June 21, 2006 — -- Malls, long a central part of Americans' retail shopping culture, are changing their make-up to keep current with today's shopping trends. But despite the transformation, basic, age-old sales strategies -- from pumping up the air conditioning to creating cushy changing rooms with slimming mirrors -- still lure consumer dollars.
So are there certain details shoppers should be aware of when perusing their local malls? ABC News' personal finance expert Mellody Hobson gives you the lowdown on shopping mall culture and explains how they tap into your impulse to buy. Learning how mall retailers play the game can help you become a savvier shopper.
Malls offer millions of feet of retail space.
According to the International Council of Shopping Centers (ICSC), there are more than 1,130 regional shopping malls in the United States, with a combined 968 million square feet of space. A shopping mall is generally 400,000 or more square feet, while super- or mega-malls command 1 million square feet or more. Generally speaking, a mall is a place where a collection of shops are adjoined in an area where consumers can walk without interference from vehicle traffic. Most malls are located in high-traffic suburban areas and draw in customers from within a 25-mile radius.
What's new with shopping malls?
Historically, shopping malls have been "anchored" by well-known department stores, but with the consolidation and closing of many department store chains, anchor stores have more recently included movie theaters, home stores and bookstores. However, one of the biggest developments in shopping malls is the surge in "lifestyle centers." These new centers are replacing mid-sized shopping malls and resemble commercial village streets. Rather than the traditional enclosed shopping mall surrounded by parking lots, lifestyle centers are open-air shopping venues which are smaller in size -- an average of 50,000 square feet.
Lifestyle centes tend to feature higher-end retailers and allow customers to drive right up and park next to the store of their choice. Although lifestyle centers give all appearances of being a quaint street of shops, they are managed in a way similar to a traditional shopping mall. While there are only about 150 lifestyle centers in the U.S. today, given that there were just 30 in 2002, their growth rate has been tremendous.
What role does air temperature play the world of shopping?
Since the advent of the first modern air conditioner in 1902, climate control has played a critical role in retail. In fact, cold air is often associated with luxury -- with higher-end stores tending to maintain cooler temperatures.
But air temperature is not just an important aspect of ambiance, it is also a sales tactic -- keep in mind, winter clothes are often introduced and on display in warmer months (and vice versa) in anticipation for the next season. As such, cooler store temperatures are important in order to enable customers to envision themselves wearing a winter sweater when it is actually 85 degrees outside.
Do dressing rooms matter?
Although prices and styles are very important in the eyes of the consumer, so are dressing rooms. In fact, customers who actually try something on in a dressing room are two times as likely to buy something. Specifically, while only 24 percent to 28 percent of customers use dressing rooms, these individuals make up 60 percent of sales, according to research from H.B. Maynard and Co.
On a basic level, most dressing rooms are carpeted, and the mirrors tend to be slimming, which both add to the comfort of trying something on. However, many retailers are taking it a step further and dressing up their dressing rooms. For example, Forth & Towne, a new chain launched by the Gap, offers fitting rooms with full-length doors, seating areas, flowers, water and more. Also, since 60 percent of customers shop in groups, many retailers are adding a selection of seating areas throughout the store, including in the dressing room area, to allow for companion seating.
Why is food such a big part of the shopping mall experience? Are food and entertainment strategically placed?
In addition to retailers, many malls offer consumers entertainment and food. According to the International Council of Shopping Centers (ICSC), the average mall dedicates 24,000 square feet to food -- with offerings ranging from a food court to sit-down restaurants. The reason for all of this food space? Shoppers stay longer. In fact, of the shoppers who spend more than two hours at the mall, 60 percent of them stop for a bite to eat, according to ICSC data.
But it is not just about making food and entertainment options available -- it is also about where they are available. Most food courts and movie theaters are either placed on the lower level of the mall or the top level. The reasoning behind this placement is that customers have to walk by several stores, most likely on several floors, to get to a destination. This promotes window shopping and boosts the likelihood of impulse purchases.
How do shopping malls and retailers encourage impulse purchases?
