As a proud native Minnesotan, home to the Southdale Center and the Mall of America, the country’s first mall and its first mega-mall, respectively, the topic of the demise of the mall hits close to home.
While Minnesota is also famous for its many lakes, those are not in crisis mode so this article will stick to what the future might hold for what was once considered the pinnacle of the shopping experience.
In April, Green Street Advisors predicted that more than 50% of mall department stores will close by the end of next year. Many of these closings are the result of anchor stores such as Sears, Lord & Taylor, Neiman Marcus and J.C. Penney among the many retailers filing for bankruptcy protection.
(J.C. Penney avoided liquidation with the recently announced purchase by mall operators Simon Property Group and Brookfield Property Partners, which will take over the retail side of the business.)
The fate of anchor stores is often tied to the fate of the smaller mall-based retail outlets, many of which have lease clauses permitting early release if one or more anchor stores depart.
While some of the trouble is a result of the pandemic and its dire consequences for retail in general, malls were already struggling prior to this year. According to Coresight Research, 9,302 stores closed in the U.S. in 2019 – up 59% from 2018, with many of those closings in malls.
The pandemic aside, consumers were already souring on the mall experience partly due to the unmatched convenience of ecommerce, which of course does not entail fighting for a far-off parking spot or having to tote goods-laden shopping bags across acres of real estate.
The below graphic shows that as a percentage of retail sales, ecommerce grew from 5.6% in 2009 to 16.0% in 2019 (and spiked to 27% during the first two months of coronavirus).
In addition to being unable to match the convenience of online shopping, the reduction in mall traffic can also be explained by the expectation of the always-on, connected consumer for a personalized customer experience (CX).
In a Harris Poll commissioned by Redpoint, 66% of consumers said that they expect personalization as part of the standard service they expect.
Asked to define what a personalized CX means for them, 52% said it was receiving special offers available only to them, and 43% said it was when a brand recognized them as the same customer across all touchpoints (in-store, web, mobile, social media, call center, etc.)
Furthermore, in a Forbes Insight article on the value of CX, 74% of consumers said that they are at least somewhat likely to purchase based on CX alone – regardless of the price or product, with 77% saying that CX is just as important as quality of a brand’s products or services.
Conversely, the traditional shopping mall experience is mostly about price and product, with the “experience” referring more to consumers going from store to store to compare products and find bargains.
Consumers simply do not place the same value on in-store browsing as they do on receiving a personalized CX and forming a relationship with a brand that is relevant to their overall customer journey and that reflects their individual behaviors and preferences.
It is why malls, looking to reinvent themselves for a digital-first world, are trying to add value with an emphasis on the overall community experience, augmenting shopping with a greater focus on events, groceries, dining and leisure activities to provide customers with more of a reason to leave the comforts of home.
Digital-first brands that recognize a superior CX as a competitive differentiator are aware that the in-store experience, while still important, represents just a sliver of how a customer interacts with a brand.
Customers consider an experience with a brand as a holistic journey; brands that focus on driving mall traffic miss the bigger picture – even if a re-imagined mall returns to the glory days of the 1980s when it was a “see and be seen” hangout and cultural touchstone.
The personalized CX that a customer craves depends on a brand knowing a customer across all channels and devices, and knowing everything there is to know about the customer: preferences, behaviors, transactions and social.
An identity graph that includes first-party, second-party and third-party data, with structured, unstructured and semi-structured data provides brand marketers with a unified customer profile that is the basis for delivering a personalized, relevant CX wherever a customer may surface next in an omnichannel journey.
When this single customer view is updated and accessible in real time – with zero data latency between when the customer data is collected and when it is presented for insight – marketers are uniquely positioned to provide a hyper-personalized, relevant CX in any channel, and one that reflects that specific moment in time of a customer’s journey with the brand.
Consider, for instance, a customer who searches a brand website for camping equipment, clicking onto a landing page for family tents. For many marketers, this signals purchase intent.
But perhaps the customer recently purchased the product in-store and, during unpacking, noticed that it was missing tent poles. Maybe they clicked on the page to read product reviews to see if anyone else had the same issue before writing a scathing social media post.
If that customer then places a call to the call center, the associate with a real time view of the customer’s purchase history, web behavior and device activity will be prepared to engage with customer with relevance.
A single customer view similarly provides benefits related to an in-store (in-mall?) visit, which provides savvy, digital-first brands another avenue to provide a differentiated CX.
Clienteling, for example, marries the digital with the in-store experiences. An associate with an easily accessible, real time identity graph on a mobile device can better assist a customer, providing relevant, personalized recommendations and steering them to their desired colors, sizes and styles.
Clienteling is made possible because the associate is empowered with a next-best action – whichever action that optimizes a customer journey at the point of delivery.
This could be an offer, a recommendation, education – any action that moves the customer journey forward that is relevant to the real time situation, delivered on any channel.
The clienteling example is used here, but a next-best action applies real-time decisioning to the single customer view to orchestrate an omnichannel journey however a customer chooses to engage with a brand.
The point to make is that clienteling is one type of a digital experience that can enhance an in-store visit. Malls are taking other steps to re-think the traditional mall experience with a digital focus, such as buy online, pick-up in-store (BOPIS) or buy online, return in-store.
Geo-fencing is another way to enhance the in-store experience; a store associate notified when a customer breaks a geo-fence can proactively prepare for the visit by having preferred styles ready, by re-arranging a physical or digital display to match the customer’s preferences, or even sending an SMS offering a limited-time offer on an item the customer recently searched for online.
The bottom line is that post-pandemic, the days of a mall store opening its doors and waiting for customers to stream in are long gone.
A personalized, digital-first CX that treats an in-store experience as complementary to a holistic customer journey more closely aligns with how the customer views their relationship with a brand.
The mall concept will soon undergo drastic change, and brands that appreciate the power of a superior CX to attract, retain and delight loyal customers will have an important leg up on their mall neighbors when customers begin to return.Reblogged 3 months ago from www.clickz.com