Do Malls Need a Gen-Y Makeover?

May 20, 2013

The good news for enclosed malls is that online buying isn’t drastically taking away their business with the Gen-Y crowd. The bad news: big box discounters and warehouse clubs could be, according to a new report from the Urban Land Institute (ULI).

The core finding of the report, Generation Y: Shopping and Entertainment in the Digital Age, was that Gen-Yers (18 to 35) still likes brick & mortar shopping despite their comfort with technology. A recent survey of 1,251 Gen-Yers in late January found that 37 percent "love" shopping and 48 percent "enjoy" it. Half the men and 70 percent of the women consider shopping a form of entertainment and something to share with friends and family.

However, a secondary finding was that Gen Y strongly supports discount department stores and warehouse clubs, which are visited at least weekly by 31 percent of Gen-Yers. That compares to 12 percent who visit a full-line department store weekly.

Big boxes are also increasingly becoming destinations for apparel, a core mall offering. When asked an open-ended question about going for "trendy" or "chic" apparel without spending too much, the most frequently mentioned store was J.C. Penney, followed closely by Target and Walmart.

Given Gen-Y’s acceptance, ULI urged municipal governments as well as mall owners to consider encouraging the use of the discounters’ smaller formats to fill unoccupied retail space.

Based on the survey’s responses, a number of suggestions were also offered for malls to retain the "fickle, easily bored" Gen-Y crowd:

  • Refresh interiors frequently with paint, lighting, new carts, etc.
  • Encourage social gathering — food courts, center courts, restaurants, and temporary or permanent event venues.
  • Keep bringing in pop-up stores, partly because some will become permanent.
  • Add specialty food purveyors and grocery stores.
  • Incorporate movie theaters, and renovate obsolete ones.
  • Become pickup/drop-off points for merchandise ordered online. Malls can work as a hub for multichannel selling.

At the 2013 ULI Spring Meeting in San Diego, ULI officials along with a panel of retail, development and technology experts stressed the importance of bringing fresh sensory experiences and social interaction.

"I think ‘marketing director’ is a dead term," Linda Berman, president of Team I-Sight, said at the event, according to U-T San Diego. "You need a programming director now. I would pull somebody out of entertainment; somebody who has lived and worked in popular culture. Those are the people who are going to make your centers vibrant."

How can enclosed malls reinvent themselves for Gen-Y? Do you agree that “program director” is a better way to describe a mall’s marketing director’s role?

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8 Comments on "Do Malls Need a Gen-Y Makeover?"

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Gene Hoffman
Gene Hoffman
8 years 11 months ago

Gen-Y is an important component of the future marketplace. They represent the natural evolution of change. Gen-Y must be appreciated and accommodated by malls.

That generation wants fresh sensory experiences and social interaction. The malls should extend that to them and if a “program director” is a better to accomplish that objective, then let’s give them a “program director.” Time marches on.

Roger Saunders
8 years 11 months ago

Place the title you wish on the mall’s marketing director. The fact of the matter is, Gen-Y has grown up in a world where they understand how to deal with integrated media messages.

When mall and store directors demonstrate that they understand this savvy consumer, and offer them messaging that reflects the customers’ tastes and sensibilities, they’ll win them over with their platform.

Max Goldberg
8 years 11 months ago

It’s all about the experience, not necessarily about deals. An experience creates lasting emotional connections. Deals are one-time-only events.

Years ago, Walmart copyrighted the word “retail-tainment,” yet you don’t see a lot of retail-tainment in Walmart stores. Mall owners have the space and the budgets to create a retail experience. In Los Angeles, retail centers like the Grove or Americana at Brand attract more customers because they offer a unique experience, not just stores.

Mall marketing directors need to look at how they can differentiate their properties through experience, if they want to create an emotional bond with their customers.

Ed Rosenbaum
8 years 11 months ago

Retail malls can become to the Gen-Y’ers what Starbucks is to the previous two “Gen’s.” It will take some effort on the part of the major mall management companies. But it is certainly doable.

Ralph Jacobson
8 years 11 months ago

Interesting that one suggestion is to add grocery stores to malls. That is one segment that remains rare in enclosed malls. Perhaps due to the fact that shoppers must plan their trips to save the perishable foods for last, which requires far more thinking than a typical trip to the mall.

The challenge is and always has been to have a true draw in the mall. That has typically been an anchor store or compelling specialty store. Gen-Yers do still flock to malls, however, the rate of purchase is relatively flat. Too many stores are dying on the vine. Marketing is one function of the mall management team that has been weak, to be sure.

Lee Kent
8 years 11 months ago

Folks, I am far from a Gen-Yer but I too would like to see fresh new things happening in malls. The old shopping experience just isn’t that entertaining anymore. One store to the next, they are pretty much the same. Well, with the exception of Anthropologie, since they move their merchandise around the store every 2 weeks and make you feel like it’s a new experience. Cool!

So it’s high time for the malls to get their groove on. Add events, create experiences, put on fashion shows, etc. They should avoid a lot of comfy seating areas or the malls will, once again, become after school drop-off places for kids.

Bill Hanifin
8 years 11 months ago

I would take Linda Berman’s suggestion one step further and say that “Event Director” might be a fitting new title for Mall Marketing Directors as well.

The mall has always been a social gathering spot for teen crowds and, while there is empty space to leverage, should mix in experimental retail formats with discounters to build additional traffic.

Success for mall operators will be found when Gen Y shoppers don’t feel that they have to split their shopping trips to two locations—the mall for specialty branded trendy goods and a stand-alone big box discounter location.

Why not make the mall the one-stop shop that it can be?

Craig Sundstrom
8 years 11 months ago

“… the most frequently mentioned store was J.C. Penney”: OMG.
Despite this particular unexpected twist, the overall article sounds pretty much like Malls 101: more upscale, more novelty, more recreational features…blah, blah; in short, keep doing what you’ve been doing, only more so. Despite the upbeat tone , however, B&M retail still faces the same long-term challenge: there’s too much of it, and it’s too much alike; I’m not sure advice that amounts to “be original…just like everyone else” is really going to help much.


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