Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Shopping centers need that more targeted approach to succeed, observers say. Previous shopping centers’ efforts to attract web shoppers proved too complex, Whitfield says. They included such plans as trying to link a mall’s stores to online shopping, allowing consumers to check inventory availability in stores or equipping consumers with scanners to create a wish list from store inventories that the user would then upload to a mall’s web site where a gift giver could find the information. “That kind of content is almost overwhelming,” she says. “This is a simple approach compared to the complex future vision that other approaches represented.”
While Simon experimented with how to tie online and offline shopping together, its focus now is on coordinating online and offline promotions, Sheinman says. For instance, the malls may use their web sites and e-mail bases to market a Spring Fever promotion in which various retailers participate. “We’ve always believed in the convergence of the online and the offline,” he says.
In fact, Simon believes the two must work together to be successful. “People want to be communicated with initially offline and in person,” Sheinman says. “We start the engagement in the mall, then extend it and go deeper with the relationship by coming into people’s homes with online promotions.”
Making shopping efficient
Simon Property started collecting e-mail addresses for promotions last Halloween. Its primary source has been sign-ups at malls, says Amy Noll, director of affinity marketing. Customers register for sweepstakes at malls and at ShopSimon.com by giving e-mail addresses. Simon hosts 2 billion shopper visits a year by 100 million consumers.
Simon uses its e-mail database and web site to promote not just its retailers but also manufacturers who want access to Simon’s customer base. Simon has done mall promotions that tied together online and offline marketing with Pepsi-Cola, Visa U.S.A., Ford Motor Co., Microsoft Corp. and Cingluar.
While attempts to bring shopping centers’ web sites into the e-commerce arena may be on hold for now, there’s no denying that many more consumers are online today and willing to accept and act upon e-mail promotions. Taubman, which bases its approach on the results of 36 focus groups of consumers who match the demographics of the malls that Taubman operates, has seen the proportion of its customers with web access grow from about 45% three years ago to in the 70s today, Gies says. In that time, the proportion of customers who have bought apparel on the web has grown from about 3% to 16% and, in one recent focus group, reached as high as 21%.
But the primary learning that came out of Taubman’s research, Gies says, was: Save time and money. Thus the strategy of offering specific specials from tenants.
Taubman promotes its web sites through arrangements with iWon and AOL. In addition, local mall marketing directors piggy-backed site promotion on regular advertising and used sweepstakes, mall signage and flyers to attract visitors to the site.
The sites have been effective in driving traffic, Taubman says. The Privilege fashion store at the Beverly Center in Los Angeles, for instance, reports that 90% of customers on a Saturday in December used Beverly Center’s web site coupon, which offered a $100 savings on purchases of $400 or more. Another retailer at the Beverly Center, What Lies Beneath, a women’s sleepwear and lingerie retailer, said 50% of its November phone sales could be credited to the site. The store says it received phone orders from as far away as Texas and New York after customers read about products on the web site.
The sites also offer a gift guide featuring thousands of products, with photos and prices, a gift-reminder service that allows shoppers to list key gift-giving dates and then sends e-mail reminders, specials on hotel packages and special offers for out of town visitors and job openings in each store.
Lower cost surveying
Taubman maintains the site server at its headquarters with a staff of two and a half. The tenant coordinators in the mall update the sites from terminals in each mall. “It’s very economical per center,” Gies says.
An unexpected benefit of having a staffer gather information from tenants is weekly contact between mall management and tenants. “We get terrific feedback from tenants,” Gies says. “They view the tenant coordinators as people who can take concerns and questions back to mall management.”
A further benefit that General Growth has discovered is that surveying of shoppers is faster and cheaper. General Growth uses its e-mail list as well as a button on its web site for surveying. Because the polling is electronic, General Growth can tabulate results instantly. “We are saving thousands of dollars doing electronically what we would have done face-to-face at the mall,” Maladra says.
Replacing those face-to-face efforts with an automated system that still gives shoppers the feeling that they are being dealt with on a one-to-one basis is part of the beauty of e-mail and web-based systems, analysts say. “Who wouldn’t want to be able to talk to shoppers on an individual basis and tell them about the things they are really interested in,” Maladra says. “But we could never have afforded to do that using traditional methods.”
Mall operators moving to the web
General Growth (135 / 50,000)
Simon Property (280 / 150,000)
Taubman Centers (31 / 350,000)