Source: Business Examiner
Author: Sarah Kahne
Date:      12/10/07
Article reprinted by permission www.BusinessExaminer.com

A new study prepared by Rowan University communication studies professor Ed Streb indicates malls will have to be more creative to compete against big box stores for holiday dollars. While he doesn’t discount the importance of malls in American consumer culture, Streb did say malls need to consider partnerships with big box stores to remain competitive.

“Malls are going to have to be more creative,” said Streb, who teaches a course that focuses on communication strategies in malls. “We’re already seeing malls partnering with discounters, such as Wal-Mart and Target, that they would never have partnered with before.”

Don DeSalvo, a general partner with Cafaro Co., part owner of South Hill Mall, said pairing a discount retailer like Target with a traditional indoor mall has long been a trend with his company.

“We saw early on that there is a benefit to putting a Target in an enclosed mall and we’ve done it throughout the country. We’ve even put a Costco in an enclosed mall,” he said. “I think malls have always been creative and have always done what they know needs to be done to give shoppers what they expect.”

DeSalvo said big box retailers like Wal-Mart and Kmart serve a different demographic than perhaps a traditional shopping mall or department stores do – with price being the driving factor. South Hill Mall, for instance, has Target and some 150 other specialty stores to serve as a downtown type shopping experience for patrons, whereas Wal-Mart is very one-dimensional and doesn’t have the same variety as a mall offers. Specialty stores, however, must be creative and find their niche to have an impact in the marketplace.

“These stores can’t be everything to all people. Specialty stores like Zumiez cater to the snowboarding demographic, where other retailers can’t. Just like you won’t find Victoria’s Secret sold in Macys,” he said.

While South Hill Mall’s strategy continues to be long-term in nature with pairings like Target and Macys, Tacoma Mall’s holiday strategy is quite simple. Sarah Bonds, area director of strategic marketing, said Tacoma Mall continues to offer extended shopping hours during the holidays and relies heavily on marketing Visa gift cards.

“Our retailers love our gift card,” she said. “We see a lot of redemption in the mall itself, even though it can be used wherever Visa is accepted.”

Bonds was unable to comment on any marketing strategies of any individual retailers at Tacoma Mall, but did say opening earlier has helped mall retailers stay competitive with big box retailers.

Despite projections that big box stores would hurt traditional mall venues, regional malls, including South Hill Mall, Tacoma Mall and Westfield Capital Mall reported strong patronage after Thanksgiving. Tacoma Mall Sears General Manager Neil Michaud said customers far exceeded projections, particularly those searching for deals on tools and electronics.

“People are still very excited about the Sears products,” he said, noting that sales haven’t seemed to be hurt by discount retailers like Wal-Mart, Target and Kmart.

Ultimately, DeSalvo doesn’t believe there is any true competition between big box retailers and mall retailers.

“I don’t see the competitiveness between big box campuses and the mall,” he said. “You’re never going to find everything you want at a big box campus. It’s more likely that you would find more of what you want at a mall like South Hill. You still need that uniqueness that inspires shoppers to spend some time and shop a little more.”

Although Streb believes malls will remain a facet in American culture, he expects very few new malls will be constructed in the coming year or the near future, for that matter.

He projects indoor mall development will go by the wayside, while more investors opt to build lifestyle centers, a popular and emerging concept here in the South Sound, with examples at Kent Station and Lakewood Towne Center locally. Other lifestyle centers are in some stage of development at South Hill, University Place, Sumner, Bonney Lake, Puyallup, DuPont and Lacey. 

Article reprinted by permission www.BusinessExaminer.com