Malls Seeking to Reinvent Themselves

New York, October 29--Merchants and marketers know far too little about what happens at the point of sale - and about how to make the sales experience exciting and relevant to shoppers. This was one of the major conclusions reached at a panel discussion today entitled "Is America All Malled Out?" The event, sponsored by RTKL - one of the largest architecture and urban planning firms in the world - featured presentations by Paco Underhill, founder and managing director of Envirosell, Inc. and Dan Hess, chief executive officer of Merchant Forecast LLC, as well as remarks by Paris Rutherford and David Gester, both vice presidents at RTKL. "Merchants and marketers are nervous," observed Underhill. "The culture we are selling out of isn't changing as fast as the culture we are selling into. Our 20th century retailing tools - malls, advertising, promotions - are rusty." With retailers all competing for the same discretionary spending, stores need to do a better job of creating "a sense of place" through exciting interiors and exteriors and by making customers feel at home in the environment. "Retailing is not a formula," Hess noted. "The key element is emotion." To infuse the traditional mall with emotion, more mixed-use developments are cropping up, which combine shopping with residential housing, movie theaters and hotels. The panelists noted a return to Main Street villages and retail clustering - a format where like-minded products are clustered together, either in an urban center or a retail environment. "Traditional malls are evolving into something else," commented Gester, a retail specialist at RTKL. "There's a huge opportunity in the retail sector for wide-scale reinvention." While all four panel members agreed that "the most innovative malls are being built outside the U.S.," RTKL noted some major innovations in the U.S.: From Neighborhood to National - Many ethnic neighborhoods are spawning home-grown businesses which are on their way to becoming national concepts. "These neighborhood businesses understand their customers," notes Gester. "They know how to create the sense of community and excitement that are essential to becoming best-sellers." Male Malls - Retailers are beginning to pay more attention to the male consumer. With the market for female shopping outlets approaching saturation, expect a growing percentage of retail concepts, store designs and in-store promotions to focus on attracting male shoppers - the "Spike TV" of shopping. Re-Sizing Big Box Stores - As big box stores move into urban markets, they are changing their formats to be smaller and more "Main Street accessible." Expect to start seeing more of these re-sized big box establishments in mixed-use communities, where housing, entertainment, retail, transportation and civic centers all co-exist. Some merchants are succeeding despite their mall involvement. Hess cited three U.S. retailers who are doing things right: Chico's, Claire's Accessories and Club Libby Lu. "Each of these stores is creating a sense of excitement and making customers feel like they want to be a part of the environment," Hess noted. "At Claire's Accessories, for example, 10-year old girls are excited to walk in the door, while their parents are excited to be able to satisfy their daughters with a $2.50 purchase." Another area where tremendous change is afoot is suburban re-development. "The dirty little secret of America's suburbs and cities is that we're not doing a good enough job of delivering retail solutions," said Rutherford, an urban planning specialist at RTKL. "There are too many faceless developments in our suburbs, leading to a commodity-based experience." The result is suburban sprawl - or "development trash" - which, Rutherford believes, "litters the landscape with one-off projects, without concern for the collective experience."