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MORE LANDLORDS POLLING SHOPPERS ON PREFERENCES

BY DEBRA HAZEL

Customers were asking for it, GGP says: A play area at its Altamonte Mall.

General Growth Properties just knew that shoppers were going to like the children’s play area, multiscreen cinema and other improvements that went into Altamonte Mall. How did it know? It called up its customers and asked them.

General Growth and other developers have started polling customers to better tailor their shopping centers to local tastes and as a way of staying on top of consumer trends.

The $28 million worth of improvements at Altamonte Mall, in Altamonte Springs, Fla., was the result of an extensive in-house research effort like others the firm is conducting at several properties in its 172-mall portfolio. The firm uses four teams, each charged with a different aspect of research; the object is to adapt each center’s merchandise mix, services and layout as closely as possible to its customers’ desires and needs.

“Market intelligence is the basis of what we do,” said James W. (Wally) Brewster, CMD, senior vice president of marketing and corporate communications at the Chicago-based development firm. “We have to make decisions based on that.”

Last spring General Growth brought consumer research, which it had previously outsourced, in-house, forming a six-person department that conducts and analyzes shopper surveys. Doing this makes it easier to extend and adapt surveys and to conduct them faster, says Sarah Williams, SCMD, a vice president of marketing.

General Growth already had in place a market research department dealing with census data, a sales analysis team and a retail productivity group. Now, with the addition of the shopper analysts, the company gets a comprehensive market view that goes far beyond mere demographics. These groups, whose offices have been placed near each other to ease communication, are conducting surveys more extensive than ever seen at the company before, and doing that more often, executives say.

“We found out that when you put [consumer research] with market data, you get a different look at a trade area,” said Brewster. “You get the most relevant information.”

The Altamonte Mall play area, which opened in November, was built after more than one-third of respondents to a 300-person telephone survey said such a service would keep them in the 1.1 million-square-foot mall longer. Six out of 10 respondents said they would visit the mall more often if it had a movie theater.

Besides phone polls, the firm uses focus groups and on-site interviews with associates holding personal digital assistants. The results are sent to the teams at the home office, where they are assessed and combined with other data.

This was done to determine how to improve the 1.2 million-square-foot Woodlands (Texas) Mall.

“We looked at the lifestyle of the shopper,” Williams said. “They love the outdoors and nature, and we used that to build a model for leasing and marketing.”

The result is a 100,000-square-foot, open-air lifestyle addition, under construction now, that will bring in restaurants Brio’s, Cheesecake Factory and P.F. Chang’s. In addition, General Growth is adding some upscale retailers to the mix.

General Growth is also conducting a “tremendous amount” of research at Northbrook (Ill.) Court, which the firm acquired in 1998 and has re-leased the center with a more upscale tenant mix that includes Max Mara.

Now General Growth plans to establishing a new identity for the center through marketing, leasing and advertising, to distinguish it from nearby competition.

In this respect, the firm is acting more like a consumer products manufacturer than shopping center developers have in the past.

“We’re doing what Procter & Gamble might do when they’re creating a brand,” Williams said.

Developers really don’t have a choice now, General Growth executives say, what with all the competition shopping centers face for consumers’ time and dollars. Most of the major developers are increasing the numbers and breadth of their customer surveys, and many are running at least a small in-house department to analyze information gathered at the malls.

This trend is in fact a return to how the business operated a decade ago.

“Five or 10 years ago, a lot of developers had good-sized research departments, then did away with them,” said Garry Butcher, SCMD, vice president of marketing and consumer research at The Macerich Co. “Now there seems to be a trend back toward research departments.” Macerich established its in-house department last year, though it also continues to use outside consultants.

Macerich focuses its research in two directions: For one thing, it conducts customized surveys at properties that are challenged or facing a renovation; second, to stay abreast of shopping trends in general, it holds customer-intercept surveys at centers as part of a new initiative called “Shopping in America.”

Simon Property Group has a two-person team dedicated to analyzing information gathered at its centers by outside companies, says Michael P. McCarty, Simon’s senior vice president of research and corporate communications. By this means, the firm maintains a “constant” level of research, he says.

Practically every survey done at a center yields recommendations that can affect everything from whether to expand to the management of basic day-to-day operations, McCarty says. A recent example resulted in Simon’s relocating mall rest rooms closer to the main corridors rather than keeping them down long hallways.

As a result of the increased emphasis on customer polling, most redevelopments and new centers will now be even more of a collaborative effort, with shoppers themselves playing a part in the decision-making process.

“The industry, not just General Growth, has to move forward,” Brewster said. “The mall has to be a place, after their homes, that people want to come to.”

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