Mall Marketing Managers Shift Emphasis from Driving Traffic to Generating Sales (8/4)
Aug 4, 2009 2:45 PM, By Elaine Misonzhnik
(This is the first of a two-part look at mall marketing efforts. This feature looks at what marketing managers are doing inside properties. A second story will examine how companies are embracing social networking and other online technologies to promote retail centers.)
Up until about a year ago, mall marketing managers had been focused on creating a sense of community. Today, they have taken a new direction. The emphasis is now firmly on driving sales.
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. It's a return to focusing on malls' primary reason for existence. The point is not to create public gathering places. It's to provide venues where retailers can profit.
This has altered the kinds of campaigns being mounted at regional malls. In the past, when the focus was on prolonging visits rather than driving sales, mall managers focused on events like fashion shows for women, concerts for teenagers, car shows for men and cartoon character themed events for young children. These events, even when shared by sponsoring corporations like PepsiCo or Coca-Cola or Sprint, cost thousands of dollars to put on. But 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 however long they wanted. Malls should be a places where shoppers feel welcome even if they didn't spend a single cent. In the long run, by fostering loyalty, these efforts would pay off by creating customers for life for a mall and its tenants.
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 the Marketing Arm, a Dallas-based marketing firm. "While concerts are great, I think that you are seeing a lot more interactive events, where you get consumers to participate in the process."
For example, last holiday season, 25 malls across the country allowed Nintendo, the producer of video game consoles, to set up temporary kiosks at their premises 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.
To be sure, mall 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 event, which will bring free performances by teen bands Hoobastank, Shwayze and Forever the Sickest Kids to 11 of its properties. Macerich Co., a Santa Monica, Calif.-based REIT, has been putting on free concert performances at least at one of its centers, the 450,000-square-foot Kierland Commons in Scottsdale, Ariz. And CBL & Associates Properties, a Chattanooga, Tenn.-based retail REIT, meanwhile, 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 corporate mall marketing with CBL, who estimates that the events can attract anywhere from 500 to 1,000 visitors. (CBL also has a campaign called Treat Yourself that is designed to encourage customers to splurge on themselves.)
But many of mall owners' new marketing initiatives have a more thoughtful approach to how in-mall events can help tenants, aside from drawing new foot traffic to the property, 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 notes. "Once we get people in, we want to give them an incentive to shop."
That has meant efforts are now organized around retailers' sales promotions and store openings. For example, from July 27 through Aug. 13, Macerich plans to hold a denim drive at most of its 72 properties to support local charities. At the end of the two-week period, Macerich will host a Great Denim Event, during which volunteers will be able to help package the donated jeans for delivery. (For example, it will host one such event at the Danbury Fair Mall.) However, simultaneously participants will get expert advice on which styles of jeans best fit their bodies. In many centers, that advice will be provided by employees of Gap, a major tenant.
These kinds of events, which are part of the REIT's "Get Together and Give" series, also often feature thousands of free care bags highlighting goods from the centers' retailers. Since the program was launched fairly recently—in 2008—Weber says she doesn't yet have solid data on how much they impact sales. "But 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," she adds.
The additional benefit of this new brand of marketing campaigns is that they tend to be extremely cost-efficient—there is usually no stage to be assembled, no special equipment to be rented, no animated characters to pay. The owner spruces up the center's common area, serves as a liaison for the charities that benefit from the shoppers' donations and sends the word out to the community, often through free-of-charge communications channels like Facebook and Tweeter. The rest is up to the retailers.
