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Shopping Malls | US
Analysis
GROUNDED
CONSUMERS
Grounded Consumers will borrow
less and save more than in the
past. This paradigm shift is already
well underway. The consumer
savings rate in the US has
increased during the past few
years from below zero to 6.9 per
cent in May 2009 - the highest
since February 1995. Most econo-
mists predict it will continue to go
even higher. Consumer spending
as a percentage of gross domestic
product increased from 61 per
cent in the early 1950s to a peak of
72 per cent just a little over a year
ago. Economists predict that con-
sumer spending in the future will be
at two-thirds of GDP, where it was
about 10 years ago. A recent
survey of 5,000 US consumers by
Alix and Partners predicted post-
recession spending will go back to
just 86 per cent of pre-recession
levels, which is about a 10 per cent
drop in spending. Lee Scott,
Mall operators ‘must
Walmart’s president and CEO,
sees the consumer having new
patterns of frugality that will live on
long after the recovery. Indeed, it
focus on entertainment’
seems conspicuous consumption
has now become bad manners.
In the 19th and stay for the fun: Other
“
century, econo-
The global economic downturn has caused a sudden, fundamental shift in consumer
entertainment concepts
mist Thorstein
attitudes. Now, if they wish to appeal to a post-recession public, shopping mall operators in
announced or already appear-
Veblen coined the
term conspicuous
the US must focus on expanding their venue mix, says Randy White, CEO of White
ing in shopping centres
include Legoland Discovery
consumption, which he
Hutchinson Leisure and Learning Group.
Center, SeaLife Aquarium, live
defined as acquiring valuable theatre venues and children’s
possessions visible to all as a mega role-play edutainment
signal of one’s wealth, success a number of nascent - but now ducted last fall, the Baker isn’t about ratcheting up their tions. Traditionally, amuse- centres such as Wannado City.
and status. During the 53 years accelerated - trends that Retailing Initiative at the credit card debt. In other ment parks or FECs aren’t an Entertainment-oriented
since Victor Gruen launched started several years ago. Wharton School and the Verde words, it needs to be a fun, element in the North Ameri- shoppers spend less on
America’s first enclosed shop- The new Grounded Con- Group found consumers are leisure experience, not just a can mall mix. average than shopping-ori-
ping mall, conspicuous con- sumers have a different value aggravated and uninspired by shopping experience. It appears other parts of the ented visitors, and entertain-
sumption has been the key equation. They will no longer the sameness and predictabil- Since the earliest days of the world are ahead of most North ment venues typically cannot
driver for retail and shopping live beyond their means; view ity of shopping malls. enclosed mall, entertainment American mall developers in pay normal retail rents. For
centre growth in the US. ‘less’ as the new ‘more’; and What is the answer? How in some form has been part of understanding the positive that reason, many shopping
What is now being labelled place a higher value on family can centres reinvent them- the mix, whether it was back- impact experiential and enter- centre developers in the past
the Great Recession is having a and community. They want to selves to appeal to the post- ground music, a central mall tainment destinations can shied away from entertain-
profound and lasting impact enjoy life and make time for recession consumer? A large court with periodic fashion have on a mall’s success. ment anchors. Today, along
on consumers. Most busi- fun and shared experiences - part of the solution is to incor- shows or other shows, sea- Research has substantiated with restaurants, entertain-
nesses are currently in survival they are looking for simple porate more experiences. We sonal decorations or visits by this. Visitor studies of malls ment is becoming the new
mode, trying to tread water pleasures that don’t break the have moved into an ‘experi- Santa or the Easter Bunny. West with entertainment destina- anchor and occupying an
until the economy returns to bank. ence economy’. Experiences, Edmonton tions and components have increasing percentage of a
normal. What they don’t realise The rapid emergence of both entertaining and enrich- Mall in Alberta, Canada, found that up to 25 per cent of centre’s GLA, as much as 30
is the “normal economy” as we Grounded Consumers and ing, are taking on even greater ratcheted up the equation in mall visitors came with the per cent or more in some
knew it is history. Unlike past their decreased spending is importance with consumers 1981 when it opened, a primary purpose of visiting instances.
recessions, and similar to the not the only challenge facing as the accumulation of stuff 400,000sq.ft indoor amuse- family entertainment centres In today’s challenging and
lasting impact the Great shopping centres needing to decreases in importance. ment park with 26 rides. The or cinemas and that entertain- competitive landscape, devel-
Depression had on consumer adjust to this new economy. To generate traffic, shop- mall later added a waterpark, ment visitors are willing to opers that break from the old
behaviour and attitudes for a The classic mall anchor, ping centres need to retain ice skating and bowling. travel farther than shopping- landlord paradigm and learn
generation, the post-recession department stores, have been their destination status, but Several dozen North Ameri- only visitors. how to make their shopping
culture of consumerism will consolidating and closing. more for experiences, includ- can malls have included Rather than the old formula centres entertaining and
be far different. The normal Consumers’ dissatisfaction ing dining, entertainment and amusement areas with rides or of come for the entertainment, enriching destination experi-
economy is being redefined. with enclosed malls has like- knowledge - and less as a desti- family entertainment centres many are incorporating food ences with a true sense of
The new consumer rising from wise been growing. In their nation primarily to buy stuff. greater than 30,000sq.ft as and beverage as a major com- place for the new Grounded
the ashes of the economic fifth annual survey of con- People want to be able to feel anchor attractions over the ponent, with the new formula Consumer will be the
meltdown has been shaped by sumer dissatisfaction con- as if the act of going shopping years. But those are the excep- of come for the food and drink winners.”
GamesWorld | 16 | December 2009/January 2010
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