One constant piece of commentary I heard at ICSC's RECon show in May was that retail property owners are trying whatever strategies they can think of in attempts to boost traffic at their centers. They are increasing the number of events. They are looking at traditional marketing media like local radio and television stations and newspapers. The more experimental owners are trying email blasts, Tweets, texts or setting up Facebook pages for individual shopping centers.
In that "Try Anything and See What Works" vein, Foothills Mall in Tucson, Ariz. is conducting a one day experiment by displaying live models in retail store windows.
Marketing Director Mary Stahl says Saturday's test seems to be working. "We're all trying to find ideas and ways to drive traffic into the mall and you have to think out side the box right now."
Styles for Less store manager Belinda Pacheco hopes to see more mall promotions like this. "It brings people in. It shows we're trying to do different things to try and get their attention."
Stahl say it's an expansion on an idea from retail stores in Chicago who report a 30% increase in foot traffic. "Our main objective is to let people know that it's a wise move to come to this mall and spend their money. They're going to get the best value."
The tactic is sure to get some attention. It already has, clearly. The question, however, is whether doing things like this brings in people that are actually going to spend money at a property or whether it just draws people that have nothing better to do than gawk at models. I don't see, for example, how having live models in a mall gets the message across that shoppers "are going to get the best value" by shopping at the property.
Events and publicity stunts, to me, seem like a shot in the dark, especially in this economic climate. People that don't have money to spend but are looking for something to do can be drawn in by mall events. It will boost traffic, but not necessarily do a thing to help retailers get better sales numbers. In the end, it seems like owners need a more sophisticated and targeted approach that delivers not just masses of people but specifically engages consumers looking to spend money. That, ultimately, is what tenants need. And the ability to deliver paying customers can become a selling point for a landlord that separates your center from the property down the road, which does not have this capability.
Here are some other news and notes on retail and retail real estate from around the Web today.
- The Financial Times Alphaville blog took a good look at the way S&P will alter its method for rating CMBS bonds. The changes could result in $235 billion in CMBS bonds losing their AAA status. Henry Blodget also noted the potential downgrades at the Business Insider.
- The Wall Street Journal's Heard on the Street commentary highlighted the potential damage commercial real estate may yet wreak on bank balance sheets. It noted that some banks have accounted for no hits to their commercial real estate loan portfolios despite heaps of evidence of massive distress in the sector.
- Seeking Alpha asks whether Sears Holdings should consider becoming a REIT.
- ICSC published its latest Retail Real Estate Business Conditions report. Among other things, the report highlights the jump in the U.S. personal savings rate.
- One of our sister publications, Business Finance has a look at sale-leasebacks as a strategy for firms looking to monetize their real estate holdings.
- Our Chart of the Week looks at the latest Moodys/REAL commercial property index numbers for retail. The retail index fell to 1.43 in the first quarter—the lowest level since the fourth quarter of 2004. (A score of 1.00 represents where prices were as of the fourth quarter of 2000.) The index peaked at 1.68 in the third quarter of 2007. In the five quarters following the peak the index fell by an average of 0.02 points per month. The drop from the fourth quarter of 2008 to the first quarter of 2009, however, represented a 0.13 point drop in the index.
- Our online feature looks at private equity's checkered record in buying out retailers.