A lot of talk has been given to the future of out-of-town shopping destinations of late. Once a symbol of U.S. culture, the shopping mall is now viewed by many as a retail format in decline – why?
The problem is certainly not due to retail interest. According to the International Council of Shopping Centers, the mall segment had 94.2% occupancy rate at the end of 2014 – the highest since 1987.
However, not all malls are created equal; over the past 8 years, venues specialising in luxury brands have seen their asset value double, while those with a focus on fast fashion have declined slightly.
Consumers aren’t developing more expensive tastes, however, as the Financial Times notes. In actual fact, fragility of the U.S. economy means that those on lower incomes feel less inclined to spend, while wealthier shoppers have increased their average purchase value.
These varying fortunes divide the crowd when it comes to new investment. The recent announcement of a 200-acre ‘megamall’ in Miami has been criticised as an unnecessary investment by many retail experts – however, the destination’s ambitious plans reveal an interesting insight into the potential future of shopping malls.
Rather than creating a standalone retail destination, Miami officials want to incorporate entertainment features such as an artificial ski slope, a Legoland attraction and even live sea lions.
These might sound a little over the top, but these plans recognise one important thing: shopping centres are a social destination.
The reason why some shopping malls are suffering today isn’t due to consumers turning against the format. It’s more a case that they are out of date and trying to gear marketing and operations around a consumer who doesn’t exist anymore.
Gaining greater understanding of how shoppers behave is critical to the future of shopping malls. Knowing not only the volume of visitors but the duration of their stay, their route, which facilities and services they use, and which marketing activities they respond to builds an accurate, three dimensional view of how and why people are visiting the mall.
From there, property managers and owners can make changes to increase the value of those visits.
This could be changing the position of flagship retail outlets – a recent report revealed Apple stores increase mall sales by 10% – or experimenting with marketing events. For example, there has been a movement in the U.S. towards independent, home grown businesses, so opening a temporary craft beer outlet or artisan restaurant could boost shopper spend.
FootFall’s Site Analytics for Shopping Centres is a dedicated solution to help mall owners and managers understand consumer behaviour in real-time, and make profit driving decisions based on those insights. Contact us to find out more.