STORES Magazine - January 2009 - (Page 28)

EXECUTIVE SUITE / COVER STORY Research compiled by other sources confirms a decline in mall traffic. Through its monthly Consumer Intentions and Actions surveys, BIGresearch finds that shopping at enclosed malls has slipped, though not appreciably (see chart on page 30). In November 2007, 13 percent of adults indicated they were shopping less at enclosed shopping malls and more at free-standing stores. A year later, that figure was 15.6 percent. ShopperTrak, a Chicago firm that analyzes the movement of shoppers in retail environments, also has seen a decline in foot traffic through 2008, with a sharp drop recorded during the fourth quarter. When all the figures are tallied, co-founder Bill Overseas Developments evelopers have no plans to build any new regional malls in the United States. In fact, the most recent major enclosed shopping center opened more than two years ago. Around the globe, however, the story is quite different. Last fall, Westfield London, dubbed Europe’s glitziest and largest urban shopping complex, opened in a west London suburb. At 1.6 million sq. ft., it has 265 shops and nearly 50 restaurants. Days later, the world’s largest shopping center opened in the United Arab Emirates. At 3.7 million sq. ft., the Dubai Mall will eventually house more than 1,200 shops and is expected to attract 30 million visitors a year. Westfield London blends high-end designers and mass market retailers under one roof. It’s an unusual approach, as conventional wisdom suggests that luxury shoppers prefer not to rub elbows with the masses and the latter are put off by pricey designer shops. Brands like Prada, Louis Vuitton, Gucci and Tiffany & Co. are showcased within a boutique-style wing called The Village. Westfield also features its share of new concepts. Carphone Warehouse launched its “Wireless World” format in conjunction with Best Buy; it also includes an area dedicated to Best Buy’s Geek Squad. U.K. powerhouse Marks & Spencer has a 10,000sq.-ft. location featuring separate departments for its Autograph and Limited Collection brands. At press time, some 700 shops were open at the Dubai Mall, where a key draw is the Dubai Aquarium & Discovery Centre, a spectacular showcase of marine life that includes a live sharkfeeding demonstration. Another alluring feature is the sprawling Arabesque gold souk: Elaborately designed to reflect traditional Arabic geometric design, this section of the mall is home to some 220 jewelry shops. Dubai Mall also houses a fashion catwalk atrium and an Olympic-sized ice rink. Other soon-to-open attractions include The Grove, an indoor/outdoor streetscape with a fully retractable roof; KidZania, an innovative 80,000-sq.-ft. edutainment concept; SEGA Republic, a 76,000-sq.-ft. indoor theme park; and a 22-screen cineplex, the largest in Dubai. U.K favorites Waitrose and Hamleys are open, with anchor department stores Galeries Lafayette and Bloomingdale’s set to open in early 2009 and 2010, respectively. D Martin expects year-over-year mall traffic will have slipped by 2 to 3 percent in 2008. “Given today’s wildly volatile economy, the fact that traffic is off by single digits is not too bad,” Martin says. “Still, it means it that retailers and mall developers are going to have to work harder to entice shoppers.” There is some good news: Though consumers may be making fewer visits to malls, when they do venture out to their shopping mecca of choice they’re staying longer, visiting more stores and spending more money, Martin says. Industry experts contend that regional malls would very likely benefit from reinvention, and “in a down market there are always opportunities for those who are willing to take chances,” says Michael Brown, retail strategist with Kurt Salmon Associates. “There are plenty of centers sitting with vacancies. Now is the time to be creative.” Tick, tick, tick rown does not count himself among the analysts and observers forecasting the demise of regional shopping malls, but he does feel “that the clock is ticking for non-descript malls that exist as shopping-only destinations. Shopping malls are no different from retailers and they’re no different from other businesses: they have to constantly reinvent themselves to stay in step with the consumer.” Mary Brett Whitfield, senior vice president and director of the Retail Forward Intelligence System at TNS Retail Forward, is not sure any amount of reinvention will lift mall traffic in the next nine to 12 months. With shoppers seeking to minimize discretionary spending, she expects the focus to be on necessities and value, and feels that many mall shoppers will find themselves heading to supercenters and power centers and “discover that a lot has been happening there since the last time they visited. They’ll walk into Walmart and see that they’ve cleaned out the clutter. The stores are not only cleaner, but the assortment is better; shoppers will think to themselves, ‘This is better than I remembered.’ “There’s not a substitute at Walmart for everything you can get at the mall, but it satisfies basic needs and then some,” she says. Second-tier malls are under greater pressure to develop new strategies, Whitfield says. She suggests that opportunities may exist for Walmart and Target to redevelop their core formats in vacant anchor space. “Does it solve the problem? That remains to be seen; there’s not a one-size-fits-all solution,” she says. “But Walmart and Target are big draws, and the idea of having a discount store anchor is a model that works in other parts of the world.” B Sea of sameness The real problem for the malls identified in industry circles as “A” and “B” properties is the sea of sameness, Whitfield says. “As little as a decade ago there were different department stores in different areas of the country [that] set the tone for WWW.STORES.ORG 28 STORES / JANUARY 2009 http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - January 2009

STORES Magazine - Jauary 2008 Contents Executive Editor's Page President's Page Mechanical Marvel P&G Invests in Ocado Now I Remember What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Breaking the Monotony Multi-Channel Concept2Watch E-Commerce Analytics Category Management IT Systems In-Store Technology IT Systems Communications Website Strategy Communications SOA Energy Video Surveillance Employee Theft Online Fraud Industry Perspective Loeb Retail Letter ARTS Update Point of View NRF News Retail Crossword End Cap

STORES Magazine - January 2009

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