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WHOSE LIFESTYLE?

Which customers use them, why, and how much they spend

BY MICHAEL BAKER

In early 2000 ICSC initiated a lifestyle center research program in response to growing industry interest in this new genre of outdoor center. The first goal of the research — on the surface modest, but in reality quite tricky — was to define the term “lifestyle center” by identifying a set of physical characteristics typical of the format. The second was to use this checklist of characteristics to develop a representative list of the centers themselves. The results were published in the winter 2001-2002 issue of the ICSC Research Quarterly and in the April 2002 issue of SCT.

Though the list of 30 centers was meant to be representative, not exhaustive, several industry professionals contacted ICSC’s Research Department asking why this or that center was not included. Accordingly, research staff went back to the drawing board and developed a more complete list that includes nearly 60 centers. ICSC believes this is close to the true number of lifestyle centers currently operating in the United States. (By comparison, there are about 1,150 regional malls and about 44,000 strip centers.)

The next step was to learn the consumer perspective on these centers. Last December ICSC completed a groundbreaking study involving exit surveys of 1,500 shoppers at five centers across the United States, conducted by Consumer Research Corp., Minneapolis. It was the first major industry-led effort to ascertain the demographics and shopping behavior of lifestyle center customers. The study also gathered information about the characteristics of lifestyle center trade areas and how shoppers view the lifestyle center shopping experience vis-à-vis that of nearby regional malls with similar merchandise orientation.

The surveys were conducted in June and September 2002, with all but 180 of the 1,500 interviews done in September, at the following centers: The Arboretum at Great Hills, Austin, Texas (opened 1985); Aspen Grove, Littleton, Colo. (opened 2001); The Avenue at East Cobb, Marietta, Ga. (opened 1999); Deer Park (Ill.) Town Center (opened 2000); and Huebner Oaks, San Antonio (opened 1997).

The lifestyle center trade area
The study confirmed that lifestyle centers are located in affluent trading areas and serve a well-heeled customer. Median household income for these shoppers was almost $85,000, compared with $44,500 in the United States as a whole. Fifty-seven percent of lifestyle center shoppers had household incomes above $75,000, compared with an overall U.S. figure of 24 percent.

Lifestyle center trade areas are not only relatively affluent, but they also tend to be large. The trade area for one center, for example, drew customers from 30 zip codes. The average for all five centers was 18 zip codes. (ICSC research has no comparable figure for malls.) Clearly, the centers create a sufficiently pleasant shopping experience to draw shoppers from far and wide. Sixty-five percent of respondents rated lifestyle centers more highly than regional malls on overall atmosphere and shopping environment. In terms of price and merchandise mix and quality, however, shoppers didn’t perceive lifestyle centers as being superior to regional malls. This is understandable in view of the fact that the tenant mix at lifestyle centers tends to be a subset of the upscale national chains found at regional centers.

Convenience is king
That said, convenience is still a critical factor drawing shoppers to these centers. Residents of the centers’ core trade areas, which comprise about 50 percent of the shoppers, visit lifestyle centers more frequently (4.6 times in the past 30 days) than those in the rest of the trade area (3.3 times) or who live outside (2.6 times). The convenience factor supports the more purpose-driven nature of the lifestyle center shopping trip — 74 percent of the lifestyle center shoppers said they were at the center to visit a particular store or stores, or to make a specific purchase, compared with 60 percent of mall shoppers.

The convenience factor also extends beyond driving time. Sixty-five percent of shoppers rated lifestyle centers more highly than nearby regional malls with regard to availability of parking directly near the stores they visit. But though lifestyle centers also got good marks for convenience of getting from store to store, they were not regarded as superior to regional malls in this respect.

Shopping trip benchmarks
A number of the basic characteristics of the lifestyle shopper’s trip are similar to those of the ICSC regional center benchmarks, including the number of trips, the number of stores at which purchases are made and total expenditures (see chart). There is one notable difference, however: As noted above, lifestyle center shoppers are more purpose-driven. The average trip duration for lifestyle centers is, accordingly, much shorter than for malls, at 57 minutes versus 78 minutes (see chart). Thus, given similar expenditure levels, the lifestyle center trip seems to be a more efficient one as measured by spending per shopper hour. Also, in keeping with lifestyle centers’ shorter trip durations, food expenditures generally seem to be a less significant component of business than at regional malls.

Click for chart: Lifestyle Centers in the U.S. (PDF format.)

Competition or coexistence?
The lifestyle center is not necessarily a direct competitor of regional malls; trips to the two types of centers are often complementary. The lifestyle center is appreciated for its convenience, efficiency and ambience, while the regional mall is patronized for its broader merchandise assortments and department store offerings. According to the study, shoppers visited the lifestyle center an average of 3.8 times a month, but also shopped their favorite regional mall an average of 2.5 times. Only 19 percent of the lifestyle shoppers said they had no favorite regional mall or made no visits to a regional mall in the preceding 30 days.

The lifestyle center appears to have established itself as a viable shopping center format, despite the fact that there are still very few of them in relation to the number of regional malls and conventional strip centers. Key to the success of the five lifestyle centers in the ICSC study were the relatively affluent trading areas and the large offering of upscale national specialty stores in place to serve them.

Given that there are ultimately a limited number of sites for these upscale centers, the concept may evolve over time, with the appearance of middle- and lower-market variations on the original theme. In that case, ICSC’s lifestyle center definition will need to be revisited — perhaps sooner rather than later.

Michael Baker is ICSC’s director of research.

 

 

 

 

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