The layout of malls and individual stores plays a big role in encouraging purchases. First, traditional malls do not have windows for a reason. Once you enter a mall, you can easily forget about the weather outside, making you less likely to leave when it's a nice day.
You might also notice that up and down escalators are rarely placed side by side. This forces shoppers stroll a bit on each floor in order to get up or down. If you are trying to avoid impulse buys, you may want to scope out the elevators and take them when it is more convenient.
Within a department store, women's cosmetics are invariably on the first floor right near the main entrance. This is because cosmetics are low-cost impulse buys that customers can easily justify.
High margin, hot-sellers always get the best placement in any retail store. The exception to this general rule is if a retailer carries a popular item that customers can only get at their store. These items are often placed in a out of the way place so that customers need to peruse other areas first, potentially increasing the impulse buy. Related or complementary merchandise is often placed side-by-side or, in the case of clothing, on a mannequin, to promote cross-sales.
Most retailers also place seasonal items in high traffic areas to enable high turnover of the items.
Do certain pricing structures make people more apt to buy?Believe it or not, odd pricing can make a difference. Ever wonder why an item is $59.95 instead of $60.00? While that extra nickel does not seem like a lot, the lower price point can make a difference because consumers tend to round down instead of up.
Are you able to get the best price at shopping malls? Unlike a Wal-Mart or discounted retailer, the draw of a shopping mall is not necessarily the low price of the goods. Instead, malls view their competitive advantage as offering specialty shopping coupled with ambiance and service. But there is one caveat -- at the end of the season, retailers need to get rid of their current merchandise to make room for new merchandise. So savvy shoppers should be sure to inquire about the timing of clearance sales to maximize savings.
What about bargaining?
Unlike a flea market, it is difficult to haggle over price with a salesperson at a chain retailer. Generally, neither a salespeople nor their managers have the authority to lower the price for you, unless the item you are purchasing is somehow damaged, in which case they may offer you a standard discount of 5 to 10 percent.
That said, it never hurts to ask if a better deal can be had. Your odds of getting a discount on a regularly priced item are better if you are in a proprietor-run boutique, but if you shop in chain retailers, there are strategies you can employ to get a better deal. For example, you should ask the salesperson if the item will be going on sale shortly. If yes, will they honor the sales price early? Can they keep the item on hold for you until the sale?
You should ask about a store's policy regarding sales prices. Specifically, some retailers will pay you back the difference if an item you buy goes on sale within a week or two of your original purchase -- all you need to do is produce your original receipt.
It is often feasible to negotiate on high-ticket items such as jewelry and electronics, so long as they are not the hot-sellers. For example, jewelers will often honor lower prices that you may have seen elsewhere or be willing to lower the price a bit on an expensive item, so it's important to do your research before entering the store. You can also try to work with a salesperson on waiving shipping costs if they are sending an item to you from another store.
Does loyalty to a particular salesperson pay?
Definitely. Regardless of where you shop -- whether it be at a department store, boutique or discount retailer -- it helps to build a relationship with one salesperson. If you encounter someone helpful, find out his or her regular hours and be sure to use that person as your salesperson as much as possible. By doing so, you will create loyalty and the salesperson will be more likely to let you know about upcoming sales and even negotiate on items where possible.
In addition, good salespeople can help you determine whether it makes sense to buy an item now or hold off until it goes on sale by checking the current inventory at their store (and at other stores, if it is a chain). If quantities are limited, you may not want to wait. But if there are plenty, you may decide to take your chances.
How about lighting and sounds? Do they impact sales?
Believe it or not, your senses do play a role in shopping. How a store looks and sounds can be a key determinant in whether you want to stay in a store and even buy something. In fact, proper lighting can boost sales by as much as 20 percent.
Music is also a key element -- did you ever notice how stores targeting teenagers play loud, "of the moment" popular music (think Abercrombie & Fitch)? With any retailer, the key is to know your audience. Stores that know their target demographic often have mastered the ability to manipulate shoppers' senses and put them in the right frame of mind to buy.
Mellody Hobson, president of Ariel Capital Management in Chicago (www.arielmutualfunds.com), is "Good Morning America's" personal finance expert.