Why traditional shopping centres don’t cut it anymore.
The traditional mall has been an intrinsic part of American life for the better part of a century, but the latest reports hint that the glory days are over. Mall vacancies increased 7.9% from 7.8% last quarter, and construction remains slow with only 1.4 million square feet of new shopping center space completed during the second quarter.
At the peak of the shopping mall boom, 140 were being built every year in America and they have more retail floor space per capita than any other country. It’s this oversupply, mixed with a lack of innovation, that has led to the dire prediction that half of American shopping malls will die by 2030.
Despite the apparent downward trends, I’m a big believer in the power of shopping malls to bring communities together, help retailers thrive as part of an ecosystem, and to offer amazing shopper experiences. But there is definitely work to be done to ensure they succeed both here and overseas, starting with these four tips:
1. Innovate now.
Business as usual won’t cut it anymore. However, 90% of sales still take place in bricks-and-mortar stores so there is plenty of room for innovation where malls are concerned.
Westfield have jumped head first into the innovation game with their Labs division welcoming 10 young retail companies into the fold. The aim? To drive business connections and pilot programs. In the mix are Happy Returns (they facilitate e-commerce returns to nearby malls who would love the extra foot traffic), interactive mirror manufacturers, retail chat bots and more.
They’re thinking outside the box and heavily investing in digital technologies to meet what their ‘How We Shop Now’ report found to be the two key shopper needs: speed and convenience.
Also on the creativity front this month, we’ve seen retailers drive foot traffic by capitalising on the popular Pokemon Go craze. While it’s a short term tactic (I don’t see the game being a stayer) it raises the interesting idea of increasing foot traffic by integrating location-based games and AR (if in an authentic brand manner, of course).
2. Offer experiences. Build communities.
I’ve previously talked about the importance of treating your store as another media channel – an idea coined by Doug Stephens, the Retail Prophet. The same goes for mall operators. No longer just a place to shop, the mall has evolved into something more dynamic.
“Shopping centers and the physical retail experience is becoming much more experiential. People want to have experiences when they go out. They want to experience restaurants. They want movie theaters. They want that kind of all-in aspect. They want the aesthetics and the look to be something that is engaging and appealing to them.”
The mall is no longer just about the shops in it; it’s a holistic community resource with added amenities like premium restaurants, gyms, pop-ups and medical services that attract members of the community for a fuller experience.
3. Embrace the pop-up
Pop-ups are a great concept for both online retailers looking to build awareness and engage customers in a location centric way, and malls trying to deal with store vacancies.
Integrating and marketing a pop-up strategy would be hugely beneficial for malls in tackling this problem and positioning them as exciting, fresh and innovative.
A recent study by Q&A Research and Consultancy tested the “mall within a mall” concept by developing 15 shop-in-shops, which continually changed over the course of a year. Overlaying this with technology to enhance the consumer experience resulted in a widely successful event-based selling program (with little time for vacant storefronts!).
4. Get optimised for discovery
Shoppers want convenience more than anything else, so being able to easily locate what they want within a mall is crucial. We promote the concept of Store Discovery Optimisation to Booodl retailers, which means making sure a retailer is found by a shopper searching location centrically e.g. ‘Jeans in Bondi’.
This is applicable to malls when shoppers are already within the walls and looking to purchase. However, the concept of Mall Discovery Optimisation is also key i.e. driving potential shoppers from nearby areas into the mall to find the right store selling what they want.
This is the problem we’re tackling at Booodl by collecting and organising store data (e.g. brands and products sold) and mall data, then overlaying this with an intelligent search engine that makes it easy to find the right store.
We truly believe in the importance of physical retail – it’s more convenient for shoppers, better for the world and better for retailers’ bottom lines. Malls play a vital role in the physical retail ecosystem. Can you imagine a future with empty high streets and shopping centres, and everything being delivered by drones? That’s not what we want and being optimised for discovery is the first step.
To summarise: invest in technology, create experiences, build loyal communities and increase discoverability. Do it right, and do it now, and shopping malls will continue to play an essential role in local communities.
Start by tackling discoverability and register with Booodl today.
This blog post was originally published by Booodl CEO & Co-Founder, George Freney, on LinkedIn.