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The Spread of Smartphones Forces the Evolution of Mall Marketing Efforts

The Spread of Smartphones Forces the Evolution of Mall Marketing Efforts

The shopping center industry is fast nearing a point when offering customers mobile services enhancing the in-mall experience will no longer be considered a perk, but will become a necessity.

When Simon Property Group, the nation’s largest regional mall owner, launched a smartphone app for its portfolio last fall, the move seemed groundbreaking. Less than a year later, almost every mall owner in the country has either unveiled its own app or is getting ready to do so.

For example, General Growth Properties, a Chicago-based regional mall REIT, launched an app at 150 of its properties last November. The app allows members of General Growth’s shopping Club to access mall information and updates on mall events, discounts and sales from Androids and iPhones. Users can also play a game for a chance to win prizes from the mall owner.

The Westfield Group, a Sydney, Australia-based mall owner that operates 55 centers in the U.S., has been offering a mobile app throughout its portfolio since last year. Pennsylvania Real Estate Investment Trust (PREIT), a Philadelphia-based REIT, made an iPhone app available to customers at 40 of its centers in June. PREIT is currently working on delivering an Android version of the same app.

Meanwhile, CBL & Associates Properties Trust, a Chattanooga, Tenn.-based REIT with 148 centers in its portfolio, and Glimcher Realty Trust, a Columbus, Ohio-based REIT that owns 27 malls, are both in the process of perfecting their apps before launching them portfolio-wide.

Plus, there might soon be a joint mobile app from members of the Shoptopia Network, an integrated media platform whose members already include Forest City Enterprises, a Cleveland, Ohio-based mall owner; Washington, D.C.-based mall owner Madison Marquette and Glimcher Realty Trust. The network attempts to combine online, mobile and social networking communications channels in connecting customers with shopping centers in their area. The app would likely provide custom information for each participating center, including directories and links to Facebook and Twitter, according to Stephanie Shriver-Engdahl, director of advertising with Forest City. Shoptopia members would like to launch the app within the next three months.

The trend shows that rolling out mobile mall apps has become imperative in a world where mobile shopping and mobile research are fast becoming part of everyday life. Today, more than 33.3 million U.S. consumers engage in shopping-related activities using their mobile devices, reports Experian Simmons, a Costa Mesa, Calif.-based research firm. Those figures are bound to rise with the advent of smartphones, which already make up 40 percent of all mobile phones in the U.S., according to data compiled by the Nielsen Co., a New York City-based research firm. Given that U.S. has about 302 million mobile phone users in total that is equivalent to more than 120 million potential shoppers.

“The selection of technology is growing and it’s almost that the customer expects you to have a mobile app or a mobile Web site,” says Jessie Fausett, director of marketing with Glimcher Realty Trust. “And when they go to the mall and don’t find it, they say, ‘I can’t believe so and so doesn’t have it.’”

What’s on offer

The most common features the mall mobile apps offer right now are similar to what customers can find on mall Web sites: hours of operation, listings of available retailers, property maps and tenant phone numbers.

Another standard feature is help with parking—at many properties, shoppers can either write down the locations of their parking spots into the app or take pictures in order not to waste time searching for their cars after their visits are over.

“We did a lot of research and found out that it was most important that the app enabled people to find what they were looking for,” says Alan Cohen, executive vice president of marketing with Westfield. “That was definitely something that was very valuable.”

Other popular capabilities involve giving shoppers the opportunity to make restaurant reservations directly from apps or to access coupons and discount offers at participating retailers. Many mall owners also want to give customers the option to purchase mall gift cards or check balances on existing gift cards on the apps.

PREIT, for example, is currently working with American Express to add a gift card balance reader to its app by the start of the holiday shopping season.

Westfield, meanwhile, has taken smartphones’ search capabilities up a notch by partnering with Google and allowing customers to search its malls for specific products using keywords. The searches can be organized according to price or according to retailer. Customers can also limit search results to one item per retailer.

“If you think about it, when somebody is going to the shopping mall, first and foremost they are looking for something,” says Cohen. “And you want to make it easy. It’s very clear that customers like using Google as a search engine. And this takes some of the benefit of what they do online at home and brings it to the shopping center.”

Going forward, PREIT would like to add similar functionality to its app, according to Judy Trias, vice president of retail marketing. The mall owner has already been in discussion with several technology companies about it.

“I think that’s a really terrific feature, we are just being cautious at this time because we don’t want to launch anything until we know that it will work for the consumer,” Trias says.

All about service

While traditional marketing techniques focus primarily on driving shopper traffic to the mall, mobile mall marketing is centered on the overall customer experience. Glimcher, for example, is currently piloting a smartphone app at its Polaris Fashion Place, a 1.5-million-square-foot mall in Columbus, Ohio, before rolling out the program across its portfolio. As part of the pilot, Glimcher partnered with movie theater chain Rave Cinemas to allow its shoppers to check movie times and purchase movie tickets to Rave venues through the app. What’s innovative about that is the fact that Rave doesn’t actually operate a theater at Polaris Fashion Place. It does, however, operate multiple movie theaters in Ohio, including in Columbus.

“Guests sometimes don’t realize that a movie theater that’s near your property doesn’t belong to it,” notes Fausett. “It’s a secondary experience that we just want to make as easily accessible to our guests as possible.”

CBL & Associates is still working out the details on its own app, which it hopes to launch in time for the holiday shopping season, but it has partnered with photo vendor Cherry Hill Photo Enterprises Inc. to deliver a special Santa app to its youngest customers this Christmas. The app will allow children to find Santas at the closest CBL malls, send Santa letters, make wish lists and track Santa’s movement on Christmas Eve, according to Barb Faucette, vice president of mall marketing with CBL.

“What’s important to us is that the experience the child has is not only with the visit to Santa [at the mall], but also with the follow-up,” says Faucette. “If there are two children who are siblings and they both send letters to Santa, they will get different responses back. That experience is going to be a critical part of this holiday season.”

Meanwhile, CBL’s own mall app, once launched, will offer information on store location and operating hours, as well as special offers and promotions.

Brave new world

Going forward, mall owners would like to tie social networking sites into their mobile apps as much as possible, allowing shoppers to access their profiles and make postings directly from the apps. Westfield, for instance, plans to provide direct links to Facebook and Twitter within the next two months.

“The people who use Facebook heavily are a very involved group of customers, so we are using it more and more as a marketing vehicle,” explains Cohen. “We know the big Facebook users are very much the key influencers and will tell others about their experiences.”

The industry is also starting to use Quick Response (QR) codes, both to promote their apps with collateral inside their centers and to give shoppers access to extra functions—such as checking the balance on their gift card by scanning in the code on the back of the card, according to CBL’s Faucette.

In June alone, 14 million mobile phone users in the U.S. scanned QR codes into their smartphones, according to comScore, a global firm specializing in digital business analytics. Of that number, 39.4 percent used the feature for shopping purposes from inside a specialty store and 24.5 percent used it inside a supermarket.

Mall and shopping center owners are understandably trying to take advantage of this opportunity. In August, Santana Row, a 1.5-million-square-foot mixed-use center located in San Jose, Calif. and owned by Federal Realty Investment Trust, ran a week-long QR promotion, with more than 20 of its tenants offering customers shopping incentives and discounts through QR codes posted around the center.

The incentives included a “buy one, get one free” offer at frozen yogurt shop Pinkberry, complimentary makeup touch-ups at Atelier Aveda and $1 iced beverages at Peet’s Coffee & Tea, among other things.

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