Interesting research in my email this morning from Mediapost that shows the relationship between shopping mall's and gas prices.
Last week it was announced that Glenbrook Square, the largest enclosed mall in Indiana, located here in Fort Wayne, may be affected by the economy. Click here for that news.
Another interesting sidenote is that shopping malls were designed to save folks money 40 years ago, because you could park your car one time and shop at dozens of stores. However in time, the perception grew that items at the mall cost more than at non-mall stores.
Here's the research:
There appears to be a strong reverse correlation between the price of oil and mall traffic, says the report. In August, as the price of oil started to decline, mall traffic's negative trend moderated. This trend continued into September as the price of oil continued to fall. During the month of October, shopper traffic in the common areas of enclosed malls has actually increased versus October 2007, contrary to common perception.
| 2008 Enclosed Mall Traffic Relative to Price of Oil | ||
|
| Monthly Average Price of Crude (US$) | Monthly % Change in Enclosed Mall Traffic VS Same Period in 2007 |
| May | $125 | + 0.9% |
| June | 134 | - 0.5 |
| July | 133 | - 3.4 |
| August | 117 | - 2.8 |
| September | 104 | - 1.1 |
| October (thru 25th) | 83 | + 0.4 |
| Source: AdSpace Networks & Shoppertrak NRTI, October 2008 | ||
Department store traffic, on the other hand, has been less positive, finds the study. Department store month to month traffic changes versus prior year are significantly more negative than mall traffic overall, suggesting that while mall traffic is back, visitors are less inclined to go into retailers' stores.
Dominick Porco, Adspace chairman and CEO, said "... Our research shows that consumers are in the mall for about 77 minutes, yet they only visit an average of less than 3 stores... "
| 2008 Enclosed Mall Traffic and Department Store Traffic Relative to Oil Price | |||
|
| Monthly Average Price of Crude (US$) | Monthly % Change in Enclosed Mall Traffic VS Same Period in 2007 | % Change in Department Store Traffic VS Same Period in 2007 |
| May | $125 | + 0.9% | - 1.2% |
| June | 134 | - 0.5 | - 5.4 |
| July | 133 | - 3.4 | - 8.9 |
| August | 117 | - 2.8 | - 4.1 |
| September | 104 | - 1.1 | - 5.0 |
| October (thru 25th) | 83 | + 0.4 | -2.5 |
| Source: AdSpace Networks & Shoppertrak NRTI, October 2008 | |||
Bill Ketcham, executive vice president and chief marketing officer, Adspace Networks, concludes "People are still going to malls, even though specific retailer traffic may be down... retailers that put compelling items on sale and communicate that... near the point of purchase, will fare best... "
A recent test, in 12 shopping centers with the Digital Mall Network, showed that when a major anchor department store discounted men's loafers, and used digital in-mall advertising, the promotional lift increased 38%. In the stores that did not promote the sale on digital screens in the mall, the loafers sale trended 15.1% above average. In general, the report notes, stores where the sale was advertised digitally, sales jumped 20.8% above average.
Other retailers reported incremental traffic and sales. 18% of a particular specialty women's segment that were in the mall during the promotional period, visited the advertised store, and 71% of those visitors made a purchase.
As a result of the study, Mr. Porco concludes that "...mall-based (retailers) that have digitally advertised price-point promotions ... (in the mall)... have seen immediate sales lift.
More information about this study may be found through KCSA Strategic Communications here.
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