As Proteus' retail brand strategist Steve Hoch has discovered, the state of the economy isn't the only factor putting mall traffic at risk these days. There's also the issue of the malls themselves.
Given the tenuous state of the U.S. economy, American consumers are being very cautious about how they spend their money, and retailers around the country are feeling the pain. I'm not telling you anything you don't know. But as it turns out, it's not just the economy or the size of people's wallets that's to blame.
To put it simply, shoppers don't seem to be buying malls any more.
At least not those malls that fail to deliver on the fundamental expectations of the consuming public.
This was one of the conclusions of The Shopping Mall, A Study on Customer Dissatisfaction, a survey conducted jointly by the Verde Group, which specializes in helping American companies measure and address the cost of customer dissatisfaction, and the Jay H. Baker Retailing Initiative at the University of Pennsylvania's Wharton School. The Baker Initiative is a long-term partnership between major retailers and Wharton students. I should mention that, in addition to the role I play at Proteus, I'm a member of the faculty at Penn.
The conclusions of the survey are based on more than 900 telephone interviews conducted nationally with American consumers between October 29 and November 9, 2008. There was a 2 to 1 skew to the sample, females to males. Essentially, respondents qualified if they had personally shopped in a fully enclosed or open-air mall within the past month, and the results were weighted by age to reflect current U.S. population distribution.
Specifically, the survey explored:
– Shopper age, gender and employment status
– History of visits to a given mall
– Time spent shopping
By and large, the survey was an indictment of malls that lacked variety, excitement and imagination. But I'm getting a little ahead of myself.
The spirit of Imelda Marcos lives on.
What the survey showed is that shoppers take their shopping seriously.
For example, we learned that the average mall shopper drives nearly 25 miles to the mall of his or her choice. Overall these shoppers visit five stores per trip; one out of three of them spend over two hours in the mall and visit as many as eight different stores while they're shopping. And mall shoppers are accustomed to spending. In fact, nine out of ten will make purchases that have an average value of more than $150.
That's the good news. The bad news is that, while half of the shoppers say they have problems in a specific store from time to time, over 80% of them say they experienced at least one mall-related problem in their latest mall shopping trip. And shoppers who are disgruntled don't keep it to themselves. The survey discovered that, on average, they'll tell five other people about the problems they had. And they'll be 29% less likely to recommend that mall to their friends.
You may be wondering what a mall can do to make itself more appealing to consumers. So were we. We asked the respondents, and what we found was that there are four distinct attributes of the shopping mall experience that can drive shopper satisfaction and grow shopper loyalty:
Of the four, none comes close to the importance Discovery holds. It's the big boogieman plaguing malls today. In fact, of all the problems shoppers report having in a mall, over one-third are Discovery related. When shoppers were disenchanted with their shopping experience, these were the reasons why:
What happens when a mall suffers from Discovery problems? Unfortunately, the answer is that consumers stop behaving like consumers. Not only do they spend less time in the mall – they also spend less money. We learned that shoppers who felt there was "nothing unique in the mall" are 17% more likely to exit the mall in under two hours compared to other shoppers. And when a shopper feels the "range of stores is too limited", they are 26% less likely to spend more than $100 during that particular visit.
Young people spend the most. And have the most complaints.
We discovered that shoppers in the 18 - 24 age range are 23% more likely to have a problem than all other shoppers. In fact, they have nearly twice as many problems and are only half as satisfied with their mall shopping experience as older shoppers. Yet younger shoppers are active shoppers. They spend 25% more time in the mall compared to shoppers over 40, and visit 70% more stores per mall trip.
Another revealing statistic is the fact that men have a more negative experience in malls than women do, encountering 16% more problems. What bothers them the most, they say, is the fact that too many mall stores seem to be carrying the same products. In fact, they're 60% more likely to experience this issue than women.
And while women are inclined to talk more about their shopping issues than men, they also tend to remain more loyal to the mall, particularly when problem issues occur. The study found that when a woman encounters a mall problem while shopping, her loyalty to the mall falls by 25%, while a man's loyalty drops by nearly 40%.
What's the bottom line? It's time for malls that don't live up to consumer expectations to get busy introducing some much-needed solutions. Otherwise, those empty parking lots the malls have been seeing with distressing regularity are going to get even emptier.
If you have questions or comments about this article, you can e-mail them to Steve at steve@proteusdesign.com.
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