August 16, 2016 | Written by: Michael Dobbs
Categorized: Shopping Experience
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When I was growing up, people went to the Malls as a form of entertainment. Kids met there, adults shopped there, and seniors took walks there. This was the heyday of retail.
People today aren’t going to the malls as much. There are lots of reasons – Internet Retail, more options for entertainment, Pokemon Go (though malls may be good hunting grounds!). In any case, sales are down as is traffic in and to the malls. Stock prices of mall based retailers are under pressure. Companies operating malls see these trends and are constantly looking for ways to remain relevant in this changing Retail Landscape.
Years ago malls looked for Anchor Retailers. These were usually department stores or sometimes grocery stores. The Anchor Retailer usually didn’t pay the high rent that other retail in the mall paid. They usually took long term leases at low rates. Their job in the retail ecosystem was to bring in customer traffic to drive customers and sales to the rest of the mall.
Today, retail is different. Many “B & C” malls (smaller, lower traffic malls) cannot attract the ‘normal’ Anchor Retailer. Without the Anchor Retail in place, traffic goes down and the smaller retailers in the malls lose customers and sales. As a result, many of these smaller malls are having problems keeping stores open and rented.
Change in Retail Strategy
Retail Strategy in malls is changing. Mall Management Firms are looking for other types of tenants to draw customers to the mall, like Movie Theaters, Restaurants, Health Clubs, and even Senior Citizen Centers! All of these drive foot traffic and ultimately sales to other retailers at the mall. It also changes the Retail Rent dynamics in the mall. If a mall does not have a “classic” Anchor Retailer, it can avoid the deeply discounted rent that the Anchor Retailer would normally get, increasing profits and allowing it to give rent relief to other retailers who may be hurting due to lower traffic counts.
The Retail Environment is changing, and technology can help drive this transformation. Here are two examples:
- I was recently at a Mall and went to eat lunch with my daughter. The restaurant gave us a buzzer and told us there was a 30-minute wait. They warned us that the buzzer may not work outside of the restaurant. Big mistake for the mall. I wasted 30 minutes sitting in a restaurant in the mall instead of spending money in one of the stores. Why not engage Mall WiFi to extend the Buzzer’s range or create an app and call people back to the restaurant thru their smartphones?
- A great way to drive traffic would be with a loyalty program linking all mall retailers to one loyalty program. The mall could drive Personalized Marketing to create just the right offer to draw customers to the mall, based on past purchases and also on other External Data including Weather, Local Events, and even Social Media posts. Developing a mall wide loyalty program is by no means new…we’ve seen it in retail for years! But add a Personalized Marketing program to it and the effectiveness could go up significantly, driving traffic at relatively low cost.
Do you have a retail strategy to help drive traffic? If not, let’s discuss it!
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