Malls Aren't Going Down Without a Fight
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What is the main topic discussed in this episode?
This is Your Money Matters from The Wall Street Journal.
Welcome to Your Money Matters. I'm Anne-Marie Frattoli in New York. If you're a consumer, you may be debating whether you want to shop online or head out to brave the crowds at brick-and-mortar stores this holiday season. Well, mall owners are trying to sweeten the deal for you. They're bringing out all the bells and whistles and lots of decorations as they try to compete with online retailers to turn a profit this season.
How are malls upgrading holiday attractions to compete with online shopping?
Joining me now in our studio to talk about just how much they're spending is Wall Street Journal reporter Esther Fung. Esther, malls typically do different things around the holidays to try to drum up traffic. Pictures with Santa, holiday lights, trees, wreaths. But you found that some are doing even more than usual this year. How are they getting more creative to get shoppers in the door?
So it's the larger and the more well-off centers that have the resources to become more creative. Some, particularly in the south, they might be bringing out temporary ice skating rinks and they're making them outdoor ice skating rinks, which brings out the novelty because sometimes the ice skating rinks over there tend to be indoor. And I've heard that lots of people like skating under the stars. So that's a big plus. There are others that include winter castles in their malls. And having pictures taken with Santa is a given. I think every mall has it.
That's sort of a mainstay now. It sounds like they're really ramping up what they can offer in terms of physical space that online retailers like Amazon can't. I guess the hope is that they have somewhat of an advantage, at least there, in creating a destination for shoppers to want to come to and stay.
That's right. It's all about the experiential offerings that they bring to the table.
What experiential features are malls adding to drive foot traffic this season?
And also their goal is to create customer loyalty and to encourage people to think of their centres or their malls when they think about doing something as a family. So the goal isn't so much to make them spend all their money in the mall. They're very clear that some of them are definitely going to do online shopping this season. But the idea is to encourage them to come out.
And what did you find out about how much more mall owners are spending? Are they spending more than they have typically in the past?
So I've read that in the past, some of these mall owners would spend perhaps $70,000 on mall decorations. But in my talks with some of the retail consultants, they said that some of the top mall owners, they can spend as much as half a million on these decorations. Wow. They're putting up a fight, and they want to make sure that they can still draw people out during this season.
Sounds like it. I'm speaking with Wall Street Journal reporter Esther Fung about how much mall owners are spending this holiday season, and you're listening to Your Money Matters. Welcome back, everybody.
How much more are mall owners spending on decorations and events than in past years?
Esther, mall owners are certainly aware of the challenges they're facing from online retailers. How is that affecting their expectations for this holiday season?
So they still hope, of course, that people would still spend in the malls or spend in their outdoor centers. The metric that they usually use to gauge how successful they are would be sales per square foot. But a lot of these owners now realise that a lot of sales that should be attributed to these four walls don't get recorded because people may go to the store, try on something and they may end up buying online. So they're not too fixated on that anymore. And the idea is to draw foot traffic. A lot more owners are now putting traffic counters and reminding their tenants that, hey, you're still getting foot traffic, you're still getting footfall, you're still getting eyeballs here. Keep your lease here.
Esther, in terms of what mall owners are doing and how much they're spending this holiday season, what do we know about whether it's working? Is it translating into more traffic and sales?
So, yes, the owners tell me that it does translate to more foot traffic, at least from what they've seen so far.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:02–0:29
2
How are malls upgrading holiday attractions to compete with online shopping?
0:29–1:51
3
What experiential features are malls adding to drive foot traffic this season?
1:51–3:05
4
How much more are mall owners spending on decorations and events than in past years?
3:05–4:21
5
How are malls measuring success beyond traditional sales-per-square-foot?
4:21–5:41
6
Is the increased spending translating into higher traffic and profitable sales?
5:41–5:57
7
What risks do mall owners face from overspending and how do they justify the costs?
5:57–6:13
Speakers
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