Malls Battle Each Other to Woo Shoppers

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.

Perks Other Than Shopping

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.

"We don't call ourselves a mall," said Gary Hanson, general manager of the West Edmonton Mall in Alberta, Canada. "We call ourselves a show, that's what we classify ourselves as. We put on a show each and every day."

The West Edmonton Mall has perfected the concept of mall as theme park. At 118 acres, it's equal to the size of 115 football fields, making it the largest mall in North America -- bigger, even, than Minnesota's Mall of America.

It offers enough attractions to draw in tens of millions of tourists a year -- many of them Americans.

It has the world's largest indoor amusement park, largest indoor water park, and even bungee jumping. All of the attractions are designed to draw customers and their shopping dollars to the mall's 800 stores.

"If you're just going to build a traditional shopping center and just build a kiddie center, that won't work," Hanson said. "You have to go that second and third step and be that destination. … That's the only way you're going to be successful."

The Canadian mall must be doing something right. The Mall of America now has plans to double its size, which would make it the biggest mall in North America, de-throning West Edmonton.