is bad. The access is really bad. The bathrooms aren't clean. Everything is overpriced. Yet every single week they sell out those stadiums week after week after week. And there's been an evolution because people have realized, you know what? Parking's a lot better if I stay home. The TV's a lot better and bigger if I stay home. The food's a lot better if I stay home. The bathroom's a lot cleaner if I stay home. How do they still get people up off the couch and into the environment? And they do exactly what you said. They've got great things for the kids to do. There's a Jets experience. There's meet the players. The food is the who's who of restaurants from New York City who've opened up small kiosks inside. There's a VIP parking experience. They've made the access so much better. The bathrooms are so much cleaner. The seats are a lot more comfortable. And oh, by the way, you can also watch a game when you're there. So they completely shifted the narrative. And for us, that's kind of how we're thinking about the shopping center business. Same thing. You used to go for an outlet experience which is power shopping. Go to store, store, store. Maybe you grab the pretzel or your Planters peanuts because there was nothing there. It was a snack food. It was grab and go. But now all of a sudden if I get you to come for the food but stay for the shopping. I get you to come for the movie theater, stay for the shopping. Get you to come because now I've got pickleball, I've got gyms, I've got SoulCycle and stay for the shopping. I'm doing a really good job of flipping the narrative much like these stadiums are doing today.
Connecting it to what you do outside of being the CEO of Tanger. You speak a lot. You attend conferences. So you see the same ideas but at events, summits, conferences. And meeting professionals are challenged with the same task. The engagement, the community, the sticking around and having it be meaningful. So they can learn from these lessons and that's why our audience, which many are business owners and some are speakers and some are conference planners and meeting professionals, that's why they come back for these great conversations because I think what you just imparted has the sensibility and the ethos of what they are looking to accomplish when they're bringing their attendees in not only to hear speakers but to have an experience that is valuable, worthwhile and that they want to stick around for just because it's fun, it's valuable, it's informative and they get something great out of it. So I want to turn the corner a little bit. You worked for a titan in the industry, Mickey Drexler. And I'm going to hack up the quote here but there's some interaction you had where he said, out of one idea 50,000 people have the same idea but don't bring it forward. Or don't make the call. Talk to us about that and help clean up the quote for me, if you know what I'm talking about. And how does that change how you've listened to customers, to your team, and how do you turn quiet signals that are just whispers into that innovative opportunity?
Wow. There was a lot there. Sorry, word salad. No, it's great because I really haven't had an opportunity to talk about this, and this is amazing. I don't think Mickey would mind if I told this story. I found myself in the car with Mickey, it must have been 15 or 20 years ago. He is at the height of J. Crew, reinventing the brand. At the time, I'm at Ralph Lauren, and the two of us, I think we went out and we saw a shopping center together, or there was an event, and he offered me a ride home. So, I sat next to him in his car, we're in the backseat, and Mickey's thing, he's got his assistant on speakerphone. He's like, all right, let's call everybody back. So, evidently, she's got a long call list of people that called him, and he's going to use the opportunity not to sit and talk to me, but he's going to use the opportunity to call everybody back. Now, to me, that's far more fascinating. I don't have to sit here and listen to myself speak, I get to listen to him on the phone talking to customers and business people and landlords and I'm going to learn a ton. So, as I'm sitting there, one of the calls was a woman picks up the phone and calls him or he calls her back and she goes, I can't believe you're calling me back. Very excited. She said, I'm calling you because I have to tell you that I went to the J. Crew women's store, and you have five or six different styles of dresses. They were all in the same shade of blue, and I used them for my bridesmaid dresses for my wedding, because all the women had different body types. I wanted them in a certain color, but I was able to fit everybody in my wedding party with a different style of dress and it was amazing and I'm just calling you to say thank you. That was great. And Mickey gets off the phone with her and says, that's unbelievable. I can't believe I just had that conversation. Literally picks up the phone and calls his head designer, his head of retail, his president of operations and says, I've got a genius idea. And that is let's do a wedding shop. Let's do a shop where we can dress all the bridesmaids, groomsmen. We've got the product. We've got the style. This is what this person said. And he said to me, I said, I can't believe you would take that one phone call and turn it into this big idea that now you've got your entire organization ready to invest in. And he said, it's just because I only got one phone call, doesn't mean another 50,000 people were thinking about it but just didn't call me. That's a great idea. And that's kind of how he thought about that. And the next thing you know, there was a store on Madison Avenue. That was the J. Crew bridal shop. It was born out of that call on that day and he just made it happen. And I apply that rule to a lot of things that I do, too. Going back to our vision statement, using customer information to inform the future of shopping. I mean, isn't that what he did? He took great customer info and turned it into the future of that brand which also elevated that brand and created a higher level, higher price point of some of those products that turned out to be a real success story for them for a long period of time.
What a treat to answer that question. But you answered the question because what a treat A to B. First of all, to see how somebody of that level operates. We all use the phone, we all have conversations but what I'm left with is it's almost innate, right? That he's listening for an opportunity, listening for what's possible. So, it's just instinctual and natural. Takes the acknowledgement and immediately inhabits the information and fabricates this unbelievable possibility, which by the way, Stephen, my wife's dress on our wedding day was from that shop. Isn't that crazy? Now you know the story. Hopefully, it gives a little more richness to it.
