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Shopping Centers Today -> May 2004
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‘YOU HAVE MAIL’ FROM MALL, MORE SHOPPERS FIND
BY LEE KESSLER
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| Money that Honey Creek would otherwise have spent on advertising went instead to creating a community room for non-profit groups. |
That’s the first thing you’ll hear from those behind the request-based e-mail marketing programs that some malls have adopted. After all, these e-mailed missives about customers’ favorite stores are just that: request-based. Which is more than one can say about the traditional advertising that some of these e-mail campaigns have partly replaced.
And because these communications are requested, customers tend to be more receptive, proponents say. At least, that was the case at Honey Creek Mall, Terre Haute, Ind., which established its MeClub monthly newsletter in July 2002. (The program was suspended in March, following the mall’s sale by Faison & Associates to CBL & Associates Properties.)
“They know what is going to be in that newsletter,” said William White, a partner at Miller White, the Indianapolis-based marketing company that devised the program. “And they open it when they are ready to take that information in. I think that readiness is the huge benefit of all of this.”
The customer is boss with Request Mail too, the e-mail program set up at 11 East Coast malls owned by Kravco Simon Co. Subscribers get a list of every retailer in the mall. They select the ones that interest them, and each month — more frequently, at holiday time — they get a newsletter about those stores. Subscribers’ e-mail addresses are never given to third parties, operators say, and they can unsubscribe if they wish.
These programs redirect a lot of money that would otherwise be spent on newspaper and radio advertising.
During the past holiday season, “we literally did not advertise our hours via newsprint,” said Debra Gilson, SCMD, marketing director at Oxford Valley Mall, Langhorne, Pa., a Kravco Simon mall. “We would normally spend $15,000 in the newspaper to do that. So it was a significant savings.”
Gilson says she foresees additional savings when the Oxford Valley database gets to be about 50,000 (the number of names on its direct mail list). An e-mail effort that replaced a direct mail campaign would save about $40,000, she says.
Honey Creek Mall found itself spending 66 percent less on traditional advertising after initiating MeClub.
“It’s a shifting of emphasis,” said White. The money that used to go toward regular advertising was plowed into other aspects of the mall’s marketing program instead, including a redesign of its Web site, new billboards and the creation of a community room that is lent to local non-profit groups.
Kravco Simon is looking for its program to provide more than just savings.
“Actually, we think this is going to be a profit center in the future,” said Robert C. Hart, SCSM, a Kravco Simon district property manager. For instance, for a fee, the company could offer a local merchant (one not in direct competition with mall tenants, such as a car dealership) the opportunity to place a logo and message as an e-mail sponsor. “Once we get a substantial number of people in [the database], we’re going to market this to sponsorship and get people to fund these e-mails.”
Furthermore, the databases obtained through the program provide a valuable source of information to the operators. Kravco knows, for example, that merchants that offer an exclusive discount through Request Mail enjoy a redemption rate of between 10 and 12 percent — far higher than that of direct mail, says Hart.
Request Mail, developed for Kravco Simon by Chicago-based e-mail marketing firm Publishing Dynamics Corp., was launched last August and now has 20,000 participants — an average of more than 1,800 for each of the 11 participating malls. In those markets, the percentage of households with Internet access is somewhere between 50 and 79 percent. Over the first six months following its inception, the system has generated 1,350 advertising or marketing communications from merchants, which averages out to more than 20 per mall per month. The cost to get each mall set up in the database is about $7,500.
Kravco aims to have about 130,000 participants by year-end. The firm stages promotional events such as the one held recently at Oxford Valley, in which bars of Bath & Body Works soap were given out. “Across the Kravco portfolio, they are by far the No. 1-requested store,” said Gilson.
Representatives equipped with laptop computers signed up new participants at the customer service booth, offering gifts as incentives. “When we look at the top 10 zip codes [in Request Mail], it almost matches our direct-mail zip codes head-on,” said Gilson. “So it has confirmed that those zip codes really are our hottest profile. We suspected that before, but we weren’t able to prove it.”
For its part, Honey Creek Mall offered MeClub members $5 gift certificates to get friends and colleagues to sign up, one certificate per new subscriber, to a maximum of five. Honey Creek declined to reveal the number of customers enrolled in the MeClub, which targets a 25-to-45 age group.
Honey Creek, a 675,000-square-foot regional mall built in 1968, is anchored by L.S. Ayres, Elder-Beerman, J.C. Penney and Sears.
These e-mail programs are “a good way to partner with the stores,” said Monica Schiller, Honey Creek’s marketing director. “They don’t have to get approval from their districts to participate, because it’s really a no-brainer for them.”
For all that, getting stores on board can still be challenging, White says. “Unfortunately, not a lot of store managers are taking a leading marketing role in the process,” he said. “We have to go out and get stories for our monthly MeClub newsletter.”
Research conducted by Miller White in Honey Creeks’ nine-county market shows that 97 percent of the population had visited the mall over the previous year; 70 percent visited at least once a month. So reach was not a problem. The goal of Honey Creek’s integrated marketing campaign, which also included a degree of traditional advertising, was to increase the mall’s sales per square foot. White credits the program with helping to raise the mall’s sales per square foot slightly, from $333 in 2002 to $335 in 2003.
Both Honey Creek and Kravco Simon established benchmark levels by which to measure future progress, though with the suspension of Honey Creek’s program, that is purely academic at present. Before the mall launched its marketing program, its Web site was getting 5,000 to 6,000 visits a month from Vigo County, Ind. (the largest in the market), representing about 5 percent of its 105,000 residents. Just before the program was shut down, it was averaging more than 23,000 visits, or 22 percent of the county, White says.
Kravco, meanwhile, says it sees its target of 130,000 users by year-end as a good first step.
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