The Shopping Mall: Retail Redux
A fixture in the retail landscape for decades, the era of the shopping mall – according to some pundits – is now coming to a close.
Personally, I believe the rumors of shopping mall death are greatly exaggerated. Rather I believe we are on the cusp of an era of reinvention of the shopping mall.
The mall of tomorrow will offer consumers convenience and community, as well as a place to shop. It will feature different kinds of anchors and different tenant mixes, and more space set aside for non-retail uses. Envision environments that place as much emphasis on recreation -- everything from skate parks to jogging paths to entertainment complexes -- as well as retail, with lots of added amenities and ambience.
This new look and feel of the mall will underscore retailers’ efforts to attract and retain a new breed of customer -- efforts that can be aided through technology.
Mall retailers are already employing new approaches to attract today’s consumers and those of tomorrow. Retailers -- buoyed by the affluent Baby Boomer generation over the past few decades, which is now moving into retirement and spending less -- must now focus on reaching new generations of consumers who are outside traditional means of influence. They aren’t accessible via traditional advertising methods (they don’t read newspapers and don’t watch commercials thanks to TiVO). And due to the ubiquity of the Web and mobile phone, they have more retail choices than ever and are highly educated as to their options.
Mobile marketing is an important tool to target these increasingly sophisticated and mobile consumers with customized messages, coupons, and promotions that encourage them to interact with the store environment, helping retailers strengthen brand and customer loyalty and help drive revenues. Customer loyalty still exists, but retailers must provide the right combination of incentives and service to go beyond just meeting -– to anticipating -- consumers needs to keep them interested and engaged.
Convenience is king, but when it comes to soft goods, customers still want the option to see, touch and try on in store. But they don't want to go on an expedition to locate a pair of shoes or handbag. They want to compare their options online at home and then through integration with brick and mortar stores, leverage location-specific data to identify where that product can be found, experienced, and purchased. Cross-channel initiatives enable retailers to promote a consistent and rewarding brand experience across whatever channel(s) customers choose.
Location-based services on smart phones will be leveraged increasingly in the future, with malls trying to attract customers by buying services on networks to contact customers who have opted into the “mall app”. (Yes, there will be an app for that!)
Shopping has always had a heavy social and emotional quotient; savvy retailers will continue to support the mall shoppers’ need to connect with other like-minded consumers virtually via social media where images can be exchanged with friends and family for immediate feedback.
In the midst of an economic downturn and global credit crunch that is expected to have a long-term sobering effect on consumer spending, retailers are finding inventory management more essential than ever, and key to surviving and thriving in the mall. Expect to see continued adoption of consumer-centric merchandising, where consumer demand dictates assortment and space allocation decisions.
And while some level of mark downs are key to stimulating sales, unchecked near-continuous markdowns can erode profits. In the presence of fewer sales and slimmer margins, markdown optimization enables retailers to apply an effective markdown strategy to better manage inventory and margin risk. As well, in a down market, retail theft and fraud rises. Mall retailers can keep merchandise – and profits – from walking out the door by shoring up loss prevention efforts.
Indoor, outdoor, horizontal or vertical -- no matter what physical form the new mall takes, the foundation for its success will be innovation and technology. The new mall -- while a work in progress –- is alive and well.
Posted by Diane Neaven, Director of Product Management, Epicor