CREJ - Retail Properties Quarterly - August 2017
In freshman-level marketing classes, new business students learn about the unique selling point: The differentiating factor between a product or brand and its competitors. Good marketers then use this set of attributes to create a positioning statement and hammer this message home in all marketing strategy, content and communication. Why should customers pick you over your competition? What makes you different; what makes you better? All businesses should identify their unique selling points and the shopping center industry is no exception. When it comes to identifying what separates a center from its competitive brick-and-mortar counterparts, these differentiators are fairly concrete to pinpoint. The standard differentiators generally are centered on tenant mix, location, amenities, safety, activities, and quality of the property and its operations. When it comes to honing in on what definitively separates brick-and-mortar shopping centers from online retailers, the industry often has focused on attributes that are quickly expired by their fleeting uniqueness. In the early 2000s, the brick-and-mortar industry standard to differentiate from online competition relied primarily on security and tactility. The newness of online transactions created a potential vulnerability and our industry ran with it, thinking customers wouldn’t want to jeopardize their financial security and enter credit card data online. This was a short-lived differentiator – in 2000, only 22 percent of adult Americans had made a purchase online, and today that number is over 80 percent, according to a 2016 Pew Research study. The majority of consumers generally are not swayed by this fear and understand that a compromise of information can happen online, in store and even at the gas pump. It is no longer an advantage. Another ubiquitous brick-and-mortar differentiator of the not-so-far-off past was tactility. If you come to a mall you can see the product, feel the product and try it on. Although this technically holds true today, this gap continues to rapidly close as virtual reality technology advances. This strategy also didn’t take into account the rapid acceleration of smartphone technology and the ability to touch something in store, beat the price from your phone and have it arrive on your doorstep the next day. So what, then, do shopping centers have that set them apart? As technology continues to evolve exponentially, I believe there are three differentiators that will not dissipate anytime soon and should be at the heart of any shopping center marketing and operational plan. •Emotion. As a species, humans need connections. It is now possible to never leave your home and have all of life’s consumer essentials brought to you at a relatively competitive price, but where’s the joy in that? The faster and less complicated online shopping gets, the greater the continued need for emotional connection. Shopping centers have long provided not only goods, but also a venue for emotional connections. And while shopping center marketing of the past focused on convenience, discounts or luxury, and how much “stuff” was available at a mall, the shopping center’s unique proposition of the future is deeper. For example, a mother taking her daughter on an afternoon trip to buy a prom dress; or taking your retired father for a coffee just to enjoy the afternoon together and learn more about him; or sitting at an outdoor café to work from your laptop. A shopping center is more than a place to buy goods. It is a community landmark that is an integral backdrop for the moments that make life wonderful and a neighborhood catalyst for creating connections that truly matter. •Experience. Massage therapists have been coming to homes and offices for years. They offer the same quality massage available in a spa, but their unique selling point is convenience – we’ll come to you. Yet, the spa industry has continued to grow and thrive since massages became deliverable. The two experiences aren’t comparable, although the end result of “a massage” may be the same. Shopping centers create a venue for experiencing, rather than simply transacting. While merchants keen on surviving continue to work on developing their in-store experience, savvy shopping center owners, regardless of shopping center asset class, tenant mix or size, are honing in on the importance of the experience at the center level. Although large indoor regional malls and open-air shopping destinations have long had customer service programs, owners and managers of neighborhood retail centers and grocery-anchored centers now are realizing the essential importance of experience. We employ the Engage program, which encourages the property management team members and third-party vendors to become active in the cultivation of great experiences through eye-contact, noticing opportunities for interaction, greeting, assisting, going above and beyond, and developing exceptional experiences. •Engagement. Most shopping center owners have shifted marketing budgets away from traditional brand advertising to experiential and engagement marketing. The traditional summer concert series, tree lightings and other staple events now are surrounded by year-long creative programming aimed at driving foot traffic, which used to be generated by traditional anchors, and it works. Staying at the forefront of creating exceptional events that engage the community and partnerships that leverage community relations will be vital to the successful shopping center of the present and future. As shopping center management, operations and marketing teams prepare strategic plans for 2018, it’s time to zero in on what truly makes us different and leave simply existing so consumers can buy things behind, there’s a new expert for that.