Malls Battle Each Other to Woo Shoppers

Nov. 25, 2006 — -- In the mall business, it used to be that if you built it, shoppers would come.

But those days of leisurely one-stop shopping are now long gone.

"When most malls were built 20 or 30 years ago, they were the dominant retail format in their community," said Malachy Kavanagh of the International Council of Shopping Centers. "Now today, they're in much more competition."

That competition is fierce. Wal-Mart, Target and other discount stores are eating into malls' bottom lines. Internet shopping shows no sign of slowing. And as malls get bigger, they're battling for each other's customers.

"The ability for consumers to shop 24/7, basically in stores, online, and through catalogues, has really made it a fight for market share," said Dana Telsey of the Telsey Advisory Group. "So being able to offer consumers what they want, when they want it … is what makes one mall different than another."

Shopping centers are a $3-trillion-a-year industry in the United States. Malls are fighting for every one of those dollars, wooing customers with an escalating amount of frills.

From an indoor ice skating rink at the Galleria Mall in Houston to a water works display in Los Angeles' Grove Mall, shopping centers are putting out all the stops.Many malls no longer consider themselves simply retail destinations, but destinations in and of themselves.

"We look at ourselves as more of an entertainment district," said Hugh Crawford of the Flatiron Crossing Mall outside Boulder, Colo. "We're more than just shopping."

The Flatiron Crossing Mall offers a giant multiplex, eight high-end restaurants, valet parking, and free childcare during the holidays. They've even built 16 miles of hiking and biking trails to draw in outdoor enthusiasts.

"We're always trying to stay fresh," Crawford said. "If we remain stagnant, we lose out to the competition. So every day we look to say how can we improve upon what we're doing."

But the survival of the mall may prove to be more Darwinian: It's either go big, or go home.