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Retail Traffic

Erin G. hits the mall at least once a month.

To her chagrine, most times it takes her 30 minutes of cruising the parking lot before she secures a parking space and exits her vehicle. It can be even longer during the holiday shopping season.

If it's dark outside, she makes a note of how well lit the parking lot is as she walks to the mall's entrance.

Once inside, Erin looks for the information desk to ask the mall concierge for assistance in purchasing a gift card, locating a wheel chair accessible entrance or directions to a particular store.

All the time she is watching, walking and listening, she's making mental notes. If mall staff just points, don't smile, don't offer helpful explanations or make eye contact, those are all red flags.

Erin is not your typical customer. She's a mystery shopper that's been hired by the mall manager to evaluate the shopping centers' ambience, services and operations.

For decades, mystery shoppers have helped retailers by recording snapshots of businesses from the customer's perspective. They offer assessments and tips on how to improve customer service. They help companies hone in on target markets and figure out ways to differentiate themselves from the competition.

Now mall owners themselves are increasingly turning to the mystery shopping firms that serve their tenants in order gauge the level of services at the mall-level. It's a way to fine-tine services malls are employing meant to distinguish themselves in an increasingly crowded retail real estate landscape.

The challenge for the mall owners, with properties that are mirror images of competitors' — with similar anchors, specialty stores and food court offerings — is to position centers as destinations where shoppers also want to spend time with friends and family.

With the assistance of mystery shopping firms, mall developers are trying to better understand what customers like and don't like about the experiential aspects of their properties as guiding points to make changes.

For example, why is it that Starbucks customers drop $4 for a “Grande Latte” rather than walk next door to grab a less expensive cup of coffee from Dunkin Donuts, even if they think Dunkin Donuts' coffee tastes better? (The answer: “It's more sexy to go into a Starbucks than a Dunkin Donuts,” says Jill Donnelly, director of the shopping division for Customer Service Experts.)

Industry observer, Paco Underhill, author of Call of the Mall, sees the use of mystery shopping services as reflective of the broader trend of retail real estate owners shifting from being merely landlords to being “place makers.”

“The fact that they've been spending on mystery shopping services shows that they recognize the importance of the quality of service at those customer contact points,” says Underhill. This is a clear break from the past.

“Malls haven't been big spenders on research services … they've been just sitting back collecting rent,” he says.

The enhanced use of mystery shopping services, Underhill says, has been fueled by fierce competition from existing malls encroaching upon each other and a growing number of consumers shopping via the Internet.

“Nobody is building shopping centers to service a new audience in 2006,” says Underhill, “They are building to steal somebody else's audience.”

The takeaway of a mystery shop is to show mall management how to maximize the shoppers' time spent at their center.

Orchestrating the shoppers' visit, mapping what they see and the order in which they see it, timing when they are greeted by a mall concierge and navigating the food court all contribute to the overall customer's experience. “Disney is a master at this kind of thing,” says Donnelly, referring to a concept she called touch-point mapping. “It's about engineering the customers experience and not just letting it happen.”

While customers may set out for the mall with a specific purchase in mind, she says, it is the sensory experiences while shopping that is long remembered.

Today, it is more important than ever, Donnelly says, that malls connect with their customers on a sensory and mental level to entice their customers to spend more of their money and leisure time at their shopping centers.

“It permeates through not only the customer but, from a leasing standpoint it creates value for the company,” Donnelly says.

The mystery grows

The Mystery Shopping Providers Association (MSPA) backs up Underhill's assertion and says it has seen an increase in inquiries recently from shopping center owners and managers.

John Swinburn, executive director of the MSPA cites the number of calls has increased approximately 20 percent over the past few years. Sixty percent of that increase, he estimates, has come in just the past year.

“I receive a number of calls regularly,” Swinburn says. “It's due to increasing competition.”

Engaging one of its 150 member companies worldwide, MSPA's Swinburn says, can help retail developers and mall managers answer two questions: are the tenants getting the support they need and is the customer getting the experience the tenants want them to have?

However, some companies seem guarded about the practice and declined to discuss whether they used the service and if so, how much they were relying on them.

“It's considered proprietary,” says Les Morris, manager of corporate relations for the Simon Property Group. “It's a subject we would not like to talk about.”

Most commonly, developers are looking to distinguish their properties from competitors through offering a larger menu of in-mall services and beefing up customer service. Other factors owners seek feedback on include the mall signage, overall cleanliness of its center and restrooms and parking spaces, according to Michael Hardy, a senior partner with Farmington Hills, Mich. — based Imyst.

“It comes down to the individualized experience the mall wants the customer to have,” Swinburn says.

For example, Annapolis, Md. — based Customer Service Experts conducted a mystery shop for an undisclosed national developer to assess its malls' operations, including restroom cleanliness and food court offerings. It also sought to gauge the overall ambience — the music and smells of the center.

“In the mall, it's a sensory experience,” Donnelly says, “You remember what you felt like, what you saw and what you smelled.”

To help distinguish its brand among consumers, Westfield Group also engaged the shopping division of Customer Service Experts to evaluate its services and what customers felt about their shopping centers.

According to Donnelly, the Australia — based limited property trust, wanted to ensure consistency of services offered at all its 59 U.S. centers.

The 175-question mystery shopper evaluation, developed by Customer Service Experts, with direction from Westfield, examined key factors that enhance a consumer's shopping experience.

Among the items examined: Did Westfield centers have comfortable benches, baby strollers and balloons for kids available, all in Westfield's trademark red? It also asked shoppers if mall employees' red jerseys matched.

Donnelly says, the mystery shops are designed to address any real or perceived shortcomings of the clients' shopping centers' services or offerings.

In addition to Westfield, Customer Service Experts says it has also conducted surveys for Pyramid Companies, Simon Property Group and Rouse Co. (before it was swallowed by General Growth Properties in 2004).

Matter of technique

For owners to accurately assess the performance of their properties and glean actionable data to take corrective steps they need to ask the right questions.

Jan Pelletiere, president of Jancyn Evaluation Shops, says the mystery shopper cannot ask customers blanket questions such as, “Is there enough food?”

Pelletiere explains, the question should be phrased in terms of how the shopper feels. “Do you feel there is enough customer service?” she emphasizes. “Not, is there enough customer service?”

The 26-year-old, San Jose, Calif. — based mystery shopping firm conducts 12,000 mystery shops per month.

Some firms add that it's also important when evaluating shopping centers not to separate out perception of the property from customer satisfaction with the stores that are part of the property.

For its clients, Imyst includes a customer service questionnaire that also encompasses evaluating individual stores inventory, helpfulness of staff and customer wait time.

The stores' level of customer service, Hardy notes, impacts the consumers' perception of the mall itself.

“If you have stores that aren't treating their customers well, the consumers are going to stop coming to the mall; not just those particular stores,” Hardy says.

A mystery shop assessing a mall's services ranges from $5,000 to $10,000. The final price depends on the frequency of visists and depth and length of the questionnaire.

Additional cost drivers, according to Customer Service Experts, include the number of locations and stores within each shopping center.

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