It was not long ago when shopping malls were the liveliest and most popular spots in a city. However, the advent of the internet, social media, and the COVID-19 pandemic have pushed shopping malls into an existential crisis. Professors Khadija Ali Vakeel, DePaul University, Morana Fudurić, University of Zagreb, Vijay Viswanathan, Northwestern University, and Mototaka Sakashita, Keio Business School, explore if malls can stay relevant in the long term or if they are going to be the dinosaurs of the future.
Shopping Malls: Dinosaurs of the Future? by CoBS Editor Pavan Jambai. Related research: Sustaining shopping momentum in retail malls using real-time messaging, Khadija Ali Vakeel, DePaul University, Morana Fuduric, University of Zagreb, Vijay Viswanathan, Northwestern University, and Mototaka Sakashita, Keio University, Science Direct, Journal of Retailing, Elsevier.
It is estimated that out of the 700 shopping malls in the United States, only 20% will survive in the next ten years. Like watching movies and making social connections, shopping has virtually moved to the online space from the physical world. While the internet was the starting point, social media acted as the last nail in the coffin of physical shopping.
Can shopping mall operators use the enemy as a tool? Profs Ali Vakeel, Fuduric, Viswanathan, and Sakashita explore how the digitization efforts such as real-time messaging (RTM) can sustain the shopping momentum – the increased likelihood of making a second target purchase after completing the first – among shopping mall goers.
The Shopping Mall: Focus on the naturals
Based on shopping tendencies, humans can be categorized into three groups: heavy, moderate, and light shoppers. Heavy shoppers are those who shop frequently and in high amounts while light shoppers are people who shop rarely and not in huge quantities.
The professors’ research offers a pragmatic observation of the efficacy of real-time messaging promotions in sustaining the shopping momentum. For heavy and moderate shoppers, an RTM with a small incentive is sufficient to sustain their shopping momentum owing to their natural inclination towards shopping.
On the other hand, RTM has a negative effect on light shoppers. Upon receiving additional information through RTM, light shoppers venture into a deliberative mindset to understand and weigh the pros and cons of the promotion they just received. This usually results in light shoppers who received RTM spending less on subsequent purchases than light shoppers who did not receive an RTM, unlike heavy and moderate shoppers who spend more on subsequent purchases after receiving an RTM.
Apps: The strongest weapon in the armoury
While RTM is one way of sustaining the shopping momentum in a shopping mall, current technology and data analytics offer several insights to marketing practitioners to effectively target and incentivize shoppers. As such, mobile phones have become an extension of our hand as we don’t, or rather can’t, move around without them which makes them the perfect tool to target shoppers.
Apart from sharing information with shoppers, mobile apps can also track purchases and understand buyers’ behaviour over time and space while in the mall. As a result, malls have access to rich first-party data and don’t have to rely on third-party data sources to get insights into what works and what does not in the mall.
Based on shoppers’ behaviours and preferences, shopping malls can also segment buyers into different groups and customize the kind of information to be sent to each group. For example, sending an incentive to heavy and moderate shoppers after their first purchase at the mall can do wonders for other shops in the mall.
A fine line to walk for brands
It is undeniable that there has been a persisting technological, economic, and cultural revolution in most countries that have reduced the footfall in shopping malls. Fuelled by the internet and social media, brick-and-mortar stores in general are struggling to make ends meet. However, they are starting to use technology to offer something that online shopping can’t: an experience.
As shopping mall operators and marketing practitioners begin exploiting technology to attract buyers, they would be wise to realize that they are on a slippery slope. If shoppers feel suffocated by the constant communication akin to the targeted ads in social media, the strategy might backfire for the shopping mall operator. Indeed, it is a fine line to walk.
- Link up with Khadija Ali Vakeel, Morana Fuduric, Vijay Viswanathan, Mototaka Sakashita on LinkedIn
- Read a related article: Narrative Reviews: A powerful tool for businesses and brands
- Discover Keio Business School, Tokyo and apply for the International MBA program.
Learn more about the Council on Business & Society
The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.
Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.
- ESSEC Business School, France-Singapore-Morocco
- FGV-EAESP, Brazil
- School of Management Fudan University, China
- IE Business School, Spain
- Keio Business School, Japan
- Smith School of Business, Canada
- Stellenbosch Business School, South Africa
- Trinity Business School, Trinity College Dublin, Ireland
- Warwick Business School, United Kingdom.
Pingback: Customer Referencing: Turning the customer into a credible source of value – Council on Business & Society Insights·