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Shopping Centers Today -> May 2003
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CADILLAC FOLDS ‘BUSINESS CLASS’ MALL PROGRAM
BY IAN RITTER
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Shoppers don’t mind business-class treatment in a mall — unless, it seems, they have to pay for it.
Cadillac Fairview Corp. has pulled the plug on its “Embarq” mall membership program, which offered customers perks for a premium, after concluding that it wasn’t paying off. But the company, which owns 33 malls in the United States and Canada, has retained aspects of the program and is applying them at several centers.
The program was launched in March 2001, when Cadillac Fairview opened a lounge at its Markville (Ontario) Shopping Centre. It offered the lounge as a place where shoppers could — for C$149 ($101) per family per year — take a break from shopping, drop off their children at a child care center, obtain personal shopping services or enjoy other special treatment. There was a luxurious bathroom with posh soap, as well as music, massage, refreshments, Internet access — though no Web shopping — and magazines.
Most important, it was a good place to drop off children or husbands, who can quickly tire of shopping and pressure the women to take them home.
Embarq didn’t actually mean anything; it was a name created by a consulting firm and designed to conjure up images of travel and class, executives say.
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| Cadillac Fairview may have closed its Embarq hospitality program at Markville Shopping Centre, but it has retained fee-based child care services, which proved popular with shoppers. |
“People loved it,” said Susan Williams, Cadillac Fairview’s director of national research and marketing. “It attracted our best customer.” Apparently, not enough people loved it. Though 1,000 families signed up, the company had hoped to attract more than 9,000 families, or about 4 percent of its total annual shoppers, whose membership fees alone would have paid for the program’s annual running costs. “There were a lot of costs up front and [it cost] a lot to maintain,” Williams said.
Cadillac Fairview, which spent C$2 million setting up the 7,000-square-foot lounge and child care center, figured the program would cost C$1.2 million a year to run. But the company also hoped that the program would extend 30-minute shopping trips to an hour, boosting the average C$60 shoppers spent per visit to about C$90 and adding up to a C$16 million increase in annual sales.
The developer also hoped that, through promotions and surveys, it could track members’ shopping habits and fine-tune its marketing programs.
The target Embarq member was 25 to 44 years old and had a household income of C$100,000 or more — about 18 percent higher than the average mall customer’s C$85,000, officials say. People in these age and income groups are a mall’s most lucrative customers, and they are also the ones with children. All of which made the family-friendly lounge seem like a no-brainer.
But things did not work out exactly as planned. Families were reluctant to buy an annual membership, given that many had summer vacation plans that took them away from the mall.
“When you started to move into the summer, people already had commitments,” Williams said.
The company also discovered that it might have made its lounge a little too comfortable.
“We found there were a lot of people who chose to hang out,” she said. “They weren’t out there shopping. There needs to be some incentive to get them in the mall. It needed more development, it needed more time, and you have to make sure it’s a productive space.”
The lounge in Markville is no more — Cadillac shut down the program last spring. It has been replaced with an administrative office. But not all vestiges of Embarq are erased.
“What we did find out is that we had a lot of kids,” Williams said. “The kids were the most compelling part of the whole experience.”
So last May the company opened a 4,000-square-foot space in the mall called Kids at Play. The play area, which costs parents C$5 an hour at a two-hour limit, draws about 950 children per month, Williams said. Most of the children that frequent Kids at Play are under 10 years old, an age at which they are difficult to take shopping, she observed.
Another program that will come out of Embarq is an e-mail newsletter now in development. Using customer information entered in a database, the company can e-mail offers from specific retailers, Williams said.
Cadillac Fairview is also striving to offer the same level of customer service that was available in the Embarq lounge to customers across the board, said Tony Grossi, Cadillac Fairview’s executive vice president of operations. The company is making a special effort when it hires new employees, for instance, to select people with pleasant demeanors.
“You can basically have free everything, but if it’s not delivered in a pleasing way, it’s not going to be attractive to the customer,” he said. “The majority of people expect this level of service to be free.”
Starting in June, Cadillac Fairview will pilot the enhanced customer-service program — the play area and newsletter — at three of centers: Fairview Pointe Clair (Québec); Polo Park Shopping Centre, Winnipeg, Manitoba; and Toronto Eaton Centre.
“No two customers are the same,” Grossi said. “What we found with Embarq is that everyone had a different set of issues, and we were trying to deal with those issues with a broad approach.”
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