Retail Traffic

New Directions

Mall marketing managers shift emphasis from driving traffic to generating sales.

Until recently, mall marketing managers had been focused on creating a sense of community. With tenants struggling to make rent payments as a result of falling sales, there is a newfound emphasis on translating mall visits into actual sales.

This has altered the kinds of campaigns being mounted at regional malls. In the past, when the focus was on prolonging visits, managers held events like fashion shows for women, concerts for teenagers, car shows for men and cartoon-character-themed events for children. These events, even when co-sponsored with corporations like PepsiCo, Coca-Cola or Sprint, cost thousands of dollars. Mall owners didn't mind, convinced that it was part of making consumers feel like their local mall was a place to hang out and linger as long they wanted. In the long run, by fostering loyalty, these efforts would pay off by creating customers for life for a mall.

That view has now changed. “People are much more planned now about their purchases and the difficulty for shopping centers is how to keep their audience,” says Kelly Georgetti, a retail marketing expert with Marketing Arm, based in Dallas. “While concerts are great, I think that you are seeing a lot more interactive events, where you get consumers to participate in the process.”

Last holiday season, 25 malls across the U.S. allowed Nintendo to set up temporary kiosks where shoppers could play Wii Music, Wii Sports and Wii Fit games for free. Nintendo got to promote its brand. But the mall owners also got a chance to help their electronics retailers sell more Nintendo products.

Marketing departments still feel it's paramount to project the idea that malls are part of local communities. This summer, there will still be plenty of concerts — Simon Property Group, the Indianapolis-based giant with 246 million square feet of retail space in its portfolio, has just launched its annual dTOUR Live!, which will bring free performances by teen bands Hoobastank, Shwayze and Forever the Sickest Kids to 11 of its properties. Meanwhile, CBL & Associates Properties, a Chattanooga, Tenn.-based retail REIT, will hold “American Idol” auditions at five of its malls. “We have people that will drive 100 miles to participate in something like that,” says Barb J. Faucette, vice president of mall marketing with CBL. She estimates that events can attract from 500 to 1,000 visitors.

Many of mall owners' new marketing initiatives have a more thoughtful approach to how in-mall events can help tenants, says Traci Weber, senior vice president of marketing with Macerich. “Getting people into our malls is really only half the equation — getting them to shop is the real challenge,” she says.

That has meant efforts are now organized around retailers' promotions and store openings. From July 27 through Aug. 13, Macerich is planning a denim drive at most of its 72 properties to support local charities. At the end of the two-week period, there will be a Great Denim Event, during which volunteers will be able to help package the donated jeans for delivery. Participants will get expert advice on which styles of jeans best fit their bodies. In many centers, advice will be provided by employees of Gap, a major tenant.

These kinds of events often feature free care bags highlighting goods from center retailers. “Anecdotal information from our retailers tells us that women are going in and using coupons and asking for specific items that have been featured in these events,” Weber adds.

These campaigns tend to be very cost-effective — there is usually no stage to be assembled, no equipment to be rented or animated characters to pay. The owner spruces up the common area, serves as a liaison for the charities that benefit from the shoppers' donations and sends the word out to the community. The rest is up to the retailers.

Come together now

Part of what makes these campaigns possible is the increased cooperation from the tenants. While mall owners and retailers have always tried to work together to improve shopper traffic and sales, when times were good, retailers were often unenthusiastic about participating, says Faucette.

“I've been in the shopping center industry for 25 years and I've never seen more [cooperation] between retailers and landlords,” says Faucette.

Macerich, for instance, has begun working with the Food Network and upscale kitchen supplies seller Sur La Table at Kierland Commons to produce cooking demonstrations by famous chefs like Curtis Stone. At the events, Macerich promotes Sur La Table products with special coupons. When Stone was a guest at Kierland Commons this year, next day sales at the store jumped by $1,200.

Forest City Enterprises, a Cleveland-based firm with 14.6 million square feet of retail space in its portfolio, has been holding events at its 57 centers that were the result of partnerships with at least one key tenant. Last fall, Forest City worked with Macy's at the Shops at Wiregrass in Wesley Chapel, Fla., to bring makeup artists from Estée Lauder, Clinique and Lancome to give makeovers, says Nancy McCann, senior vice president of marketing with the firm. As part of the promotion, Macy's provided discounts for shoppers to buy cosmetics at its stores. At another property, JCPenney invited fitness experts to talk to mall visitors. The store then had a chance to promote its new line of exercise clothes.

When Forest City held an event to benefit the American Cancer Society (ACS) at one of its malls, visitors could purchase a tile with their first name on it and proceeds went to ACS. The center's retailers donated small goody bags to encourage shoppers to come by their stores. The event allowed the center to build a stronger community connection, says McCann. It also drew attention to the center's tenants by directing shoppers to participating stores.

Glimcher Realty Trust, a Columbus, Ohio-based REIT with a 21.7-million-square-foot portfolio, has instituted a similar program in recent years. “Earning for Learning” runs during the back-to-school shopping season and allows anyone who spends $1 to nominate a local school as a recipient of a monetary award from Glimcher. The school that racks up the highest number of points per student wins the grand prize. At Polaris Fashion Place, a 1.5-million-square-foot mall in Columbus, the winner will get a total of $7,500. Glimcher awarded more than $280,000 to local schools last year.

Cheap thrills

Programs today tend to be less extravagant than in the past. Instead of free concerts, many centers have free movie nights, which are less expensive and steer shoppers toward the center's restaurants for “dinner and a movie.” There have been more events featuring partnerships with charities. Although there's still room for showy events like celebrity appearances, marketing departments try to make these as cost-effective as possible. Last year, superregional malls spent an average of $0.08 per square foot on promotions and special events, down from $0.21 per square foot in 2004, reports ICSC.

In July, CBL's Fayette Mall, a 1.2-million-square-foot regional center in Lexington, Ky., invited shoppers to meet and get an autograph from Mario Lopez, the current host of “Extra.” Lopez attracted more than 600 guests, with stores like Sephora, geared heavily toward women shoppers, reporting a 15 percent increase in sales, says Faucette. The event was virtually cost free for CBL. A local television station, WTVQ, arranged the appearance and ran promotions worth about $25,000 in free publicity.

“As an industry, we are leaning more toward that, putting on these events at little or no cost,” says Faucette. “We may do the press release and media promotions, but in general, the partners we work with put on the activity.”

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