Does the American Shopping Mall Have a Second Life? | Adweek Does the American Shopping Mall Have a Second Life? | Adweek
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Does the American Shopping Mall Have a Second Life?

Retailers have to customize the experience


JCPenney, Dixie Square Mall, Harvey, Ill.

Not Dead Yet
From a brand and marketing perspective, the mall situation seems far more hopeful. The reinvented mall is merely in need of its own brand identity, featuring activities like ice skating and bowling plus retail stores carrying unique private label products, says Raj Kumar, partner in the retail practice of consultancy A.T. Kearney. “We know cookie-cutter, middle-of-the road shopping environments don’t cut it anymore,” he says.

Stores making a home in these hubs will also have to change their way of doing business. “Customers need to feel at home in the retail space such as they do at outfitter REI, which offers products, staff, décor and advice tied to outdoor activities,” explains Kumar. “Retailers also have to customize the buying experience to make you feel special—such as Lowe’s, which keeps a database of your purchases to help you shop.” The winners in the space will be specialty stores with robust websites that can respond quickly to a very specific target audience, Kumar predicts.

The National Retail Federation’s 2012 Shopper Experience study supports that. Four out of five purchases are still made in physical stores, according to the study, but shoppers are more demanding.

“Armed with tools to access data at any moment, they are poised to buy and expect retailers to be ready for them,” the study points out. To keep customers coming back, it advises, retailers must recast stores as places for discovery and interaction with products, where employees assist in the decision-making process and shoppers enjoy instant gratification.

Also encouraging is research from Piper Jaffray which shows that teens prefer to shop in-store, especially for clothing. A study released in April indicates that about three-quarters of teens would rather shop in-store than online. Paradoxically, it also shows that a majority of teens are doing much of their shopping online. The upshot: There’s a ripe opportunity for savvy mall retailers to snag those texting teens.

But they still have a ways to go.

“No one is ready to abandon the mall concept entirely,” says Peter Breen, managing director at the Path to Purchase Institute. “But the big national chains haven’t devoted much capital to any major real estate transformations. The emphasis for most of these dinosaurs has been on opening digital channels, with the logic that if you can’t coax the shoppers out to the mall anymore, then go find them at home.”

Mall mainstay JCPenney has become a veritable poster child for the shopping center’s struggle to adapt. The company last month replaced CEO Ron Johnson with his predecessor, Mike Ullman, after Johnson’s ambitious turnaround efforts—no coupons, stores within a store—harpooned sales. Survival, rather than innovation, seems to be the chain’s current strategy.

In the meantime, the hulking, 25-year-old Cincinnati Mall is holding on by its fingernails, with three-quarters of the space sitting empty. The owner hopes to sell about 15 percent of the retail space for a youth sports complex, but government red tape is slowing down the deal.

Meanwhile, the facility was rebranded in late February as the Forest Fair Village. Kohl’s, Burlington Coat Factory and Bass Pro Shop Outdoor World have kept their doors open, with Bass continuing to offer in-store classes and outdoor-themed activities along with hunting and fishing gear. “We don’t call ourselves a mall anymore,” says Karla Ellsworth, general manager of Forest Fair. “We are transforming into an indoor family activity and shopping center. It will be a place where parents can browse for clothes or shoes while their children are taking hockey or gymnastics classes.”

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